Acacia Mining turns down $190bn Tanzanian tax expense

This news item was originally posted here.

Gold miner Acacia has been struck with a need for $190bn in unsettled taxes to Tanzanian authorities in a row it has called “unreliable and mysterious”.

The need follows a finding by government-appointed committees that the company was running unlawfully and had downplayed its gold exports.

Acacia’s website states that it has stated all products produced and has paid royalties and taxes completely.

The UK-listed company’s shares were down 7.7% in early morning sell London.

Its share rate has been toppling for months as disputes with the Tanzanian authorities have grown.

Previously this month, Tanzania passed 2 brand-new mining laws which contain sweeping modifications to the legal and regulative structure of the mining market.

An export restriction on gold and copper concentrate exports has been in force since March.

Acacia, which is majority-owned by Canadian company Barrick Gold, has stated the extension of the restriction will harm its capability to carry out future business in Tanzania, since it covers 50% of its production.

“The security of the 36,200 indirect and induced tasks that depend on Acacia’s mining operations, along with the company’s capability to purchase education, facilities and health tasks will all be under risk.”

The costs include $40bn in supposed unsettled taxes and a more $150bn of charges and interest owed.
Acacia runs 3 cash cow in Tanzania: in Bulyanhulu, Buzwagi and North Mara.

In a reaction to the authorities in May, Acacia stated that if their claims about its gold production held true, the company would be producing more from its 3 mines than competing business handled to draw out from a far bigger variety of mines.

The modifications to Tanzania’s mining market are the creation of President John Magufuli, who has remained in workplace since 2015 after being chosen on an anti-corruption platform.

In his previous function as minister of works, he made the label of “the Bulldozer” for his decision to carry out a road-building program.

Experts have been supportive to Acacia’s case, with Investec keeping in mind that the standard $40bn tax expense “is more than two times exactly what all leading 5 worldwide gold miners (consisting of Barrick) integrated have paid in taxes since 2000”.