Acacia Mining resumes gold exports from North Mara; processing remains halted

Embattled Acacia Mining (LON:ACA), Tanzania’s top bullion producer, has resumed exports from its largest mine in the country, but noted that ore processing is now officially halted, as a ban issued by the government last month has come into effect.

The order to stop using the North Mara mine’s tailings facility followed a government-led two-day investigation into claims that stored waste was leaching contaminants into nearby water sources.

The company noted that, despite the challenges it faces, it would be able to meet its financial obligations as it can now sell stockpiled gold mined at North Mara.

Processing will not resume until the tailings dump re-opens, it said.

The news comes a month after Acacia’s board recommended a buyout offer for the miner by its majority shareholder Barrick Gold (TSX:ABX) (NYSE:GOLD), the world’s second-largest gold miner.

The Canadian miner has said the takeover deal was needed to resolve Acacia’s disputes with the Tanzanian government, which have constrained the company’s ability to export gold for over two years.

In 2017, President John Magufuli banned exports of unprocessed metal and slapped Acacia with a $190 billion tax bill — equal to almost two centuries worth of revenue.

In October, Tanzania’s top gold producer was hit with fresh charges of money laundering and corruption and some of its employees were detained. The move was quickly followed by a fine of 300 million Tanzanian shillings (about $129,145) the government imposed on Acacia over allegations of breaching environmental rules at North Mara.

A framework deal, reached in February between Barrick and the East African nation, proposed that Acacia would pay $300 million to settle the tax claims. It also said the company, which spun off from Barrick in 2010, would split returns from operations with the government going forward.

Acacia noted at the time it had not been involved in the talks nor had it seen the proposed settlement.

Barrick has yet to see his takeover offer accepted by Acacia’s minority shareholders, who said the original bid, submitted in late May, was too low.