Embattled Acacia Mining (LON:ACA) is facing fresh hurdles in Tanzania as the government has ordered it to stop using a waste storage facility at North Mara, its largest gold mine and the only one of the three the company owns that remains fully operational.
The directive follows a letter sent to Acacia last week, in which it was told the operation had to be investigated before it could export gold.
It also comes just two days before
a deadline for the miner’s parent company, Canada’s Barrick Gold (TSX:ABX)
(NYSE:GOLD), to make a final offer to the Africa miner’s minority shareholders,
who rejected the preliminary bid submitted in May.
Acacia said Wednesday it would “immediately
seek” a stay of their international arbitration, for which hearings were due to
start next Monday. It noted, however, such mediation could be postponed to
give Barrick, which owns 64% of the company, more time to settle a wider
dispute dating back to 2017.
That year, 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 moved was quickly followed by a fine
of 300 million Tanzanian shillings (about $129,144) the government imposed
to 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 country going forward.
Acacia has repeatedly said that
before approving any agreement its board should review it first.
In the meantime, the company is
reaching out to Tanzania’s National Environment Management Council to seek
clarification on the ban against using North Mara’s only tailings facility by 6
a.m. local time on Saturday.
The body said Acacia had failed to
contain and prevent seepage from the dam, which stores waste rock from the mine,
it said.
“All seepage is and will be
contained on the site, does not flow into the surrounding environment or present
a risk of contamination to any public water source,” it said.
Barrick’s chance to submit a new bid expires on Friday. The world’s No.2 gold miner is expected to respond to an independent report by independent consultant SKR, which attaches a higher value to Acacia than the Canadian mining giant originally offered.