AEMA, coalition launch legal challenge to BLM Conservation and Landscape Health Rule
The American Exploration & Mining Association was joined by a coalition in filing a challenge last Friday in the Wyoming district court.
Shares in Acacia Mining (LON:ACA) collapsed Monday after the government of Tanzania accused the gold miner of operating illegally in the country and said it has evaded taxes for years.
A second special committee appointed by Tanzania’s President John Magufuli found that Acacia, majority owned by Barrick Gold — the world’s largest producer of the precious metal—, was not registered in the country.
It also alleged that Acacia has “under-declared” revenues and tax payments “over a number of years by tens of billions of US dollars,” local paper The Citizen reported.
A second special committee appointed by Tanzania’s President found Acacia was not registered to operate in the country, and said the miner had understated revenues and tax payments for years.
As a result, the commission recommended that Tanzania demand the repayment of outstanding taxes, review the possibility of increasing government ownership of mines, and continue with an export ban on gold concentrate affecting the company.
Such prohibition was imposed on Acacia Mining at the start of March, when the president ordered a probe into metal exports in an attempt to capture more of the value from mining for the country.
The gold producer, which spun off from Barrick Gold in 2010, said in a statement it was disappointed at the findings, adding it “strongly refutes” the “new unfounded accusations.”
Acacia’s shares dropped as much as 15% and were still close to that low by the end of Monday in London, trading 13.7% lower at 259.8 pence by 4:00PM local time.
The fresh accusations come after another presidential team said in May it had found the value of minerals within raw concentrate at the port of Dar es Salaam to more than 10 times the declared amount. Acacia has also denied that accusation and said the finding contain “significant discrepancies.”
Barrick, which holds a 63.9% interest in Acacia, said in a separate statement it believed a negotiated resolution to the ongoing dispute between the Tanzania-focused miner and the government of that country was “the best way to achieve an outcome that is fair and reasonable for all stakeholders.”
The Toronto-based miner was quick to point out, however, that Acacia Mining is operated independently, adding that financial results are consolidated for accounting purposes only.
President Magufuli responded to the report by ordering ordered relevant authorities to immediately review and adjust mining laws to ensure that the nation benefited from its resources.
Speaking on national TV, Magufuli said firms exported minerals worth as much as 381 trillion shillings ($170.2 billion) between 1998 and 2017, declaring as much as 40% fewer containers than they actually shipped, Xinhua reports.
Mining contributes 3.5% to the gross domestic product of Tanzania, which is Africa’s fourth-largest gold producer.
He qualified those companies as “ruthless,” as they have taken gold and other minerals, “but revenues, taxes, they didn’t pay.”
Mining contributes 3.5% to the gross domestic product of Tanzania, which is Africa’s fourth-largest gold producer. The government, however, wants to increase that piece of the pie by requesting more taxes from the sector. It has been on a drive to add value to its exports rather than send raw materials abroad.
Additionally, the nation is pushing mining firms to list a 30% stake on the Dar es Salaam stock exchange by August, claiming the move will increase transparency and spread wealth from Tanzania’s natural resources.
The ongoing dispute between the East African nation and mining companies has already claimed its first victim. In March, three weeks after the export ban on Acacia was imposed, a potential $4 billion merger between that miner and Canada’s Endeavour Mining (TSX:EDV) failed. Talks about the likely combination of both companies had been first confirmed in January.
7 Comments
Enoch Pax
These accusations should be taken with a grain of salt;. Very likely this is a shakedown. Most western companies have their own countries’ laws banning or penalizing bribery or some ethical issues in foreign soil. China on the other hand is not bound by such constraints. They view bribes as a business expense and the bottomline are profits. This is why Africa is now dominated by Chinese owned government entities.
CN
Westerners are bound by these laws, yet are the leading in many of these major fraudulent activities. Bre-X, ENRC, Madoff, and many others! In the case of Acacia, they have no other revenue generating venture and they reported losses from all of their operating mines in Tanzania but declared profit in London and gave dividends, how is that possible? They got sued Tanzania wins the case, they run to International tribunal basically run by their cousins. What image does that create to Acacia? So no devil is better than the other, the Chinese do not hide it but the Westerners pretend to be clean in the name of “privacy” when these things come to light, it is a big disaster. I am Tanzania and I’m not saying everything done by gov is perfect, but we must also admit that we are being taken advantage off by “investors” through some corrupt politicians. It is very unfortunate. These resources should not be the cause of possible conflict should mutually benefit the country and the investors. Among others see here http://www.mining.com/tanzania-puts-former-mining-minister-behind-bars-over-gold-deal/
Timmy G
Magufuli is a thug who wants to extort the gold miners for his own benefit. Just sell before he “nationalises” all the mines ( for himself)
CN
I don’t think so, if that was his motives he would would not be dealing with his subordinates who appear to be fellow party members in the way he does, he would simply make himself unpopular within the party very quickly. I feel he has good intentions, the problem may only be on how he is advised and may be his close aides are too afraid to advise him correctly or he may be trusting too few people. But I have a good feeling of him, he basically has made/brought back some respect of public service the only other question would be how this will be sustainable when his 5+5 years are past.
JH
Two seconds on Google desribes the levels affected by corruption in Tanzania, and the extent throught the country. Hard to illicit any sympathy for anyone who decided to invest in the country. Yep an unsophisticated and clumsy shakedown kidding no-one.
PRINCE A D GAISIE
How can you have 15.5 tonnes of gold in containers at the Port and your data sheet has 1.5 tonnes on it and you want us to believe that ACACIA is doing the right . This unscrupulous calcutions to steal the resources and under declare and under invoicing so it is a serious indictment on the activities of ACACIA and they would pay dearly for this intransigence . No lawyer can defend unless the laws are written in somebody’s bedroom.
Brandon Palmieri
Does anyone know where the picture on the top was taken?