Tanzania’s authorities stopped export of minerals from three mines operated by Acacia Mining. PHOTO | FILE | NATION MEDIA GROUP
Acacia Mining Plc wants a truce with the Tanzania government over the tax arrears dispute.
“Acacia’s
desire is to engage the government of Tanzania and continue to seek a
direct negotiated resolution of the dispute. We still seek to continue
demonstrating our long-term commitment to Tanzania, our people, and the
mining industry going forward,” the company said in a statement last
week.
The latest statement was in
response to an offer by Canadian-based majority shareholder Barrick Gold
Corp to buy the company’s assets, including the three goldmines it
operates in Tanzania.
PROPOSAL
Barrick
Gold owns 64 per cent of Acacia Mining, and has tabled a proposal to
acquire the remaining 36 per cent stake at 0.153 Barrick shares for each
Acacia ordinary share.
The Canadian
firm has extended its discussion deadline on the offer to July 9, as it
continues mediation efforts to end an impasse with the Tanzanian
government the has seen Acacia’s own shares plummet over the past two
years.
Acacia’s fortunes have been hardest hit by the
government’s ban on further exports of mineral concentrates from its
three gold mining operations in the country pending payment of a $190
billion tax bill.
Barrick said
recently that its reduced share price offer “reflects the fair value of
Acacia” in its current state, based on a “detailed due diligence on all
its assets.”
But, according to
Acacia’s statement on June 24, the London Stock Exchange-listed firm
remains deeply distrustful of Barrick’s ultimate motive in the deal.
Acacia
appears to have now shifted its row with the government to the majority
shareholder, saying it never endorsed Barrick’s 2017 move to intervene
in its dispute with Dar es Salaam by opening negotiations on its behalf
in the first place.
The negotiations
between Barrick and the Tanzanian government, from which Acacia was
excluded, led to the signing of an agreement that included a $300
million one-off payment to settle outstanding tax claims and an equal
50-50 share-out of all future economic benefits from the three mining
operations between Acacia and the government.
Now, Acacia says Barrick’s intervention has proved more damaging for its material operations in the country.
“Acacia
did not invite Barrick into our negotiations with Tanzania; we had our
own engagements with the highest levels of the government at the time
and had no reason to believe that these engagements would not continue,”
the company said. “With the length of time Barrick’s negotiations with
the government have taken, and the way they have been managed, they have
had the effect of undermining Acacia in Tanzania.
COMPLETE PROPOSAL
“Barrick
has never actually presented Acacia with a complete proposal for
Acacia's consideration and shareholder approval, and this has been a key
contributor to a material deterioration of Acacia's operating position
in Tanzania over the past two years,” it added.
The company said it would “continue seeking a direct negotiated settlement with the government – however negotiated.”
It
also said that to protect the interests of its shareholders, it will
continue to pursue international arbitration proceedings against the
Tanzanian government, although it is understood that hearing dates have
not been set yet.
But the Tanzanian
government recently announced its intention to “cut all ties” with
Acacia Mining and instead work with only Barrick on the implementation
aspects of the 2017 deal.
“The
government insists that under no circumstances can Acacia be a party to
the agreement, or have any role in the operation or management of the
Barrick mining subsidiaries in Tanzania,” government spokesperson Dr
Hassan Abbasi said.
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