Photo: Daily NewS Acacia Mining Plc.
ACACIA'S recent
request for suspension of hearing of the long-standing dispute between
the Tanzanian government and its two subsidiaries over tax payments
signifies submission.
The Office of the
Solicitor General said in a statement in Dar es Salaam yesterday that on
July 19, 2019, Acacia Mining plc, which is listed on the London stock
market, sought for stay of hearing of
the July 22, 2019 scheduled
dispute before the London Court of International Arbitration (LCIA).
The statement said
Tanzanian government through the state attorneys, under the Solicitor
General, was prepared to defend her case against Pangea Minerals Limited
and Bulyanhulu Gold Mining Limited. In March 2017, the government
banned the export of mineral concentrates, pressing for value addition
and transparency in the value chain in the country's mining sector.
Tanzania Revenue
Authority (TRA) seized 277 containers of mineral concentrates belonging
to Pangea Minerals Limited and Bulyanhulu Gold Mining Limited over
charges of fraudulent transactions.
In response to the
government's seizure of the containers, Pangea Minerals Limited and
Bulyanhulu Gold Mining Limited filed a petition opposing the ban on
mineral exports.
The statement
indicates that in July, 2017, Acacia filed the tax dispute at the Tax
Revenue Appeals Board (TRAB) and at the LCIA, complaining that the
Tanzanian government had breached the Mining Contracts (MDAs).
However, things did
not go well for Acacia as TRAB dismissed the tax dispute on February
22, 2019, agreeing with the government's argument that the ban was valid
in accordance with the Tanzania Tax Laws.
Following the TRAB
decision, the mining firm remained with one way to resolve the dispute
through the International Court in the UK where the case was strongly
opposed by state advocates under the Solicitor General.
But, before the
hearing started on July 22, 2019, Acacia lawyers informed the Tanzanian
government of the intention to suspend the hearing to allow Barrick Gold
Corporation to complete the ongoing negotiations with Tanzania.
Through the
statement by Acacia's Chief Executive Officer Peter Geleta on July 19,
2019, the company requested for the stay to allow Barrick to complete
the sale of all Acacia shares owned by minority shareholders.
"The statement of
Mr Geleta clearly confirms that Acacia was not able to win the case and
that is why they agreed with Barrick company to buy it after a
long-running dispute," the Solicitor General said.
Mr Geleta's message
was directed to Acacia employees, requesting them to remain calm and
wait for the conclusion of negotiations between Barrick and Tanzania.
It is stated that
Acacia's Chief Executive Officer has made it clear that it will provide
relief for the company's current situation with its employees and
completely end the tax dispute that existed.
Acacia had once
made the statement that they were not aware of the ongoing negotiations
between Barrick Company and Tanzania. But, Acacia's acceptance of the
purchase and consenting to Barrick to continue negotiations with
Tanzania prove that Acacia's claims against the Tanzanian government
were unfounded.
"Acacia's request
for suspension of the hearing of the case in court is one of the proofs
that the procedure used by Tanzania to deal with corruption in the
mining industry in the country was beneficial to the nation," the
solicitor general said.
The completion of
sale of shares allows the Tanzania to reach an agreement with Barrick
company, heralding new era in the country's mining sector.
The move, according
to the statement, will essentially enable Tanzania, which
non-shareholder in the MDA Agreements to become one of the shareholders
of the company to be established through a joint venture.
Additionally, the initiative will enable the government to effectively manage the mining profits in the country.
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