Sun, Mar 26, 2017 - Page 16 News List

Tanzania’s ban on concentrate exports takes toll on Acacia

Reuters, TORONTO

Acacia Mining PLC is losing more than US$1 million in revenue each day at two mines in Tanzania because of the country’s ban on exports of gold and copper concentrates, the London-listed company said on Friday.

Acacia, majority owned by Barrick Gold Corp, said it can produce and store concentrate at its Bulyanhulu and Buzwagi mines beyond the end of next month, but must assess how long that can continue if the ban remains.

“We are taking a range of actions to help manage this financial impact,” Acacia said in a statement.

Acacia, the largest miner in Tanzania, said talks with government officials have failed to result in the ban being lifted.

The Tanzanian Ministry of Energy and Minerals halted the export of unprocessed ore on March 3, following Tanzanian President John Magufuli’s call for the construction of more gold smelters in the country, Africa’s fourth-largest gold producer.

Acacia said it has offered to partner with the government on a new study assessing the economic potential of building a smelter in Tanzania.

It is unlikely Acacia will emerge from the ban unscathed, Panmure Gordon & Co analyst Kieron Hodgson said.

“The ultimate resolution will probably contain a commitment to the government for a smelter or an additional processing step to be implemented at each of the operations, as well as a possible change in the company’s advantageous taxation arrangements, or a bit of both,” Hodgson said in a note to clients.

More than 99 percent of gold mined in Tanzania is already processed there.

Concentrate — mixed silver, copper and gold — is challenging to separate and needs complex technology, the chairman of industry body Tanzania Chamber of Energy and Minerals has said.

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