MARKET NEWS
OCTOBER 19, 2018 / 10:39 AM / UPDATED AN HOUR AGO
UPDATE 1-Acacia Mining looks for new ways to unlock Tanzania dispute
(Updates with detail, quotes)
LONDON, Oct 19 (Reuters) - Acacia Mining could use a bilateral investment treaty to force face-to-face talks with Tanzania over a long-running tax dispute that has seen the company hit with a huge tax bill and spilled over into the courts.
Acacia’s parent Barrick Gold has been negotiating with the Tanzanian government on behalf of London-listed Acacia for 19 months but no final settlement has been reached.
An investment treaty between Tanzania and Britain could compel the east African country to have direct dialogue with Acacia over a period of six months, interim chief executive Peter Geleta told Reuters.
“It’s a further right that we have under the bilateral agreements between the countries,” he said.
“But our first intention is to get parties to the table and to come up with a negotiated resolution, you don’t want to fight these fights in court, its not what we want to do.”
Tanzania’s President John Magufuli has sent shockwaves through the mining industry with a series of actions since his election in 2015 that he says are intended to distribute revenue to the Tanzanian people.
Acacia in July 2017 began international arbitration for two of its mines against Tanzania after the government tore up mineral rights agreements, forcing a re-negotiation of those contracts.
Tanzania banned the export of raw minerals in March 2017, introduced tough laws and hit Acacia with a $190 billion tax charge.
The dispute ratcheted higher this week when Tanzanian authorities charged three of Acacia’s local subsidiaries, an employee and a former staffer with money laundering and tax evasion.
“Each of the recent charges relate to matters which are subject to or have been introduced into the existing contractual arbitrations with the (government),” Acacia said in a statement.
“The company is currently considering its legal position and is concerned about the increasing risks to the safety and security of its people.”
The two accused individuals were still in custody as the alleged offences were not eligible for bail. Acacia said all the accused had pleaded not guilty.
Shares in Acacia were down 4.5 percent by 0815 GMT and have lost more than 70 percent since a ban on the export of unprocessed minerals was instituted last year.
On Thursday, Acacia posted an 11 percent decline in core earnings due to lower production and a softer gold price.
(Reporting by Zandi Shabalala Editing by Kirsten Donovan/Keith Weir)
UPDATE 1-Acacia Mining looks for new ways to unlock Tanzania dispute | Reuters