05 Sep Acacia Mining to reduce operations at major Tanzanian gold mine amid export ban dispute
Acacia Mining (LSE:ACA) has signalled its intention to reduce operational activity at its Bulyanhulu gold mine in Tanzania as it faces up to an export ban.
Based on Acacia’s 2017 interim results the company said it will need to consider plugging operational activity and expenditure if the ban on copper/gold concentrate exports was not lifted by the end of Q3 2017.
Acacia, which has operations in Kenya, Burkina Faso and Mali but only operating mines in Tanzania, is in the midst of a bitter dispute with Tanzanian government and has been hit with a US$190 billion bill for alleged fraud and illegal operations.
“Acacia has therefore decided to commence a programme to reduce operational activity and expenditure at Bulyanhulu in order to preserve the viability of our business over the longer term,” the company statement read.
“This programme will include the preservation of all assets and equipment to enable the mine to resume ordinary course operations should the export ban be lifted and the operating environment stabilised.”
The escalating situation prompted the world’s largest gold producer Barrick Gold (TSX, NYSE:ABX), which holds a 64% interest in Acacia, to enter the debate in July in a bid to diffuse the conflict.
The export ban has so far this year affected 35% of Acacia’s production and led to a build up of around $265 million of concentrate inventory being stuck in Tanzania.
Acacia remains hopeful that a negotiated resolution can be found between Barrick and the government but nevertheless with the operational changes at Bulyanhulu the company will return to positive cash generation in 2018.
— Acacia Mining (@AcaciaMining) September 4, 2017