Acacia’s North Mara hit with $130,000 fine as Tanzanian Govt. renews hostilities

Acacia's North Mara

ACACIA Mining’s North Mara mine – which has escaped flak from the Tanzanian government in respect of under-payment of taxes – has been ordered to pay $130,000 for alleged breaches of environmental regulations in the East African country.

The UK-listed company said in an announcement today that it had received an Environmental Protection Order for 300 million Tanzanian shillings. It added that it had not yet received any supporting reports, findings or testing data related to the order. Acacia said it was assessing the technical basis for the alleged non-compliances.

The Tanzanian government and Acacia have been locked in a dispute over allegations the firm owes the government $190bn in unpaid taxes dating back two decades. Exports from two of Acacia’s mines – Bulyanhulu and Buzwagi – were suspended, forcing Acacia to idle Bulyanhulu’s production in order to save costs.

Acacia’s 64% shareholder, Barrick Gold, struck an agreement with the government that Acacia pay it $300m as a goodwill gesture, but nothing has been paid to date. The merger of Barrick with Randgold Resources, now complete, is thought to have been a distraction.

In the meantime, the Tanzanian government has laid allegations against three of Acacia’s former and current employees of corruption relating to certain property deals. Two of the employees were subsequently charged and detained without prospect of bail in terms of Tanzania’s law dealing with the alleged misdemeanours.

The latest government findings, therefore, can only be interpreted as a way of heaping pressure on Acacia. In addition to the alleged breaches of environmental regulations, the Tanzania’s National Environment Management Council (NEMC) has filed a report regarding discharges of a hazardous substance at the North Mara mine.

Acacia said today that the discharge the NEMC had detected relates to a known and long-standing seepage issue from the Tailings Storage Facility at North Mara about which the Tanzanian government was also aware. A system of pumps returns the seeped discharge to the mine and ensures hazardous substances are kept away from any public water systems, the company said.

And in a third volley, Acacia said it noted media reports the Tanzanian government had issued a directive that Acacia build a new tailings storage facility at North Mara. Acacia confirmed it had received a verbal request for the tailings facility, but nothing had been issued in writing, or provided in the form of a directive.

“The mine has already recognised the need for additional tailings management and storage capacity to meet its life of mine plans and, while the mine does not yet have detailed or fully costed plans or project schedules for the construction of a new facility, Acacia expects that a new TSF [tailings storage facility] is likely to be an economically viable alternative to further expansions of the existing TSF at the mine,” it said in a statement.

The deteriorating relationship between Acacia and the Tanzanian government will be a concern to Mark Bristow, the newly appointed CEO of Barrick which has the role of lead negotiator on the various disputes between Acacia and the government.

Bristow previously identified North Mara as the kind of tier one asset that Barrick Corporation wanted in its organisation.