THE Government of Tanzania (GoT) upped the ante on Acacia Resources, the UK-listed gold miner with which it is locked in a two-year, $190bn tax claim.
The East African government today ordered Acacia to cease operations at a tailings storage facility (TSF) at the North Mara mine. This came even as Acacia applied for a stay in proceedings with the International Court of Arbitration in order that its majority shareholder, Barrick Gold, settle the tax dispute with the GoT. The GoT has refused to deal with Acacia on the matter and has since insisted Acacia is not a deal signatory.
This has led to Barrick seeking to buy shares in Acacia it doesn’t already own. A proposal to buy the shares has been suggested to minority shareholders who have responded negatively, saying the offer undervalues Acacia. A final proposal on Barrick’s original terms has twice been extended with the latest offer deadline falling due on Friday (July 19).
The latest twist of the knife sees the GoT claim North Mara’s TSF is continuing to seep contaminants into nearby water sources. It wants Acacia to close the TSF even though the firm insists the seepage has been stemmed.
As with the allegations regarding the unpaid tax sum, the claims regarding the TSF have not been supported with proof by the GoT.
The GoT has previously issued Acacia with a fine and an order to construct a new TSF at the mine after previous tailings seepage. Acacia said it was progressing with the planning and development of a new TSF.
Acacia said in an announcement that the Tanzanian National Environment Management Council (NEMC) had issued the North Mara mine with a prohibition notice which orders the company to cease use of its TSF by July 20.
The notice will be effective until the NEMC is satisfied that the North Mara mine has taken measures to contain seepage from the TSF, said Acacia.
Acacia said that following receipt of an environmental protection order in May it had stemmed seepage from the TSF. “All seepage is and will be contained on the site, does not flow into the surrounding environment or present a risk of contamination to any public water source,” it said.
“Acacia is immediately reaching out to NEMC and to the GoT to seek clarification on the Notice received yesterday, including to request copies of any investigation reports or data upon which the Notice is based,” it said.
Acacia said on July 12 that it was seeking clarification regarding the timing of a proposed inspection of its North Mara mine in Tanzania after receiving a letter from the government. “The letter states that export permits for gold shipments from North Mara will be issued following completion of this inspection,” said Acacia at the time.
“Acacia is seeking clarification on the timing for completion of the inspection and will provide a further update in due course as appropriate,” it said.
As Acacia’s only fully operating asset, an inspection of North Mara’s production makes for ominous reading for the company’s minority shareholders who have been resistant to the valuation in Barrick’s proposed takeover.
Acacia produced good operating results in the second quarter, but it’s under enormous government pressure including the imprisonment of former and existing employees on yet-to-be-heard corruption charges.