Acacia in hot water over spillage

Acacia Mining has been warned by the Tanzanian government that if it does not stop waste water pollution from its North Mara mine by the end of the month it could be shut down.

London-listed Acacia, which is 64% owned by Canada’s Barrick Gold, said the spillage was due to vandalism or theft of sections of pipe used to transport water from the polishing pond to the tailings storage facility.

Staff at the mine switched off of the pump used to transport water to the storage facility, which led to the water level in the polishing pond overflowing.

Following these remedial actions, the temporary overspill from the pond has been stopped, Acacia said.

"The mine has welcomed the support of the government on resolving this issue, and is working closely with the authorities to implement improvements to security measures around the polishing pond in order to help prevent any reoccurrence."

Acacia said it was also working with the government over its concerns about seepage from the storage facility.

In January, the government issued a directive to the mine to build a new storage facility, for which planning and design has begun.

Broker Peel Hunt said: "Today's announcement is yet another sentiment negative for ACA, with North Mara accounting for the majority of the cash flows (~65%) for the company.

"The government continues to lay on pressure on ACA with respect to the resolution process as well as the operating environment. ACA should be able to address this within a month, but the language of the brief announcement is yet another near term sentiment and operating negative for the company."