Acacia Mining on edge as Tanzania ban on gold exports contiunes
Updated : 09:42
Acacia Mining said there has been no change on the Tanzanian government's ban on exports of gold and copper ore despite lobbying by the company, which is losing more than $1m per day in revenue.
The FTSE 250 miner has been “engaging with key government official and other stakeholders” in order to lift the ban which has been in effect since 3 March.
The Tanzanian government banned copper and gold concentrate exports as an effort to ensure that the mineral value-addition activities are carried out within the country.
Acacia, which on Wednesday called off £3bn merger talks with Canadian rival Endeavour, has three gold mines in Tanzania that also produce copper.
The company said on Friday that it has offered to support and partner with the government in a new study by third party experts to assess the economic potential of building of a smelter in Tanzania capable of processing concentrate.
At its Bulyanhulu and Buzwagi mines, the company claims it is losing more than $1m per day in revenue and it is taking a “range of actions to help manage” the financial impact.
The mines are continuing to operate as normal and have sufficient capacity to place gold and copper concentrate into containers on site beyond the end of April and during April the company will reassess how long it can continue to produce as normal if the ban remains in place.
Yuen Low, analyst at Shore Capital said that the trouble with the 'carrot' to the Tanzanian government of Acacia helping to build a smelter in the country is that government officials may see it as a delaying tactic, and that the officials were likely taking inspiration from the "relative success arising from the Indonesian government’s dogged persistence with a similar ban" with nickel, where there is more value-added from smelting but less so in copper.
Low added that the Acacia and Endeavour failed merger could be because the export ban may have led Endeavour to seek improved terms in its favour which Acacia may not have found palatable.