Acacia Mining has said it will cut down on operations in its largest gold mine in Bulyanhulu, Tanzania, in a process that will see it reduce workforce by about 400.
The gold producer, which has been locked in tax dispute with the government, said it will stop mining and processing of underground ore in the next four weeks.
In a statement on Monday, the firm said the scale-down will be completed in three months and will include one-off costs of up $25 million.
"Regrettably, the implementation of this programme will lead to a significant reduction in the workforce from the current 1,200 employee and 800 contractor roles," the miner said.
"As a result of the planned reduction in operating activity at Bulyanhulu, Acacia now expects annual production to be in the order of 100,000 ounces lower than the bottom of the previous guidance range of 850,000-900,000 ounces."
In late July, the Tanzania Revenue Authority claimed that Acacia, through Bulyanhulu Gold Mine, owes $154 billion, and $36 billion from the Buzwagi mine.
The tax demand in addition to a concentrate export ban has put a strain on the London Stock Exchange-listed firm cash flow.
In its unaudited results for the six months to June 2017, the gold producer said it was considering pulling back operations