Acacia seeks arbitration after Tanzania tears up mining contracts
Tuesday July 04 2017
Tanzania's largest miner Acacia, on Tuesday said it was seeking an arbitrator to resolve its friction with the Tanzanian government. This comes a day after the country passed two laws to force companies to re-negotiate their contracts.
Tanzania's President John Magufuli has has been on his crusade to the mining community with a series of actions since he took over power in 2015 in a bid to champion for revenue distribution to the people.
Speaking at a public rally, Magufuli said he had decided to rush through bills passed on Monday because Tanzania was fighting an economic war.
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"We couldn't wait to pass the laws because of the large scale theft taking place in the mining sector," Magufuli said.
Acacia, majority owned by Barrick Gold, said in a statement that notices of arbitration were served on behalf of companies that own its Bulyanhulu and Buzwagi mines, hit by an export ban.
"The serving of the notices at this time is necessary to protect the Company," Acacia said.
"But, this notwithstanding, Acacia remains of the view that a negotiated resolution is the preferable outcome to the current disputes and the company will continue to work to achieve this."
In an ongoing case, Tanzania accused Acacia of tax evasion in 2016 and was this year accused of operating illegally. The miner denies the allegations.
In March, Magufuli imposed an export ban on unrefined minerals to boost growth of local smelters, rather than allowing profits from processing to be accrued abroad.
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International mining companies have said mining must help to enhance the economic development of Tanzania, but the relationship has to be a fair partnership.
Shares in Acacia have nearly halved since the export ban in March.
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