In mining dispute with Tanzania, Acacia agrees to more tax
Mining company Acacia agreed Friday to pay more royalties to Tanzania's government as it seeks an end to a dispute over alleged underreporting of production and profits.
President John Magufuli accused the London-listed company, whose largest shareholder is Canadian Barrick Gold, of "theft" after a government enquiry concluded last month that Acacia had undervalued its production of gold and other minerals for years, evading billions of dollars in taxes and royalties.
"To minimise further disruptions to our operations we will, in the interim, satisfy the requirements imposed as regards the increased royalty rate applicable to metallic minerals such as gold, copper and silver of six percent (increased from four percent) in addition to the recently imposed one percent clearing fee on exports," Acacia said in a statement.
Tanzania recently passed a new law governing the mining sector. Acacia said it "continues to monitor the impact of the new legislation in light of its Mineral Development Agreements with the Government of Tanzania."
Barrick boss John Thornton met with Magufuli last month in a bid to settle the ongoing dispute.
Tanzania is rich in minerals and ranks fourth among gold producers on the continent. Gold is the country's leading mineral export and one of its primary sources of revenue.
It also exports copper, nickel, silver, diamonds and other precious stones such as tanzanite.