TORONTO (Reuters) - Acacia Mining is losing more than $1 million in revenue each day at two mines in Tanzania because of the country’s ban on exports of gold and copper concentrates, the London-listed company said on Friday.
Acacia, majority owned by Barrick Gold, said it can produce and store concentrate at its Bulyanhulu and Buzwagi mines beyond the end of April, but must assess how long that can continue if the ban remains.
“We are taking a range of actions to help manage this financial impact,” Acacia said in a statement, without specifying any measures.
Acacia, the largest miner in Tanzania, said talks with government officials have failed to result in the ban being lifted.
Tanzania’s energy and minerals ministry halted the export of unprocessed ore on March 3, following President John Magufuli’s call for the construction of more gold smelters in the country, Africa’s fourth-largest gold producer.
Acacia said it has offered to partner with the government on a new study assessing the economic potential of building a smelter in Tanzania.
Earlier this week, Acacia and Canada’s Endeavour Mining Corp said merger talks had ended. Endeavour, which operates four mines in West Africa, announced in January that it was discussing a deal with Acacia.
It is unlikely Acacia will emerge from the ban unscathed, said Panmure Gordon analyst Kieron Hodgson.
“The ultimate resolution will probably contain a commitment to the government for a smelter or an additional processing step to be implemented at each of the operations, as well as a possible change in the company’s advantageous taxation arrangements, or a bit of both,” he said in a note to clients.
More than 99 percent of gold mined in Tanzania is already processed there. Concentrate that is exported - mixed silver, copper and gold - is challenging to separate and needs complex technology, the chairman of industry body Tanzania Chamber of Energy and Minerals has said.
Like other African nations, Tanzania is on a drive to add value to its exports rather than send raw materials abroad.
Reporting by Susan Taylor in Toronto and Rahul B in Bengaluru; Editing by Gopakumar Warrier and Grant McCool
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