President of Tanzania, Doctor John Magufuli
Acacia Mining shares plunge as Tanzania keeps ban on gold exports Government inquiry accuses group of under-reporting amount of metal in shipments
Read next Fast FT Acacia shares tumble after Tanzania keeps export ban Tanzania's president John Magufuli
Shares in Tanzania-focused gold miner Acacia Mining fell 30 per cent on Wednesday after the country accused it of under-reporting the amount of metal in its shipments and kept a ban on exports.
Acacia said an investigation by Tanzania’s presidential committee had found the value of minerals within concentrates in containers at the port city of Dar es Salaam was more than 10 times the declared amount.
The probe determined Acacia had “not fully declared all of the minerals contained in the concentrate and the directive halting the export of metallic mineral concentrates remains in place”, the company said in a statement.
The results of the investigation, which were announced by President John Magufuli, also led to the firing of the country’s minister for mines and the dissolution of the board of the Minerals Audit Agency. All of London-listed Acacia’s operating mines are in north-west Tanzania and the company says it is the largest foreign direct investor in the country.
Acacia has been unable to export since Tanzania issued a ban in March on exports of unprocessed gold and copper concentrate.
“We are seeking a full copy of the report and further clarification,” the company said. “Acacia reiterates that it fully declares everything of commercial value that we produce and pay all appropriate royalties and taxes on all of the payable minerals that we produce.”
Analysts said it was increasingly likely Acacia would have to temporarily shut down two of its three mines in the country. “Halting operations at Bulyanhulu and Buzwagi is a higher probability event now,” analysts at Citi said.
“As continued stockpiling eats up on working capital and also creates a logistics challenge to get the material out in the event of a resolution.”
Mr Magufuli took office promising a zero tolerance for corruption but his policies have also led to much of government grinding to a near halt as officials become too afraid to take decisions out of fear of being accused of graft.
The minister for mines and minerals, Sospeter Muhongo, is the third minister Mr Magufuli has axed since taking office 18 months ago. In March he fired Nape Nnauye, the information minister, after Mr Nnauye ordered a probe into a raid on a private television station by an ally of the president.
Mr Muhongo previously held the post under Mr Magufuli’s predecessor, Jakaya Kikwete, but resigned in January 2015 after being implicated in a scandal in which hundreds of millions of dollars was allegedly transferred from the central bank to various government officials.
Shares in Acacia, which is 44 per cent owned by Barrick Gold, fell 30 per cent to 328p.
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