The management Acacia Mining has been locked out of talks with Tanzanian government about resolving a tax dispute after its majority shareholder Barrick Gold intervened.
Acacia was forced to admit that it would not be a party to the negotiations between Barrick and Tanzania, which are seeking an end to a four-month dispute over royalties the company allegedly owes on gold exports.
Acacia told investors that any deal reached in the talks would be subject to its approval, and that it would “work with Barrick as necessary to support such discussions”.
Canadian company Barrick, which owns 63pc of Acacia, is hoping to convince President John Magufuli to lift an export ban on gold concentrate, the powdered form of the metal, which is shipped out of Tanzania to be turned into gold bars.
Barrick is also hoping to reach a settlement with Tanzania over claims that Acacia has been under-reporting the amount of the concentrate it exports by a factor of ten - essentially amounting to a multi-million dollar fraud. The dispute is costing Acacia around $1m from lost export revenue.
The move towards formal talks follows a meeting between John Thornton, executive chairman of Barrick, and President Magufuli last month, and comes after Tanzania’s parliament voted through a trio of bills that could dissolve the underlying contracts held by natural resources producers in the country.
"This is a necessary step to protect the interests of our stakeholders in light of the ongoing dispute, however we still believe a negotiated resolution is the best outcome and will continue to work towards this," an Acacia spokesman said.
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