Losses pile up for subsidiary of Barrick Gold following tax row with Tanzanian government

Acacia Mining, the African subsidiary of Canada’s Barrick Gold, is losing more than US$1 million in daily revenue after Tanzania has extended a ban on the export of gold concentrate.

The government of Tanzania is accusing Acacia, along with a host of other miners, of massive tax evasion and claims that they have been systematically misstating their gold production figures.

Export of gold concentrate was halted on 3 March, with Tanzania saying it wanted more gold to be processed in-country to create more jobs and revenue. Barrick has pushed for an end to the ban, but so far without success.

The company, which strongly denies any wrongdoing. says it might have to revise its full-year year forecasts as a result of the dispute.

Tensions flared last week when Tanzanian President John Magufuli announced that an investigation had found evidence of Acacia “under-invoicing” the gold and other minerals in the shipping containers in its exports.

Acacia hit back, saying if the allegations were correct it would be the world’s third largest gold producer, with more gold produced from its three mines than AngloAshanti extracts from its 19.

“If the committee’s findings were accurate and Buzwagi [mine] produces and sells 10 times more gold than it declares, Acacia would be extending mining at Buzwagi for many years. The reality is that Buzwagi is a low-grade mine and is running out of commercially viable gold,” the company said.