Acacia falls 17% as Tanzanian government demands $190bn in tax dispute
Shares in Acacia Mining touched a more than three-year low on Tuesday morning after its battle with Tanzanian authorities escalated as the government demanded Acacia pay almost $200bn worth of unpaid taxes and fines.
Acacia has been locked in a dispute with Tanzania’s president John Magufuli since March, when he banned the export of unprocessed ores in an effort to boost the country’s domestic smelting industry.
The government has since accused Acacia, one of Africa’s largest gold producers and one of Tanzania’s largest private employers, of illegally under-reporting the amount of metal in its shipments and evading billions of dollars of taxes.
Acacia warned last week that it will be forced to mothball its flagship mine if it can’t reach an agreement with the government by the end of September, having burned through almost half its cash pile in the past six months.
Shares in the company had already fallen more than 60 per cent since the start of the dispute, and they tumbled as much as another 17 per cent on Tuesday morning after it said it had received a series of notices from the Tanzania Revenue Authority relating to the alleged missed tax payments.
The revenue authority’s assessments said Acacia owes the government a total of approximately $40bn in unpaid taxes plus a further $150bn in penalties and interest. Acacia has consistently denied any wrongdoing, and said it disputes the tax assessments. It added that it “is considering all of its options and rights and will provide a further update in due course”.
Acacia revealed the news shortly before markets closed on Monday, prompting the sharp share price drop as markets opened on Tuesday. The shares hit a low of 152.8p, though by publication time they had pulled back some of their losses and were down 7.8 per cent at 170p.