(Bloomberg) -- Acacia Mining Plc hit another roadblock in Tanzania, two days before a deadline for its parent Barrick Gold Corp. to make an offer to minority shareholders.
Tanzania ordered the company's core gold mine, North Mara, to stop using its tailings storage from Saturday because of alleged seepage from the facility, Acacia said in a statement on Wednesday. The miner also said an international arbitration with Tanzania could be postponed to give the government time to settle a wider dispute through talks with Barrick.
Acacia shares fell as much as 2.6% in London and ended the session down 0.1%.
Barrick, which owns 64% of Acacia, said in May it might buy out minorities in an all-stock deal, but a formal offer has been delayed since then. The current deadline to submit a bid is Friday as Barrick responds to an independent report that attaches a higher value to Acacia than the one the Toronto-based mining giant has proposed.
The timing of the decision to halt the tailings storage has nothing to do with the buy-out situation, Doto Biteko, Tanzania's mining minister, said in an interview. “This has been a long-running problem since 2009, and we have warned Acacia several times, but they have not rectified this problem.”
Two years ago, Tanzania imposed an export ban on two of Acacia's units and handed the miner a $190 billion tax bill. Since then, the company's position in the country has deteriorated further, while its relationship with Barrick has become increasingly strained.
Acacia said Wednesday that it will “immediately seek” a stay of their international arbitration, for which hearings were due to start next Monday. The company is also reaching out to the Tanzanian government to seek clarification on the ban.
Earlier this month, Acacia said it produced record monthly gold output of 47,849 ounces at the North Mara mine in June.
--With assistance from Danielle Bochove and Dylan Griffiths.
To contact the reporters on this story: Elena Mazneva in London at emazneva@bloomberg.net;Ken Karuri in Dar es Salaam at kkaruri@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, ;Luzi Ann Javier at ljavier@bloomberg.net, Steven Frank
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