Tanzania's gold ban stalls merger talks between Acacia Mining and Endeavour

 
Courtney Goldsmith
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The merger would create a gold miner with more than 1m ounces of annual production (Source: Getty)

Tanzania's ban on gold and copper exports has put talks of a £3bn merger between Acacia Mining and Canada's Endeavour on the back burner.

The two firms, which are some of Africa's biggest gold miners, started speaking of a potential merger in January.

However, at the beginning of March, Tanzania's President put a surprise ban on gold and copper concentrate exports so minerals that are mined in the country are processed there as well and benefit Tanzania's economy.

Acacia, which makes about 30 per cent of its revenues from mining gold and copper concentrate in Tanzania, said it is "urgently seeking further clarification", but the government has been slow to respond.

A source close to Endeavour said strong short and medium-term growth means the Canadian firm doesn't need the deal.

Read more: Acacia Mining's shares surge as it doubles its annual dividend

The merger would help Acacia diversify its portfolio, and the firm will likely look to resuming talks as soon as possible.

However, the FTSE 250-listed company lost a significant portion of its market capitalisation after the ban was imposed. Acacia's shares initially fell as much as 19 per cent, and they were still around 15 per cent lower at the close Friday.

Acacia did not initially respond to a request for comment.

Read more: London-listed Acacia Mining accused of "sophisticated tax evasion"

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