Acacia Mining is losing $1m a day because of Tanzania's export ban on gold concentrate

Courtney Goldsmith
Follow Courtney
Acacia's troubles are just beginning (Source: Getty)

Acacia Mining has revealed just how much of an impact the Tanzanian government's ban on gold and copper concentrate exports is hurting its business.

The miner is losing revenue of more than $1m (£801,000m) per day at its Bulyanhulu and Buzwagi mines.

While Acacia's mines have been operating normally up to now, it added it doesn't know how long it can continue to production after April if the ban remains in place.

"During April we will reassess how long we can continue to produce as normal if the ban remains in place and what other measures may be necessary. Up to that point we will focus on engaging with the relevant authorities in Tanzania with a view to resolving the stoppage of the export of gold/copper concentrate and other related issues as soon as possible."

The Tanzania-focused miner, which makes about 30 per cent of its revenues from mining gold and copper concentrate in the country, said it is taking "a range of actions" to manage the financial impact.

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 is the largest gold miner in the country, said it is fully committed to supporting local businesses. "To this end we have offered to support and partner with the government in a new study by third party experts to assess the economic potential of building of a smelter in Tanzania capable of processing our concentrate," the firm said in a statement.

Yuen Low, analyst at Shore Capital, said the trouble with this is that government officials may simply perceive it as a delaying tactic.

Earlier this week, Acacia's shares faltered after it lost out on a potential £3bn tie-up with Endeavour Mining. Low said: "We wondered whether this was because the concentrate export ban may have led to Endeavour to seek terms improved in its favour (we know we would have), which Acacia may not have found palatable."

Related articles