Acacia Mining share price plunges on pullback from Tanzania operations at Bulyanhulu mine

Lynsey Barber
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A photo taken on November 29, 2011 shows
Tanzania has cracked down on mining exports (Source: Getty)

The FTSE 250 mining firm Acacia has said it will dial back its operations in Tanzania, where it has been locked in a bitter row with the country's government.

That sent shares plunging more than 13 per cent as markets opened on Monday morning.

The miner said the government's decision in March to ban exports of gold and copper concentrate has impacted 35 per cent of its production costing it $210m to date.

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It has now decided the Bulyanhulu mine is "unsustainable" and will reduce operations and spending there "in order to preserve the viability of our business over the longer term".

As a result, Acacia has slashed production forecasts by 100,000.

It will hold onto assets and equipment in case operations can resume and talks with the government are ongoing.

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Tanzania banned the export of unprocessed metals earlier this year and has accused it of avoiding tax, slapping it with a $190bn bill.

Acacia's other mine in the country, Buzwagi, will continue running.

In an update to the market, the compnay said "it remains hopeful that the ongoing discussions between Barrick and the government of Tanzania will lead to a resolution to the concentrate ban and operating environment and enable the re-assessment of the operating situation at Bulyanhulu in the near future."

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