Acacia threatens to sue Tanzania over dispute
Acacia Mining has noted it’s increasingly concerned about the safety of its members of staff and the challenging operating environment, which may impact the firm’s business outlook. PHOTO|FILE
What you need to know:
- Acacia Mining says it may take the government of Tanzania to international court if the two parties fail to reach a negotiated resolution over ongoing disputes.
- The company recorded a quarterly net profit of $11.9 million in the three months ended September compared to $16 million recorded in the same period last year.
Dar es Salaam. Acacia Mining has threatened to sue Tanzania in an international court should the two parties fail to reach a negotiated resolution over ongoing disputes.
The company also wants to use a bilateral investment treaty between Tanzania and Britain to force direct talks over their concerns.
Acacia’s interim chief executive officer Peter Geleta said yesterday that the company was increasingly concerned about the safety of its staff and the challenging operating environment, which may impact the firm’s business outlook.
He said there had been a “significant escalation of government actions” against Acacia subsidiaries – Bulyanhulu and North Mara gold mines and Pangea Minerals – and employees in recent weeks.
“I am particularly concerned about the criminal charges now being brought against several current or former employees over the past week,” Mr Geleta said in a quarterly performance report published yesterday.
“We will also be reaching out to the government to seek the opportunity for direct dialogue regarding the ongoing disputes between the government, the company and the broader Acacia Group, and also to inform the government that failing a negotiated resolution, the company may need to pursue claims under the relevant bilateral investment treaty.”
An investment treaty between Tanzania and Britain could compel the country to have direct dialogue with Acacia over a period of six months, Mr Geleta told Reuters.
On Wednesday October 17, the Prevention and Combating of Corruption Bureau (PCCB) charged the three local subsidiaries, an employee and a former member of staff for money laundering and tax evasion.
Bulyanhulu relations manager Alex Lugendo and the former Acacia vice president for corporate affairs Deo Mwanyika face 39 counts over transactions involving $4.7 billion (about Sh10 trillion) in the economic sabotage case number 31/2018.
All the accused had pleaded not guilty to all charges which include tax evasion, conspiracy, a charge under organised crime legislation, forgery, money laundering and corruption.
The two accused individuals were still in custody as the alleged offences are not bailable.
On October 10, the firm’s commercial manager Maarten van der Walt was released on bail after being charged with corruption on allegations dating back to 2013 at North Mara.
“Each of the recent charges relate to matters which are subject to or have been introduced into the existing contractual arbitrations with the (government),” Acacia said.
Acacia in July 2017 began international arbitration for two of its mines against Tanzania after the government tore up mineral rights agreements, forcing a re-negotiation of those contracts.
The London-listed company is currently waiting for its largest shareholder, Barrick Gold, to negotiate a settlement with Tanzanian government which stopped Acacia from exporting gold concentrate 20 months ago. The government has slapped the miner with a bill of $190 billion in back taxes.
