ONOMO Hotel Dar es Salaam

World Largest Gold Mining Comment on Tanzania Ban on Mineral Concentrate Exports

Barrick Gold Tanzania Mineral Ban

Barrick Gold (NYSE:ABX) (TSX:ABX), the largest gold mining company in the world, commented on the potential impact of the ongoing ban on mineral concentrate exports affecting the operations of its Tanzanian subsidiary Acacia Mining (LSE:ACA).

Barrick holds a 63.9% equity interest in Acacia, although the company is operated independently, Barrick indicates.

Financial results from Acacia are consolidated for accounting purposes. Cost and production information from Acacia is presented on an attributable basis in Barrick’s quarterly and annual mine statistics and annual guidance.

TanzaniaInvest Whatsapp Channel

Barrick’s current 2017 guidance assumes a contribution of 545,000-575,000 ounces of gold (63.9% basis) from Acacia, at a cost of sales of USD 860-USD 910 per ounce, and all-in sustaining costs of USD 880-USD 920 per ounce.

Acacia operations at the Bulyanhulu and Buzwagi gold mines are being impacted by the current ban on concentrate exports from Tanzania, Barrick reminds.

Acacia’s impacted operations account for approximately 6% of Barrick’s 2017 gold production guidance, and in total for approximately 10% of Barrick’s 2017 gold production guidance.

“Barrick is offering Acacia its full support as Acacia works to resolve this matter with the government of Tanzania. Barrick will evaluate any necessary adjustments to its full-year outlook should Acacia determine a revision to its own 2017 guidance is required”, Barrick’s press release reads.

Tanzania Mineral Concentrates Exports Ban & Investigation

Tanzania issued a ban on the export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel and silver, with effect from 2nd March 2017, and established two special committees to examine the extent, types and values of minerals contained in mineral sand in containers for export in various locations in the country.

RELATED:  Buckreef Gold Project Set to Double Production with New Mill Expansion

The ban heavily affected Acacia Mining, who reported a reduction in sales of almost 35,000 ounces lower than production in its results for Q1 2017, because of the ban, the company explains.

The results of the investigation of the first committee were released on 24th May 2017. They identify major discrepancies in the average concentration of these minerals, per ton of mineral sand, resulting in losses of revenue from royalties.

On the same day, President Magufuli revoked the appointment of the Minister of Energy and Mines Prof. Sospeter Muhongo, and dissolved the board of directors of the Tanzania Minerals Audit Agency (TMAA), the government’s body responsible for monitoring and auditing of mining operations, and suspended its Chief Executive Officer.

However, Acacia discredited the committee’s findings, as these imply that Bulyanhulu and Buzwagi mines each produce more than 1.5 million ounces of gold per year.

This would mean they are the two largest gold producers in the world; that Acacia is the world’s third largest gold producer; and that Acacia produces more gold from just three mines than companies like AngloGold Ashanti produce from 19 mines, Goldcorp from 11 mines, and Kinross from their 9 mines, Acacia explained.

Acacia will make further detailed observations once it receives the committee’s full report.

Related Posts