Tanzania to Renegotiate Mining Contracts with New Laws

Just a few days after having introduced its draft new mining laws, the parliament of Tanzania has passed the three bills on 3rd July 2017, allowing for the government to renegotiate mining contracts.

The parliament has passed The Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms)] Bill, 2017, The Natural Wealth and Resources (Permanent Sovereignty)] Bill, 2017 and The Written Laws (Miscellaneous Amendments)] Bill, 2017.

The new laws follow the introduction in March 2017 of a ban on the export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel, and silver.

This has particularly affected Acacia Mining (LSE: ACA), Tanzania’s largest gold miner, wich has been accused by the Government of playing down the amounts of declared exported minerals until the introduction of the ban.

Acacia has strongly refuted the accusation, reiterating that “the exporting of the concentrate takes place in full compliance with Tanzanian law and the legal agreements that we have with the Tanzanian Government.”

Today, Acacia announced that Notices of Arbitration were served in Tanzania on behalf of Bulyanhulu Gold Mine Limited (“BGML”), the owner of the Bulyanhulu mine, and Pangea Minerals Limited (“PML”), the owner of the Buzwagi mine.

“This is in accordance with the dispute resolution processes agreed by the Government of Tanzania in their Mineral Development Agreements with BGML and PML,” Acacia explains.

The company adds that “The serving of the Notices is necessary to protect the Company, but, this notwithstanding, Acacia remains of the view that a negotiated resolution is the preferable outcome to the current disputes and the Company will continue to work to achieve this.”