Acacia Mining shares plunged to a more than three-year low yesterday after the Tanzania government demanded the company to pay almost $190 billion (Sh424 trillion) worth of unpaid taxes and fines.
The London Securities Exchange (LSE)-listed equities tumbled as much as 17 per cent yesterday morning after it said it had received a series of notices from the Tanzania Revenue Authority relating to the alleged missed tax payments.
The problems of Acacia’s mines in Tanzania started since March when President John Magufuli banned the export of unprocessed mineral concentrates in an effort to boost the country’s domestic smelting industry. The government has since accused Acacia, one of Africa’s largest gold producers and one of Tanzania’s largest private employers, of illegally under-reporting the amount of metal in its shipments and evading billions of dollars of taxes. Acacia warned last week that it will be forced to mothball its flagship mine if it can’t reach an agreement with the government by the end of September, having burned through almost half its cash pile in the past six months.
Shares in the company had already fallen more than 60 per cent since the start of the dispute.
“It’s not easy to see immediate changes as the counter is not active since it cross-listed. I think no local investor has ever bought the shares through DSE,” said Orbit Securities general manager Juventus Simon.
The revenue authority’s assessments said Acacia owes the government a total of approximately $40 billion in unpaid taxes plus a further $150 billion in penalties and interest. Acacia has consistently denied any wrongdoing and said it disputes the tax assessments. It added that it “is considering all of its options and rights and will provide a further update in due course”.
Credit: All Africa