Acacia proceeds with arbitration regarding mining rights in Tanzania

Acacia announced that notices of arbitration were served in Tanzania on behalf of Bulyanhulu Gold Mine Limited, the owner of the Bulyanhulu mine and Pangea Minerals Limited which the owns Buzwagi mine.

The notices refer the current disputes between the Government of Tanzania and each of BGML and PML to arbitration. This is in accordance with the dispute resolution processes agreed by the Government of Tanzania in their Mineral Development Agreements with BGML and PML. 

In a move that shocked the mining industry, the Tanzania Government announced new legislation that could result in renegotiating existing exploration and mining contracts. 

Multinational companies like AngloGold Ashanti, Acacia Mining and Petra Diamonds may be severely affected by the three new bills, tabled by government on 29 June 2017. The bills, the Natural Wealth and Resources (Permanent Sovereignty) Act 2017, the Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms) Act 2017 and the Written Laws (Miscellaneous Amendments) Act 2017 were passed by the Tanzanian Parliament on 3 and 4 July 2017.

Tanzania
Image credit: Acacia

According to the Tanzanian Government the legislation is designed to address the mining and export of precious metals and metal concentrates from existing operations in Tanzania. These operations have been the focus of a recent review conducted by a presidential committee. The bills were passed despite pleas for more time from an association representing the mining companies. Tanzania is Africa’s fourth-largest gold producer but remains one of the poorest countries in the world.

The Government of Tanzania has informed Barrick Gold Corporation that at this stage it wishes to continue its dialogue. Although Acacia will not participate directly in the discussions, the company is prepared to work with Barrick as necessary to support potential discussions. Any potential resolution that might be identified due to such discussions will be subject to approval by Acacia. The company has maintained that all three of its mines will continue to operate. 

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