Monday 24 June 2019 4:43 pm

Shareholder Barrick ‘undermined’ our efforts to negotiate $190bn tax bill, Acacia says

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Acacia Mining hit out at Barrick Gold today as the firms trade jibes over a potential takeover bid.

Acacia, a Tanzania-focused gold company, accused Barrick of undermining its attempts to negotiate with the country’s government.

Taxing problems

The miner has faced a tax dispute with the regime of President John Magufuli since 2017.

Magufuli claims Acacia under-reported the level of gold in its exports for decades and owes $190bn (£149bn) in back taxes.

Barrick, which owns two thirds of Acacia, sent a delegation to Tanzania in 2017 to speak directly to the regime.

But Acacia said today it “did not invite Barrick’s intervention,” and accused the shareholder of “undermining Acacia in Tanzania.”

“Acacia was continuing its own engagements with the highest levels of the Government of Tanzania at the time and had no reason to believe that these engagements would not continue,” the company said.

Meanwhile Barrick said it was exploring a bid to take Acacia private in May. It proposed buying out the minority shareholders in an all-share deal.

Acacia today disagreed with the way Barrick had valued the company, and questioned the time spent on Tanzania negotiations.

Barrick has said that the Tanzanian government has refused to negotiate directly with Acacia. While the two parties have reached an indicative deal, giving Tanzania a share of the proceeds from the gold mines, it has not been finalised.

Experts believe Magufuli will want to reach a deal before an arbitration case, brought by Acacia, starts in late July.

One City analyst said that Barrick would harm its public image if it did not table a new offer for Acacia, or deliver a deal with Tanzania.

“They have said for two years that they’re going to deliver a resolution or a solution to the dispute. In that sense, you either have to deliver the resolution, which they haven’t done, or you have to deliver a credible offer that will be accepted.”