Miner to reap­praise Tan­za­nia op­er­a­tions if ban stays in place

The Star Late Edition - - BUSINESS REPORT - Reuters

TANZANIAN gold pro­ducer Aca­cia Min­ing will have to re­view its min­ing op­er­a­tions if the gov­ern­ment’s ban on gold and cop­per ore ex­ports re­mains in place, a senior ex­ec­u­tive said yes­ter­day.

Shares in Aca­cia, which is ma­jor­ity-owned by Bar­rick Gold, briefly touched a sixweek low, par­ing losses by 9am to trade down 3.7 per­cent af­ter it said first quar­ter core prof­its rose 25 per­cent to $82 mil­lion (R1.07bn) but cash flow was re­duced by $36m in part due to the ban.

The gov­ern­ment halted the ex­port of un­pro­cessed ore on March 3, fol­low­ing Pres­i­dent John Magu­fuli’s call for the con­struc­tion of more gold smelters in the coun­try, Africa’s fourth-largest gold pro­ducer.

“If we get to a point where it’s a pure stale­mate and we don’t see that di­a­logue there, then we are go­ing to have to reap­praise,” chief fi­nan­cial of­fi­cer An­drew Wray said, ad­ding ne­go­ti­a­tions con­tin­ued.

Non-es­sen­tial spend­ing in the quar­ter was pushed back in re­sponse to the ban and the com­pany would have to “re­ally take stock if it makes sense to con­tinue pro­duc­ing given the cash burn”, Wray said.

The ex­port ban ef­fects two of its three mines and the com­pany said it would re­assess the on­go­ing op­er­a­tion of both “over the com­ing weeks”.

“Clearly the mes­sage to the gov­ern­ment is to sort this out or peo­ple are go­ing to lose jobs (and the gov­ern­ment roy­al­ties),” In­vestec an­a­lysts said.

Aca­cia’s gold pro­duc­tion in the first quar­ter to­talled 219 670 ounces, how­ever, sales were lower by 34 926 ounces. – Reuters

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