Miner slumps as officials accuse it of tax dodging
Tanzania’s government dealt yet another blow to Acacia Mining yesterday, accusing the firm of failing to declare tens of billions of dollars’ worth of revenues and tax payments.
as a result, acacia Mining, the country’s largest gold miner, saw £160.3m wiped off its value as it fell to the bottom of the FTsE 350.
The latest probe is based on a government audit undertaken earlier this year, which said acacia has undervalued its gold concentrate by as much as ten times. This saw its shares tank.
The new investigation has also recommended the continuation of a ban on the export of gold concentrate, which has cost acacia around £11.7m a month since being introduced in March.
acacia continues to strongly deny the allegations, arguing that, if true, they would make it the third-biggest gold miner in the world, producing more than 3m ounces of gold annually from just two mines.
it comes just weeks after the miner indicated it was making some progress with the government. shares yesterday sank 13pc, or 39.1p, to 261p and are now down 30.2pc for the year.
Fellow gold miner Avocet Mining also had a nightmare, sinking by nearly 10pc after directors said they cannot guarantee the firm will be able to last for more than another year.
in particular, the firm said a £ 21.6m loan issued by Elliott investors affiliate Manchester securities is an ‘unsustainable debt burden’ and will need to be renegotiated as a priority. it added that if the lender was to demand repayment it will be unable to secure another source of finance and would have to begin the insolvency process.
The problems relate to avocet’s inata mine in Burkina Faso, West africa, which has been plagued by disruptions, including a twomonth shutdown at the end of last year. This stemmed from the seizure of a gold shipment by bailiffs representing a group of ex-workers who were claiming unpaid back pay.
avocet has since struggled to make overdue payments to debtors, which has resulted in supply shortages and interruptions to the mine’s production. shares fell 8.8pc, or 4.25p, to 44p.
The FTSE 100 finished the day relatively flat, as a sell-off of technology companies by investors fearing a bubble was balanced out by further weakness in the pound. it was down just 0.2pc, or 15.46 points, at 7511.87.
Oil firms led gains across the board as crude prices rose by nearly 0.8pc. Traders are predicting the bottom of the market for the black stuff after prices fell nearly 4pc last week.
Shell rose 1.6pc, or 33.5p, to 2185.5p, while BP jumped 0.7pc, or 3.1p, to 470.9p. Other risers included Petrofac, which advanced 7.9pc, or 28p, to 381.5p, and Pre
mier Oil, which rose 7.2pc, or 3.5p, to 52.25p.
Phone operator Vodafone advanced 1.5pc, or 3.2p, to 224.25p after its target price was upgraded by two brokers.
Deutsche Bank raised it to 300p from 285p, while Berenberg increased it to 259p from 250p.
Berenberg analysts praised Vodafone for its ‘safe and growing’ 6pc dividend yield and said that the firm’s overall business is more diverse than peers, which better protects itself against market disruptions. in a report on the telecommunication sector, the same analysts were less positive on Vodafone’s rival TalkTalk, cutting it to ‘sell’ from ‘Hold’ over growth concerns.
TalkTalk shares fell 2.6pc, or 4.4p, to 167.4p.