Acacia mines the depths as African tensions put the wind up traders
MINING in Africa is not for the fainthearted as gold miner Acacia Mining has discovered.
It was sold off by investors today after announcing that its problems with the Tanzanian government, where it operates, have rapidly escalated.
Acacia has threatened to take the Tanzanian government to the international courts after its staff were accused of money-laundering earlier this week.
Peter Geleta, Acacia’s interim chief executive, also added that he now has concerns about his staff’s safety. Analysts were worried that Acacia’s gold production has fallen 29% over the year to 136,640 ounces. Shares plunged 19.95p, or 12.6%, to 138.4p.
Tanzania’s president, John Magufuli, has sent shockwaves through the mining industry since his election in 2015 as he attempts to distribute revenue to the Tanzanian people.
In April, Acacia was banned from exporting gold and copper concentrates because the government claimed it was owed huge amounts of undeclared royalties on production from the Bulyanhulu and Buzwagi mines.
It was also proving a tricky session for the FTSE 100, which fell 4.80 points to 7021.77 as fears over tightening monetary policy and China/US trade tensions dominated the session, prompting investors to pile into defensive stocks s u c h a s u t i l i t i e s . Un i te d Ut i l i t i e s climbed 8.6p to 717.6p, Centrica was 1.5p higher at 148.7p and National Grid gave a rise of 8.2p to 827.4p.
Utility firms are renowned for paying out solid dividends which makes them attractive in the present climate.
But Ashtead Group was bottom of the index after French conglomerate Bouygues lowered its full operating profit forecast citing problems at its construction business.
The warning had a knock-on effect for Ashtead which, as well as providing power to the Super Bowl rents equipment to the construction sector. Ashtead shares were down 101.5p to 1835p.
Amid the risers was Halma after it announced it had bought fire-safety company Limotec bvba for €9.3 million (£8.2 million). Shares rose 4p to 1298p.
Further down the market, Essentra was down after it said the businesses it is looking to exit will post an operating loss of £1 million for the first nine months of this year. The businesses include its commercial print and consumer packaging site in Largo, Florida.