Tanzania Continues to Discover More Gold Amid Controversy Surrounding Leading Miner

By  |  July 8, 2019

Gold mining company, Acacia Mining, has reported a 19 percent increase in gold production for the second quarter barely a week after it announced a 13 percent rise in gold reserves for its Gokona Mine in North Mara, Tanzania.

The London-listed company is making major strides in its reserves. In 2018, it announced that it produced more gold than it had anticipated. It attributes the increase in reserves to additional drilling in the east and west extensions of Gokona underground.

The increase in production comes at a time when the company is engaged in long-running battles among its shareholders. The miner and minority shareholders claim that majority shareholder Barrick Gold undervalued the miner in its buyout proposal.

Acacia Mining rejected a takeover bid by its majority shareholder saying the proposed price does not reflect the full value of the mining firm. Barrick claims that there was a 39 percent surge in output from its Gokona Mine in North Mara, Tanzania.

According to Barrick, the takeover of the mine is meant to end the dispute between the mining firm and the Government of Tanzania that has left the company unable to export gold from the country, where it has three mines.

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Legal and General,  UK financial service limited which owns just under 1 percent of Acacia, also rejected the buyout proposal by Barrick to buy out the gold miner saying it raises serious questions about how minority shareholders are treated.

Acacia Mining also operates in Kenya, Burkina Faso, and Mali and it has a secondary listing on the Dar es Salaam Stock Exchange (DSE).

Tanzania is the 4th largest gold producer in Africa after Ghana, South Africa and Mali, its mining sector contributes approximately 4.8 percent of GDP, the Government, however, claims that most of the mining projects have surged.

In January 2019, Tanzanian President, John Pombe Magufuli proposed that the central bank should start buying the country’s gold to prevent smuggling and build reserves to stabilize the currency.

Featured Image Courtesy: Tanzania Gold

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