Sept 4 (Reuters) - Gold miner Acacia, which is locked in a dispute with the Tanzanian government, said it will have to reduce operations at its Bulyanhulu mine and cut its mostly Tanzanian workforce as it aims to return to profitability in 2018.
Tanzania’s largest miner, which is majority-owned by Barrick Gold, is in dispute with Tanzania over tax payments and caught up in sweeping changes to the country’s mining industry spearheaded by President John Magufuli, who believes his country is not getting its fair share of profits.
“As a result of the planned reduction in operating activity at Bulyanhulu, Acacia now expects annual production to be in the order of 100,000 ounces lower than the bottom of the previous guidance range of 850,000-900,000 ounces,” Acacia said.
“Regrettably, the implementation of this programme will lead to a significant reduction in the workforce from the current 1,200 employee and 800 contractor roles.”
Tanzania imposed a ban on exports of gold and copper concentrate in March, leading to a build-up of approximately $265 million of concentrate inventory in Tanzania, based on current prices.
In its interim results, Acacia had said it would need to consider cutting operations if the concentrate ban was not lifted by the end of the third quarter.
The ban has led to a negative cash flow of approximately $15 million per month at the mine and made ordinary operations at Bulyanhulu unsustainable, Acacia said. (Reporting by Noor Zainab Hussain in Bengaluru and Barbara Lewis in London; editing by Jason Neely)