Acacia Mining’s shares fell for a sixth straight session on Tuesday, a day after the gold miner was hit with a tax bill of more than $190 billion by the Tanzanian government.
Shares in the London-listed miner closed 8.5 percent lower at 169 pence, having had more than two-thirds wiped of their value since a ban on the export of gold and copper concentrates was imposed in Tanzania on March 3.
Acacia, the biggest gold miner in Tanzania, received a notice from Tanzania on Monday for $190 billion unpaid taxes dating back over 10 years.
Acacia said it did not believe it owed the money and reiterated that it had fully declared all revenues.
The Tanzanian revenue authority has not immediately responded to Reuters’ requests to comment.
The London-listed company, majority owned by Canada’s Barrick Gold, is caught up in sweeping changes to Tanzania’s mining industry spearheaded by President John Magufuli who believes the country is not getting its fair share of profits from the sector.
The tax bill is four times the GDP of Tanzania and is 32 times larger than Acacia’s revenue from the two of its mines over the last ten years, according to World Bank data and research from BMO Capital Markets.
“$190 billion is simply an absurdly high number- it will not be paid,” Jefferies analyst Alan Spence said.
“Even if a resolution is found you can’t have same amount of confidence in Tanzania that this won’t happen to another company again.”
Magufuli last week threatened to shut all gold mines in Tanzania if mining companies delayed talks to resolve the dispute over billions of dollars in back taxes the government says they owe.
“These claims are hard to fathom when compared with the total revenue from these mines of $9.4 billion since inception and Tanzania’s GDP of $46 billion,” Barclays said in a note.
The government and Barrick have agreed to start talks about the ban on concentrate exports.
Reporting by Zandi Shabalala in Johahannesburg, Additional reporting by Fumbuka Ng’wanakilala in Dar es Salaam. Editing by Jane Merriman
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