The Globe and Mail reports in its Wednesday edition that a Tanzanian export ban has cast a shadow of doubt over a potential $4-billion (U.S.) merger between a Barrick Gold subsidiary and Endeavour Mining. The Globe's Geoffrey York writes that Barrick has been hunting for a buyer for its African subsidiary, Acacia Mining. The possible Endeavour deal could reduce its majority share of Acacia to a minority holding, but the deal might now be delayed or scuttled by Tanzania's unexpected move March 3 to freeze the export of gold and copper ore.
A merger would create an African mining giant, with mines in five countries.
Acacia's shares immediately plunged by about 18 per cent on the London Stock Exchange, although they recovered somewhat later. The company said it responded to the ban by halting its gold and copper exports from Tanzania, where Acacia's only producing gold mines are located.
Tanzania's new President, John Magufuli, is an anti-corruption campaigner and economic nationalist nicknamed "The Bulldozer" who has repeatedly criticized the foreign-owned mining companies in his East African country.
He has accused the mining companies of "a lot of funny deals" to avoid taxes in Tanzania.
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