This is all most fun

Acacia Mining is preparing to close a loss-making mine after a row over exports with the Tanzanian government escalated.

Shares in the FTSE 250 gold miner plunged nearly 40pc last week after a report by the Tanzanian government accused it of under-representing the amount of gold in the concentrate it exports, potentially depriving the country of millions in royalties.

The government said that Acacia’s gold output was 10 times greater than it claimed – a level that would “make it third-biggest gold miner in the world”, the company said.

We all know the general story from the NGO side. These foreign companies rip off the locals, don’t pay tax etc etc. Try to take much too big a profit margin.

The findings, published with great fanfare on national TV, mean an export ban on gold concentrate imposed at the start of March is likely to continue indefinitely. Acacia is still able to ship out gold bars, which make up 70pc of its output, but estimates that it is losing $1m (£780,000) in revenue every day.

Some observers suggest that Tanzania’s president, John Magufuli, is trying to force Acacia to fund a new gold-smelting industry, but experts say the country’s output is too small for this to be economically viable.

Any why do they demand big margins? Because of fuckwittery like this of course. But I’ll guarantee that if you dig into this you’ll find an NGO or two at the bottom of he claims about not m#paying the due royalties

5 comments on “This is all most fun

  1. similar idiocy is behind the Ugandan oil lease court case because the government wants the licence holders (Tullow, I think it is) to build an oil refinery. Anyone building an oil refinery these days needs to build a huge plant with good deepwater jetties and access to traded crude from anywhere in the world and to global markets, not a tiny one on the shores of a lake with no access to the sea. But the government has decided that it wants an oil refinery and that some other bugger’s going to pay for it

  2. Fun indeed, but how is it my – even if I were Tanganyikan – tax money at work? It seems like run-of-the-mill statist kleptocracy with an African flavour.

  3. The more interesting one is the push by Indonesia to drive out a large number of foreign mining organisations. They are being obliged to “disinvest”. That is, sell the mines to the government.

    However what will be interesting in Africa is when the Africans try this on with the Chinese. The Chinese have been just incredibly naive in going into Africa. Sensible people do not invest billions in mining projects that take decades to pay back the investment with most of the costs being upfront. It just encourages the Africans to invite some naive foreigners to discover and develop the mine, then to seize it so they can operate it for a few decades without having to pay off any of those debts.

    It seems the Chinese buy off government officials but there is a limit to that policy.

  4. The HL financial summary suggests the TZ government are taking inspiration from Indonesia’s smelting strategy, which may in turn have been NGO inspired, but there’s no hint of direct NGO meddling.
    Separately, I sniggered at the comment by the Investec chap in this article
    http://www.hl.co.uk/shares/stock-market-news/company–news/acacia-minings-tanzania-dispute-no-laughing-matter,-say-analysts2
    “it sounds like someone in the committee has missed a decimal point somewhere along the line. Alternative explanations don’t bear thinking.”

  5. similar idiocy is behind the Ugandan oil lease court case because the government wants the licence holders (Tullow, I think it is) to build an oil refinery.

    They’re being advised by a bunch of lefty Norwegian do-gooders and…wait for it…Nigerians.

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