LONDON-listed gold mining company Acacia is in talks with Chinese companies to form a joint venture that would own the Bulyanhulu, Buzwagi and North Mara gold mines in Tanzania.

 Acacia recently put out a statement that, in light of media speculation, it confirmed that it had received a number of expressions of potential interest from Chinese companies. It has commenced a process to explore the value to the company of the sale of a stake in some or all of its Tanzanian operations. According to media reports, the two expressions of interest came from Shandong Gold Mining and Zijin Mining Group.

Acacia Mining Plc is listed in London. The world's biggest gold producer, Barrick Gold Corp of Canada, is its majority shareholder with a 63.9% stake. In recent years Barrick has signed deals with both Shandong and Zijin in other countries, and brought them in as partners in Barrick-owned mines.

Acacia has all its operations in Tanzania and has been caught up in a year-long tax dispute with the government of Tanzania. Its shares have fallen around 70% in the past 12 months due to the tax dispute, as well as an industry wide export ban on minerals not processed in Tanzania.

Last March, the government banned miners from exporting minerals that are not processed inside the country as it aims to increase revenues generated from its natural resources. As a result, Acacia’s gold sales fell nearly 30% last year.

Barrick itself has taken the lead in negotiations with the government. It reached a framework agreement with Tanzania in October and has said that it is aiming for a final deal in the first half of 2018.

The Tanzanian government is looking to attract more investment from China, which is already one of its five top foreign investors, and bringing in a Chinese joint venture partner on the Acacia mines might help in moving the tax dispute negotiations forward.

The Acacia statement said that it continues to support the ongoing negotiations between the Government of Tanzania and Barrick, in seeking to identify a detailed proposal to present to Acacia for review. It added that Acacia remains committed to shareholder value, and evaluates all opportunities against strict strategic and financial criteria, and any transaction will be pursued only if it is determined by Acacia's Board to be in the best interests of all shareholders.

Photo: ACACIA