Australia-listed Strandline Resources (ASX: STA) has submitted the mining license application for the Fungoni Project to the Ministry of Energy and Minerals of Tanzania.

The Fungoni Project, located 25km south of Dar es Salaam port, is expected to produce saleable titanium and zircon mineral sands.

Adjudication of the mining license at Fungoni application will be undertaken by the Ministry of Energy and Minerals and the newly-appointed Commission under the President‘s office.

Strandline Managing Director Luke Graham commented: “This project will deliver a host of economic and social benefits for Tanzania. It will also pave the way for the development of Strandline’s other mineral sands projects in Tanzania.”

The principal activity of the company is mineral exploration and evaluation in Tanzania and Australia, with a focus on mineral sands, operating a series of low-cost expandable mining assets.

In Tanzania, in addition to Fungoni, the company’s most advanced project, Strandline holds 100% owned land tenement package stretching 350km along the prospective Tanzanian coastline and is aggressively exploring for high unit value HMS deposits.

Strandline explains that, although the Tanzanian Government had passed three bills of legislation in July 2017 rebalancing control of the natural mineral products between industry and the State, many of the amendments have no significant impact on the viability and operational plan of the Fungoni Project.

Barrick Gold Corporation (NYSE:ABX)(TSX:ABX), the main shareholder (63.9%) of Acacia Mining (LSE:ACA) (DSE:ACA) – Tanzania’s largest gold mining company – has reached an agreement with the Tanzanian government in relation to the ongoing tax dispute.

A framework outlining the necessary steps for achieving this outcome was signed on 19th October 2017 in Dar es Salaam following a meeting between Barrick Executive Chairman John L. Thornton and the President of the United Republic of Tanzania, His Excellency Dr. John P. Magufuli.

According to the deal, Acacia will make a payment of USD 300 million to the Government of Tanzania to assist in resolving the outstanding tax claims of USD 190 billion for Acacia allegedly under-reported amounts of gold exports.

Overall, the Government’s share of economic benefits would be delivered in the form of royalties, taxes, and a 16% free carry interest in the Tanzanian operations.

In addition, a new Tanzanian operating company will be created to manage Bulyanhulu, Buzwagi and North Mara mines, and all Acacia’s future operations in the country.

The Government of Tanzania will participate in decisions related to operations, investment, planning, procurement, and marketing.

The new company will also maximize employment of Tanzanians, build local capacity at all levels of the business, and will increase procurement of goods and services within Tanzania, Barrick explains in its press release.

Barrick and the Government are also reviewing conditions for the lifting of Tanzania’s concentrate export ban.

However, Acacia reminds investors in its latest press release on 20th October 2017 that it continues to seek further clarification as yet no formal proposal has been put to Acacia for consideration.

Any proposal agreed in principle between Barrick and the Government will require Acacia’s approval, and Acacia will consider any agreement once it receives the full details.

Barrick Gold (NYSE:ABX) (TSX:ABX), the largest gold mining company in the world, commented on the potential impact of the ongoing ban on mineral concentrate exports affecting the operations of its Tanzanian subsidiary Acacia Mining (LSE:ACA).

Barrick holds a 63.9% equity interest in Acacia, although the company is operated independently, Barrick indicates.

Financial results from Acacia are consolidated for accounting purposes. Cost and production information from Acacia is presented on an attributable basis in Barrick’s quarterly and annual mine statistics and annual guidance.

Barrick’s current 2017 guidance assumes a contribution of 545,000-575,000 ounces of gold (63.9% basis) from Acacia, at a cost of sales of USD 860-USD 910 per ounce, and all-in sustaining costs of USD 880-USD 920 per ounce.

Acacia operations at the Bulyanhulu and Buzwagi gold mines are being impacted by the current ban on concentrate exports from Tanzania, Barrick reminds.

Acacia’s impacted operations account for approximately 6% of Barrick’s 2017 gold production guidance, and in total for approximately 10% of Barrick’s 2017 gold production guidance.

“Barrick is offering Acacia its full support as Acacia works to resolve this matter with the government of Tanzania. Barrick will evaluate any necessary adjustments to its full-year outlook should Acacia determine a revision to its own 2017 guidance is required”, Barrick’s press release reads.

Tanzania Mineral Concentrates Exports Ban & Investigation

Tanzania issued a ban on the export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel and silver, with effect from 2nd March 2017, and established two special committees to examine the extent, types and values of minerals contained in mineral sand in containers for export in various locations in the country.

The ban heavily affected Acacia Mining, who reported a reduction in sales of almost 35,000 ounces lower than production in its results for Q1 2017, because of the ban, the company explains.

The results of the investigation of the first committee were released on 24th May 2017. They identify major discrepancies in the average concentration of these minerals, per ton of mineral sand, resulting in losses of revenue from royalties.

On the same day, President Magufuli revoked the appointment of the Minister of Energy and Mines Prof. Sospeter Muhongo, and dissolved the board of directors of the Tanzania Minerals Audit Agency (TMAA), the government’s body responsible for monitoring and auditing of mining operations, and suspended its Chief Executive Officer.

However, Acacia discredited the committee’s findings, as these imply that Bulyanhulu and Buzwagi mines each produce more than 1.5 million ounces of gold per year.

This would mean they are the two largest gold producers in the world; that Acacia is the world’s third largest gold producer; and that Acacia produces more gold from just three mines than companies like AngloGold Ashanti produce from 19 mines, Goldcorp from 11 mines, and Kinross from their 9 mines, Acacia explained.

Acacia will make further detailed observations once it receives the committee’s full report.

Tanzanian largest gold miner Acacia Mining (LSE:ACA; DSE:ACA) issued a market updated and hosted a conference call on 2nd June 2017 to explain the company’s current situation in Tanzania, following the ban on the export of mineral concentrates and ores for metallic minerals introduced in March this year by the Tanzanian government.

CEO Brad Gordon explained that the company’s mines in Tanzania continue to operate as normal, producing and selling gold doré whilst stockpiling gold/copper concentrate.

As of 31st May 2017, the company has approximately 85,000 ounces of gold, 4 million pounds of copper and 50,000 ounces of silver contained within unsold concentrate, which amounts now to 1,100 containers held in the country.

“In light of the increased levels of uncertainty we have seen some impact on productivity levels but at this stage, we are not making any changes to full-year guidance and continue to take steps to minimize further cash outflows from the business”, the market update reads.

The ban was introduced to ensure that mineral value addition activities are carried out in the country, after which the President of Tanzania Dr. John Magufuli established two special committees to examine the extent, types, and values of minerals contained in mineral sand in containers for export.

The findings of the first committee’s investigation were announced on 24 May 2017, identifying major discrepancies in the average concentration of these minerals, per ton of mineral sand, resulting in losses of revenue from royalties.

On the same day, President Magufuli revoked the appointment of the Minister of Energy and Mines Prof. Sospeter Muhongo, with immediate effect, dissolved the board of directors of the Tanzania Minerals Audit Agency (TMAA) and suspended its Chief Executive Officer.

However, Acacia made a number of observations that dispute and discredit the committee’s findings.

“We don’t know how they got their results. We haven’t seen the report, we have requested it and asked for an independent review, as we dispute the finding […] You don’t need to be too expert to understand that those findings are not correct”, Gordon explained during the conference call.

Details of the company’s observations on the findings are available here: www.tanzaniainvest.com/mining/acacia-discredit-committee-findings-export-gold-copper-concentrates.

Meanwhile, Acacia is co-operating with the second committee, which was set up to examine economic and legal issues associated with historic exports of gold/copper concentrates.

“We have provided extensive information to the second committee and have provided access to each of our mine sites. We believe that the committee is close to completing its work, following which we would welcome the opportunity to discuss the findings directly with senior government officials and remain hopeful that we will be able to reach a resolution to the current ban on exports, but we continue to consider all options”, Gordon explained.

He also stressed that Acacia will continue production as it is for some time, although it is losing USD 15 million per month in revenues as a consequence of the ban, and will not be changing its full-year guidance.

He also commented on the government’s intentions to establish smelting capacity in the country: “To make it viable, as per 2011 report of TMAA, it needs 150,000/200,000 tons of mineral concentrate per year. We produce 50,000/60,000 tons per year. However, we are prepared to work with the government to ascertain whether smelting is viable in the country with current technologies.”

Mining companies in Tanzania are also expected to list 30% of their share capital at the Dar es Salaam stock exchange (DSE), by August this year.

To this regard, Andrew Wray, Chief Financial Officer of Acacia Mining, explained that the company has engaged with the ministry to discuss alternatives to reach their objective without “trying to create liquidity in the market where it does not exist”, referring to the recent IPO of mobile operator Vodacom at DSE – the largest IPO in Tanzania to date – which has been extended to allow investors more time to participate.

“The regulation points out that the license mining holder has to list; this would make interesting if Buzwagi and Bulyanhulu mines are listed separately, so it would make more sense to make something at the group level which is part of what si being discussed with the Ministry”, Wray explained.

Acacia Mining already listed at DSE in 2011, to promote broader liquidity and ownership of its shares in Tanzania as part of the company’s longer term commitment to the country.

The Government of Tanzania will impose a clearing fee of 1% of the value of minerals export.

Prime Minister Hon. Dr. Philip Mpango made the announcement when presenting to the National Assembly the estimates of Tanzania’s government revenue and expenditure for 2017/18.

“The Government will not allow direct exportation of minerals from the mines to other countries and instead it will establish clearing houses at the international airports, mining areas and other appropriate areas where the minerals will be verified and issued export permit before being exported. The Government will impose a clearing fee of one percent of the value of minerals”, Mpango explained.

The announcement follows the introduction in March 2017 of a ban on the export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel, and silver.

According to the Ministry of Energy and Minerals of Tanzania, the ban intends to make sure that mineral value addition activities are carried out within Tanzania.

A subsequent committee was established to investigate the extent and type of minerals contained in mineral sand in containers in various locations in the country.

The outcome of the investigation was released on 24th May 2017, identifying major discrepancies in the average concentration of the minerals, per ton of mineral sand, resulting in losses of revenue from royalties.

However, Tanzanian largest gold miner Acacia Mining discredited the committee’s findings and is asking for an independent review.

Meanwhile, the Tanzania Chamber of Minerals and Energy (TCME) commented that under the current situation some mines faces imminent closure because of the loss of revenues from the sale of concentrates, and demanded the uplift of the ban.

The President of Tanzania Dr. John Magufuli requested the relevant authorities and the Parliament to review and amend the laws pertaining to the mining, and the oil & gas industries.

The order follows the presentation on 12th June 2017, of the second report on mineral concentrates exports, which claimed tax evasion and major irregularities by the gold mining companies operating in Tanzania.

In particular, the report claims that between 1998 and March 2017, between 44,000 and 61,000 containers of mineral concentrates worth between USD 49.12 billion and USD 83.32 billion were exported, without the country earning anything in royalties and taxes.

The second report also alleges that Acacia Mining (LSE:ACA, DSE:ACA), Tanzania’s largest gold producer, has under-declared revenues and tax payments over a number of years.

This is why the report recommends the payment of outstanding taxes and royalties, renegotiating large-scale Mineral Development Agreements and the Government’s ownership in the mines, and maintaining the current ban on mineral exports that was introduced in March 2017.

President Magufuli also ordered the investigation of all former and current government officials who were involved in the signing of mining agreements.

President Magufuli already revoked the appointment of the Minister of Energy and Mines Prof. Sospeter Muhongo, and suspended the Chief Executive Officer of the Tanzania Minerals Audit Agency (TMAA), following the presentation of the first report on the contents of gold, copper and other minerals in the mineral sand in containers for export, that claimed major discrepancies in the actual amounts of minerals.

However, Acacia Mining strongly refutes these accusations included in the second and in the first report.

“We have always conducted our business to the highest standards and operated in full compliance with Tanzanian law. We reiterate that we have declared everything of commercial value that we have produced since we started operating in Tanzania and have paid all appropriate royalties and taxes on all of the payable minerals that we produce. In addition, our published accounts are annually audited to an international standard in accordance with IFRS”, the company explains in his latest announcement.

In addition, Acacia Mining discredits the first report, which claims that Acacia has under-declared its exports, and calls for an independent investigation and a lifting of the export ban until this work is completed.

“Acacia completely refutes this and does not understand how the Committee could have come to these findings. On the 12th June 2017, the Second Committee reported its findings, which are based on the erroneous figures within the First Committee report. Acacia believes that the Company and more importantly Tanzania would be served best through an independent investigation and a lifting of the export ban until this work is completed.”

TANZANIA MINING
Mining and quarrying activities in Tanzania contributed 3.7% to its GDP with USD 1.78bn in 2014, compared to only USD 598m in 2009.

Minerals export accounted for USD 1.37bn of the total value of Tanzania’s export in 2015 (i.e. 24%) with gold representing more than 90% of the country’s minerals export.

According to Tanzania’s Development Vision 2025 plan, the mining sector is expected to account for 10% of the GDP by that year.

However, the Tanzania Chamber of Minerals and Energy (TCME) believes that under the current situation some mines faces imminent closure because LINK of the loss of revenues from the sale of concentrates.

The ban on mineral exports already heavily affected Acacia Mining who reported a reduction in sales of almost 35,000 ounces lower than production in its results for Q1 2017.

Gold mining company Shanta Gold (AIM: SHG) and junior exploration company Helio Resource (TSXV: HRC) have entered into a definitive agreement on 19th June 2017 pursuant to which the former will acquire all of the issued and outstanding common shares of the latter.

Canadian based Helio Resource owns 100% of the Saza-Makongolosi Project (SMP) gold project that covers an area of 238km2 in the Lupa Goldfield in Southwest Tanzania, adjacent to the New Luika Gold Mine (NLGM) operated by Shanta Gold.

Helio’s resource consists of an NI 43-101 compliant gold resource of 635k gold oz at an average grade of 2.4g/t.

All of these resources are located within 20km of the Shanta’s existing NLGM processing plant.

The acquisition will result in an increase in Shanta’s gold resource ounces of 77% from 824koz at 1.9g/t to 1,459koz at 2.09g/t.

Dr. Toby Bradbury, CEO of Shanta commented: “The inclusion of the Helio resources into Shanta’s portfolio strengthens the opportunity to deliver an expansion option for the New Luika Gold Mine and to also potentially extend mine life. This comes after our recent announcement of the Nkuluwisi resource of 4 million tons for 141k oz at 1.1g/t. New Luika is well established with long-term water security and low cost and long life power servicing an established and efficient processing plant.”

Richard Williams, CEO of Helio commented: “After many years of exploration efforts and a number of economic assessment studies it is clear that the best outcome for Helio shareholders is to combine with Shanta for the development of Helio’s gold resources on its SMP property in Tanzania. This all share transaction represents a unique opportunity for Helio shareholders to participate in the future growth and value creation of the New Luika Gold Mine.”

Tanzania Gold

Tanzania gold reserves are estimated at about 45m ounces (oz). Gold exploration has been centred mostly on the greenstone belts around Lake Victoria, where several large deposits have already been discovered and are being developed.

In April 2017, Shanta announced its production and operational results for Q1 2017 for NLGM, showing an increase of in the gold production of +8% compared to Q4 2016.

The Parliament of Tanzania has published on 29th June 2017 the proposed draft legislation to change the legal framework governing the natural resources sector in Tanzania.

The draft bill is to be debated by the Parliament in an extended Parliamentary session.

OreCorp (ASX: ORR), a Western Australian based mineral company with gold and base metal projects in Tanzania commented on the draft legislation with concerns: “Based on the Company’s preliminary review of the draft legislation, the Company believes that, if passed by the Tanzanian Parliament without any substantial amendments, the proposed changes may potentially have an adverse effect on the Nyanzaga Project.”

The Nyanzaga Gold Project is a joint venture with Acacia Mining (LSE: ACA), Tanzania’s largest gold miner.

“Acacia will review the proposed changes in the context of our existing agreements and will provide further updates as appropriate,” the company commented on its website.

Shanta Gold (AIM: SHG), another gold mining company with interests in Tanzania with its flagship New Luika Gold Mine commented: “Shanta will seek advice on the proposed changes and will provide further updates as appropriate.”

Meanwhile, both Cradle Resources (ASX: CXX) that owns 50% of the niobium Panda Hill deposit in Tanzania and Graphex Mining (ASX: GPX) that coarse flake Chilalo Graphite Project in south-east Tanzania have been granted a trading halt by the Australian Securities Exchange, pending details of draft changes to mining legislation proposed by the Tanzanian government.

In addition to the new draft mining legislation, the Parliament of Tanzania has also approved the new Finance Act, which will impose a 1% clearing fee on the value of all minerals exported from the country from 1 July 2017.

Mining has placed Tanzania in the higher ranks of African economies in terms of attracting FDIs.

The mining sector share of the country’s GDP at current prices was 3.4% in the financial year 2014/15.

However, Tanzania’s National Five Year Development Plan 2016/17 – 2020/21, stresses that most of the mineral resources are being exported in their raw form without being processed, denying the country jobs and value addition activities.

Just a few days after having introduced its draft new mining laws, the parliament of Tanzania has passed the three bills on 3rd July 2017, allowing for the government to renegotiate mining contracts.

The parliament has passed The Natural Wealth and Resources Contracts (Review and Re-Negotiation of Unconscionable Terms)] Bill, 2017, The Natural Wealth and Resources (Permanent Sovereignty)] Bill, 2017 and The Written Laws (Miscellaneous Amendments)] Bill, 2017.

The new laws follow the introduction in March 2017 of a ban on the export of mineral concentrates and ores for metallic minerals such as gold, copper, nickel, and silver.

This has particularly affected Acacia Mining (LSE: ACA), Tanzania’s largest gold miner, wich has been accused by the Government of playing down the amounts of declared exported minerals until the introduction of the ban.

Acacia has strongly refuted the accusation, reiterating that “the exporting of the concentrate takes place in full compliance with Tanzanian law and the legal agreements that we have with the Tanzanian Government.”

Today, Acacia announced that Notices of Arbitration were served in Tanzania on behalf of Bulyanhulu Gold Mine Limited (“BGML”), the owner of the Bulyanhulu mine, and Pangea Minerals Limited (“PML”), the owner of the Buzwagi mine.

“This is in accordance with the dispute resolution processes agreed by the Government of Tanzania in their Mineral Development Agreements with BGML and PML,” Acacia explains.

The company adds that “The serving of the Notices is necessary to protect the Company, but, this notwithstanding, Acacia remains of the view that a negotiated resolution is the preferable outcome to the current disputes and the Company will continue to work to achieve this.”

Australia-listed Strandline Resources (ASX: STA) has submitted the mining license application for the Fungoni Project to the Ministry of Energy and Minerals of Tanzania.

The Fungoni Project, located 25km south of Dar es Salaam port, is expected to produce saleable titanium and zircon mineral sands.

Adjudication of the mining license at Fungoni application will be undertaken by the Ministry of Energy and Minerals and the newly-appointed Commission under the President‘s office.

Strandline Managing Director Luke Graham commented: “This project will deliver a host of economic and social benefits for Tanzania. It will also pave the way for the development of Strandline’s other mineral sands projects in Tanzania.”

The principal activity of the company is mineral exploration and evaluation in Tanzania and Australia, with a focus on mineral sands, operating a series of low-cost expandable mining assets.

In Tanzania, in addition to Fungoni, the company’s most advanced project, Strandline holds 100% owned land tenement package stretching 350km along the prospective Tanzanian coastline and is aggressively exploring for high unit value HMS deposits.

Strandline explains that, although the Tanzanian Government had passed three bills of legislation in July 2017 rebalancing control of the natural mineral products between industry and the State, many of the amendments have no significant impact on the viability and operational plan of the Fungoni Project.

Barrick Gold Corporation (NYSE:ABX)(TSX:ABX), the main shareholder (63.9%) of Acacia Mining (LSE:ACA) (DSE:ACA) – Tanzania’s largest gold mining company – has reached an agreement with the Tanzanian government in relation to the ongoing tax dispute.

A framework outlining the necessary steps for achieving this outcome was signed on 19th October 2017 in Dar es Salaam following a meeting between Barrick Executive Chairman John L. Thornton and the President of the United Republic of Tanzania, His Excellency Dr. John P. Magufuli.

According to the deal, Acacia will make a payment of USD 300 million to the Government of Tanzania to assist in resolving the outstanding tax claims of USD 190 billion for Acacia allegedly under-reported amounts of gold exports.

Overall, the Government’s share of economic benefits would be delivered in the form of royalties, taxes, and a 16% free carry interest in the Tanzanian operations.

In addition, a new Tanzanian operating company will be created to manage Bulyanhulu, Buzwagi and North Mara mines, and all Acacia’s future operations in the country.

The Government of Tanzania will participate in decisions related to operations, investment, planning, procurement, and marketing.

The new company will also maximize employment of Tanzanians, build local capacity at all levels of the business, and will increase procurement of goods and services within Tanzania, Barrick explains in its press release.

Barrick and the Government are also reviewing conditions for the lifting of Tanzania’s concentrate export ban.

However, Acacia reminds investors in its latest press release on 20th October 2017 that it continues to seek further clarification as yet no formal proposal has been put to Acacia for consideration.

Any proposal agreed in principle between Barrick and the Government will require Acacia’s approval, and Acacia will consider any agreement once it receives the full details.

Tanzanian gold producer Acacia Mining (LSE: ACA) released its Fourth Quarter Production Report for the three months ended 31 December 2017, showing a gold production 30% lower than Q4 2016.

The company indicates that gold production reached 148,477 ounces, as a direct result of Bulyanhulu transitioning to reduced operations.

On 4th September 2017, the company announced the decision to reduce operational activity at Bulyanhulu, driven by unsustainable cash outflows at the mine due to the mineral concentrate export ban introduced by the government of Tanzania in March 2017, and the operating environment.

In addition, full-year sales of gold reached 592,861 ounces, -27% lower than 2016, also driven by the impact of the export ban.

Bulyanhulu is one of the three gold mines Acacia operates in Tanzania, together with Buzwagi and North Mara. The combined revenues of Bulyanhulu and Buzwagi represent 30% of the group’s revenues.

Acacia is currently on a raw with the Tanzanian government after a committee found that the company allegedly under-declared its exports.

The gold producer refutes the accusation and is in talks with the Government of Tanzania for a resolution.

Petra Diamond, Tanzania’s only significant diamond producer, has published it Trading Update for the Six Months ended 31 December 2017, showing revenues down 1% to USD 225.2 million (H1 FY 2017: US$228.5 million).

The company explains that this is mainly due to Williamson’s diamond mine in northwest Tanzania first parcel (71,654.45 carats) not being sold during the period, at it remains blocked for export by the Government of Tanzania (GoT).

In September 2017, the findings of an investigation into the Tanzanian diamond sector by a parliamentary committee implied a potential under-valuation of diamond parcels prior to export, impacting on the royalty payments to the GoT.

As a result, the parcel of diamonds from the Williamson mine had been blocked from export.

The Williamson mine is 75% by Petra and 25% by GoT.

Petra indicates that it continues to engage with the GoT in order to find a resolution to release the blocked parcel.

Tanzania Diamonds
Africa produces 50% of the world’s diamonds by volume and 58% by value.

In 2015, Tanzania was the 10th largest diamond producer in Africa after Botswana (17.3m ca), Angola (7.1m ca), South Africa (6m ca), the Democratic Republic of Congo (3.15m ca), Namibia (1.92m ca), Sierra Leone (0.5m ca), Zimbabwe (0.5m ca), Lesotho (0.35m ca) and Ghana (0.24m ca).

Tanzanian largest gold producer Acacia Mining (LSE: ACA) released its 2017 Preliminary Results showing net losses of USD 707.394 million as opposed to net earnings of USD 94.944 million in 2016.

During the same period revenues dropped by -29% reaching USD 751.515 million versus USD 1,053.532 million in 2016.

Peter Geleta, Interim CEO of Acacia explained that the company was impacted by events beyond its control, referring to the ongoing ban on the export of gold/copper concentrate that resulted in the company being unable to export and sell 185,800 ounces of produced gold which led to a substantial cash outflow.

Unsold concentrate also includes 12.1 million pounds of copper and 158,900 ounces of silver, currently stockpiled in Tanzania.

In March 2017, the Tanzanian Ministry of Energy and Minerals announced a ban on the export of metallic mineral concentrates.

During Q2 2017, two Presidential Committees announced findings post investigations into mineral content and historic exports of gold/copper concentrates, accusing Acacia of undermining its values.

The company made a number of observations that discredit the findings and refuted the accusations.

In July 2017, Acacia received adjusted tax assessments totaling USD 190 billion for alleged unpaid taxes and penalties, and in the same month commenced international arbitration.

In October 2017, Barrick Gold, Acacia’s largest stakeholder, announced that it has agreed on a framework for the resolution of the disputes with the Government of Tanzania.

However, no detailed proposal has yet been presented and Barrick suggests a final proposal in H1 2018. Any settlement will need Acacia’s approval.

Acacia Mining (LSE: ACA), the largest gold producer in Tanzania, issued an announcement confirming that 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.

Acacia is indeed engaging with a small number of potential investors, but the process remains at a very early stage and there can be no certainty that an agreement will be reached, the company stresses.

Acacia recently released its 2017 Preliminary Results showing net losses of USD 707.394 million as opposed to net earnings of USD 94.944 million in 2016.

During the same period revenues dropped by -29% reaching USD 751.515 million versus USD 1,053.532 million in 2016.

The company was impacted by Tanzania’s ongoing ban on the export of gold/copper concentrate introduced in March 2017.

In addition, two Presidential Committees that investigated into mineral content and historic exports of gold/copper concentrate, accuse Acacia of undermining its values.

The company made a number of observations that discredit the findings and has always refuted the accusations and is in ongoing negotiations with the Government of Tanzania and Barrick Gold Corporation, Acacia’s majority shareholder, in seeking a resolution.

The latest Fraser Institute Annual Survey of Mining Companies indicates that Tanzania dropped in the overall Investment Attractiveness Index ranking.

The survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment.

Tanzania’s score and rank deteriorated in 2017, dropping from 59th (of 104) in 2016 to 78th (of 91).

The survey was sent to approximately 2,700 exploration, development, and other mining-related companies around the world. Those that participated reported exploration spending of USD 2.3 billion in 2017 and USD 1.9 billion in 2016.

This year miners expressed increased concern over uncertainty regarding the administration, interpretation, or enforcement of existing regulations (+55 points), trade barriers (+50 points), and security (+47 points).

Out of 15 African countries surveyed, Tanzania ranks 12th, after Ghana, Mali, Botswana, South Africa, DRC, Namibia, Zambia, Morocco, Zimbabwe, Burkina Faso, and Ivory Coast, and just before Ethiopia, Mozambique, and Kenya,

In particular, four African countries —Democratic Republic of Congo (DRC), Ivory Coast, Tanzania, and Zambia— experienced declines in their Policy Perception Index (PPI) scores of over 20 points.

In the survey, the Manager of a mining company comments that “Legislative changes in Tanzania, which are being retrospectively applied, undermine the sanctity of contracts and remove recourse for international arbitration to resolve disputes with the government. This creates uncertainty and instability and makes for a particularly hostile investment environment.”

Meanwhile, the Senior management of an exploration company, stresses that taxation is excessive and random.

In the 1990s, Tanzania’s mining laws were relaxed to encourage foreign investments, resulting in international mining companies opening up large-scale mining operations.

However, in 2017 the government passed a series of bills aimed at increasing revenue from minerals explorations and export, including higher taxes on mineral exports and allowing the government to have a higher stake in some mining operations.

Acacia Mining (LSE: ACA), the largest gold producer in Tanzania, announced that gold production for Q1 2018 was in line with expectations at 120,981 ounces, a 55% decrease on Q1 2017 (219,620 ounces).

The Company operates three mines in northwest Tanzania—Bulyanhulu, Buzwagi, and North Mara.

Gold ounces sold for Q1 2018 of 116,955 ounces were slightly below gold produced for the quarter as a result of the timing of shipments.

The decline in production was primarily driven by the move to reduced operations at Bulyanhulu mine and to stockpile processing at Buzwagi mine.

On September 2017, the company announced the decision to reduce operational activity, driven by unsustainable cash outflows at the mines due to the mineral concentrate export ban introduced by the government of Tanzania in March 2017.

At North Mara, gold production of 76,769 ounces for Q1 2018 was, as expected, 20% lower than Q1 2017’s strong, grade-driven performance of 96,468 ounces.

At Buzwagi, gold production of 35,685 ounces for Q1 2018 was 41% lower than in Q1 2017 (59,856 ounces).

At Bulyanhulu, gold production for Q1 2018 amounted to 8,527 ounces, 87% below Q1 2017 (63,346 ounces).

Peter Geleta, Interim Chief Executive Officer, commented: “All three of our operations delivered in line with their respective mine plans and we were pleased to record an increase in our cash balance to USD 107 million, driven by the sale of a non-core royalty that completed in January 2018, which helped to further stabilise our balance sheet.”

Acacia is currently on a raw with the Tanzanian government after a presidential committee found that the company allegedly under-declared its exports.

The gold producer refutes the accusation and is in talks with the Government of Tanzania for a resolution.

Australian mineral exploration and development company Strandline Resources (ASX: STA) has announced that it has secured a binding offtake agreement for 100% of the ilmenite which will be produced at its Fungoni mineral sands project in Tanzania.

The Agreement is with China’s Maoming Ubridge Group Mineral Industry Company (Maoming), part of Maoming Ubridge Group Co., with interests in mining, agriculture, trade, and business.

The zircon-rich Fungoni Project, located 25km south of Dar es Salaam port infrastructure, is the Company’s most advanced Tanzanian based development.

The binding sales contract signed with Maoming covers 100% of the ilmenite to be produced at Fungoni for the Life of Mine, which is expected to generate 28% of forecast revenue from Fungoni.

Strandline Managing Director Luke Graham commented: “The Agreement provides a strong endorsement of the Fungoni project and the high quality of the chloride ilmenite which will be produced over the life of the mine. With the environment certificate already received for the project, Strandline is now awaiting approval of its Mining Licence from the Tanzanian Mining Commission, at which time project funding can be finalized.”

With the previously announced zircon-monazite sales agreement with Hainan Wensheng High-Tech Materials of China, Strandline Resources now has 90% of Fungoni’s forecast revenue secured via
binding offtake contracts with Chinese companies.

Africa-focused mining company Armadale Capital Plc (LON: ACP ) has published its final results for the year ended 31 December 2017, stressing rapid advancement of the high-grade Mahenge Liandu Graphite Project in south-east Tanzania, ahead of an anticipated decision to mine in early 2019.

Nick Johansen, Director of Armadale said: “2017 saw Armadale accelerate work at Mahenge Liandu as we approach our target of making a decision to mine early next year. Exploration and definition drill programmes, metallurgical test work, feasibility studies, permitting activities and commercial marketing are all being conducted concurrently to ensure we meet this ambitious target and start delivering returns for our shareholders.”

“[Thanks to] the exceptional quality, with concentrate purity of up to 99.1% Total Graphitic Carbon (TGC) produced using low-cost processing methods, and desirable flake size distribution and graphite expandability attributed to the material from Mahenge Liandu, we are enthusiastic about beginning the formal marketing process of our product within markets including the high growth battery industry,” Johansen explained.

” It is with this in mind, together with a project which has consistently demonstrated its considerable economic and strategic value, that I look forward to providing investors with additional news over the coming months as we gear up to making a formal decision to mine in Q1 2019,” Johansen concluded.

Tanzania Graphite
Tanzania’s largest graphite deposits are located in the central and east southern regions of the country.

At the end of 2015, The Tanzanian Ministry of Energy and Minerals (MEM) announced that Tanzania will soon become one of the largest producers of graphite in the world, due to recent and abundant discoveries of graphite fields across the country.

Barrick Gold Corporation (NYSE:ABX)(TSX:ABX), the main shareholder (63.9%) of Acacia Mining (LSE:ACA) (DSE:ACA) – Tanzania’s largest gold mining company – has just published an update on ongoing discussions with the Government of Tanzania (GoT) concerning the proposed framework for Acacia Mining’s operations in Tanzania.

In its statement, the corporation indicates that progress has been made on the drafting of definitive agreements necessary for the implementation of the proposed framework.

However, in order to allow the process to continue in an orderly manner and without an arbitrary deadline, Barrick is not providing a timetable for the completion of the discussions at this time.

Meanwhile, Acacia noted in its own update related to this matter that it has been supporting Barrick in its discussions with GoT, but has not been directly involved in those discussions to date and stressed that any proposal that might be agreed in principle between Barrick and GoT will be subject to review by the Independent Committee of the Acacia Board of Directors.

Acacia is currently on a raw with the Tanzanian government after a presidential committee found in May 2017 that the company allegedly under-declared its exports and eventually presented it with a demand for USD 190 billion in unpaid taxes.

The gold producer has always refuted the accusation and has been since in talks with GoT for a resolution.

In October 2017, Barrick Gold announced has reached an agreement with GoT in relation to the ongoing tax dispute.

According to the deal, Acacia will make a payment of USD 300 million to GoT and the Government’s share of economic benefits would be delivered in the form of royalties, taxes, and a 16% free carry interest in the Tanzanian operations.

However, to date, the proposed deal has not been approved by Acacia.

Meanwhile, the company declared a reduction of gold production for Q1 2018 of -55% compared to Q1 2017 and commenced a process to explore the value to the company of the sale of a stake in some or all of its Tanzanian operations.