Tanzania export ban threatens merger of Barrick subsidiary, Endeavour Mining – by Geoffrey York (Globe and Mail – March 15, 2017)


JOHANNESBURG – A Tanzanian export ban has cast a shadow of doubt over a potential $4-billion (U.S.) merger between a Barrick Gold Corp. subsidiary and Toronto-listed Endeavour Mining Corp.

Toronto-based Barrick has been hunting for a buyer for its African subsidiary, Acacia Mining. The possible Endeavour deal could reduce its majority stake in Acacia to a minority holding, but the deal might now be delayed or scuttled by Tanzania’s unexpected move to freeze the export of gold and copper ore. Acacia and Endeavour had confirmed their “preliminary discussions” in January. A merger would create an African mining giant, with mines in five African countries.

But on March 3, the Tanzanian government announced the export ban. “It is expected that all the companies and individuals who were exporting concentrates and mineral ores to foreign countries for beneficiation (processing, smelting or refining) will immediately stop and start doing such activities within the country,” the announcement said.

It said the ban would provide “more benefits to the nation” by providing “employment opportunities, revenues and technology transfer.”

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.

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