By Barbara Lewis and Yadarisa Shabong
LONDON (Reuters) - Acacia Mining said on Wednesday it was seeking a stay of international arbitration proceedings against Tanzania, a step that could ease tensions between the two sides locked in a dispute following a $190 billion tax bill.
Adding to pressure on Acacia, the company said late on Tuesday it had been notified of an imminent ban on the use of a storage dam that would prevent its North Mara gold mine - its main source of revenue - from operating.
The offer to postpone arbitration, which was scheduled to start on Monday, precedes a looming July 19 deadline for Acacia's majority owner Barrick Gold Corp, holder of a 63.9% stake, to make a firm bid to buy out Acacia.
Acacia and other shareholders have been opposing the offer, saying it is too cheap.
International arbitration is generally a last resort for mining companies in disputes with governments.
But some of Acacia's shareholders have said it has a good chance of winning, which would increase the value of the company and could be preferable to accepting too low an offer from Barrick.
Barrick declined to comment on Wednesday.
It has been leading negotiations with Tanzania over a $190 billion tax bill - about four times the country's gross domestic product. The bill was handed to Acacia in 2017 for allegedly under-reporting output. Acacia denies the allegation.
"If the Tanzanian government agrees to the stay, Acacia would expect the arbitration hearing to be postponed to provide time for the government of Tanzania to complete its settlement discussions with Barrick Gold Corp," Acacia said in a statement.
ENVIRONMENTAL RULES
Tanzanian allegations that Acacia has broken environmental regulations have ratcheted up the pressure on Acacia.
Late on Tuesday, Acacia said the Tanzanian National Environment Management Council issued a notice for Acacia's North Mara mine to prevent it using its tailings storage facility by 6 a.m. local time on Saturday on the grounds the mine had breached environment rules.
In a statement, Acacia said it would request any investigation reports or data upon which the North Mara notice is based.
Acacia's North Mara mine was issued with an Environmental Protection Order and fine in May 2019 for alleged deficiencies at a tailings storage facility.
But Acacia says it has never received any reports that would justify the ban on use. It said the North Mara technical team has been working "constructively and collaboratively" with the Tanzanian government.
Analysts at Berenberg, which rates Acacia "hold", said the postponement request should be received positively by Tanzania.
But it said the risk for Acacia is a prolonged outage at North Mara, which would have a "very significant" impact on finances given the mine makes up 70% of group revenue, and cannot operate without a tailings dam.
Acacia's share price was 0.5% lower at 180.6 pence at 1115 GMT.