Acacia Mining plunged to a loss of more $700m in 2017 after the gold producer was forced to write down the value of assets in Tanzania, where it has been embroiled in a bitter row with the government.

In addition to the $850m impairment charge, Acacia said it had also increased its uncertain tax provision by $172m to $300m because of the dispute with President John Magufuli of Tanzania.

The London-listed company has been unable to export gold from Tanzania since March because of a battle over unpaid taxes. That has hit profits and its share price hard.

“The challenges in our operating environment led to our production guidance being revised during 2017, whilst the ongoing ban on the export of gold/copper concentrate meant that we were unable to export and sell 185,800 ounces of produced gold which led to a substantial cash outflow ” said Peter Geleta, Acacia’s interim chief executive in a statement.

In the year to December, Acacia reported a loss of $710m against a pre-tax profit of $242m a year earlier, while the company’s cash position fell to $80.5m from $318m. The company scrapped its dividend.

Mr Geleta said negotiations between the government and Barrick Gold, Acacia’s majority shareholder, were ongoing. In October, Tanzania and Barrick agreed the outlines of a possible deal, which they hope to put before Acacia in the first half of this year for approval.

“We are providing support to Barrick in its ongoing discussions, and any proposal that may be agreed in principle between Barrick and the government of Tanzania will require Acacia’s approval,” said Mr Geleta.

President Magufuli has refused to hold any negotiations with Acacia, which he says has cheated the country of tens of billions of dollars by understating by more than 10 times the gold and copper concentrate levels in its mineral exports.

Much of the results were pre-released and we think the focus has to be on minimising cash outflows until a resolution with the government is reached. Until then we expect limited upward pressure on the shares,” said Richard Hatch, analyst at RBC Capital Markets.

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