Acacia Mining disputes Tanzania audit as shares sink

* Acacia shares have nearly halved since export ban began

* Govt audit committee recommends review of mining laws (Recasts, adds shares, quotes)

By Fumbuka, Ng'wanakilala and Zandi Shabalala

DAR ES SALAAM/LONDON, June 12 (Reuters) - Acacia Mining (Frankfurt: 33A.F - news) on Monday disputed the outcome of a second audit by the Tanzanian government which said the company had underdeclared revenues and tax payments for years and by billions of dollars, sending its shares 13 percent lower.

The investigation committee, commissioned by President John Magufuli, recommended that the gold miner pay outstanding taxes and royalties, and called for a review of mining laws and government ownership in mines.

"Acacia strongly refutes these new unfounded accusations. We have always conducted our business to the highest standards and operated in full compliance with Tanzanian law," the London-listed company, Tanzania's biggest miner and largest foreign investor, said in a statement.

Acacia has been caught up in Magufuli's campaign to reform the mining industry, a key source of foreign exchange for the East African country. The sector accounts for about 4 percent of Tanzania's gross domestic product.

Tanzania banned the export of unprocessed ore in March and has pushed for the construction of a local smelter.

Shares (Berlin: DI6.BE - news) in Acacia Mining had fallen 13 percent to 261.78 pence in London by 1433 GMT. Acacia's value has nearly halved since the export ban took effect.

"Enough is enough ... we need investors, but not this kind of exploitation. We are supposed to share profits," Magufuli said in a televised address.

He said the investigation also found Acacia was not registered to operate in Tanzania and that the country lost up to 108.5 trillion shillings ($49 billion) in revenue from exports of gold and copper concentrates between 1998 and 2017.

The first audit committee, reviewing exports of gold and copper concentrate, said last month it had found 10 times more gold in Acacia's containers than the company had declared as well as undeclared minerals such as iron and sulphur.

The chairman of the investigating team, Nehemia Osoro, said in a televised presentation to the president that the government must own stakes in all large mining projects and recommended a review of all mining contracts and laws.

Investec (LSE: INVP.L - news) analyst Hunter Hillcoat called the committee's findings "implausible", adding that the motives of the Tanzanian government were unclear.

"Whether that motive is nationalization or a grab for more taxes or a share of the mines - no one knows yet. The market is understandably pricing in risk."

Acacia said it remained open to talking with the government.

Magufuli said if Acacia "confess that they have been looting the country, the government is ready to do business".

Barrick Gold (Hanover: ABR.HA - news) , which owns 63.9 percent of Acacia, said in a statement it believed a negotiated resolution would be the best outcome to the dispute.

($1 = 2,233.0000 Tanzanian shillings) (Writing by Duncan Miriri and Zandi Shabalala; Editing by Edmund Blair and Dale Hudson)