Barrick Gold, Tanzania Strike Partnership Deal -- Update
October 19 2017 - 12:42PM
Dow Jones News
By Jacquie McNish
TORONTO -- Barrick Gold Corp. said its African subsidiary will
make a $300 million payment to the government of Tanzania as part
of an agreement to resolve tax and revenue sharing disputes over
its three gold mines in the country.
The Toronto-based mining company said its majority controlled
Acacia Mining PLC has struck a framework for a new partnership that
will hand the African government 50% of the economic benefits of
its mining operations. Further details of the agreement weren't
disclosed.
Acacia, which is 63.9% owned by Barrick, said it didn't receive
a copy of the agreement until after its parent and the government
announced the pact early Thursday morning. The company said any
agreement is subject to Acacia's approval and it has yet to review
the details.
Acacia is Tanzania's biggest gold miner in the country with $1
billion in annual revenue. It was served with a $190 billion bill
earlier this year for what Tanzanian authorities have said were
unpaid taxes, penalties and interest accumulated over the past 17
years.
Tanzania banned exports from two of Acacia's mines in March
after the government alleged it found 10 times more gold in the
company's export containers that in declared to Tanzanian
authorities. Acacia disputed the claim
The aggressive actions by Tanzania President John Magufuli, who
earlier this year declared an "economic war" on foreign miners,
prompted some companies to cease or scale back mining operations in
the country.
Benjamin Mchwampaka, minerals commissioner with Tanzania's
mining ministry, said the government had negotiated "a very good
deal" with Acacia, which he said was in line with a July revamp of
the country's mining laws.
"Apart from the legal requirements, we will be sharing revenues
equally with Acacia Mining, this is what we have been pushing for
all along," Mr. Mchwampaka said. "We are very pleased."
He said the government plans to start negotiations on revenue
sharing with other mining companies, as it pushes to increase the
contribution of the mining industry to its gross domestic product
to 10% by 2025, from the current 5%.
The agreement was signed in the Tanzanian city of Dar es Salaam
on Thursday morning following a meeting with Barrick Executive
Chairman John Thornton and Mr. Magufuli.
"We have developed a framework for a modern, 21st century
partnership that should ensure Acacia's operations generate
sustainable benefits and mutual prosperity for the people of
Tanzania, as well as for the owners of Barrick and Acacia," Mr.
Thornton said in a statement.
Write to Jacquie McNish at Jacquie.McNish@wsj.com
(END) Dow Jones Newswires
October 19, 2017 12:27 ET (16:27 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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