Barrick Gold Resolves Dispute With Tanzania, Strikes Partnership Deal -- 2nd Update
October 19 2017 - 4:34PM
Dow Jones News
By Jacquie McNish and Nicholas Bariyo
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 also 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.
The details of the agreement weren't immediately available,
prompting Acacia to issue a short news release stating it had yet
to review the specifics of the plan, which is subject to its
board's approval.
Barrick issued a second statement Thursday afternoon stating its
63.9%-owned Acacia will form a new operating company with
Tanzania's government to hold its three gold mines in the country.
The new company will split "economic opportunities" with Tanzania
in the form of royalties and tax payments. Acacia has committed to
increase local hiring and supply purchases.
Barrick said it is still in talks with Tanzania about the terms
of lifting the country's ban on Acacia's exports of gold
concentrate imposed earlier in March.
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.
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 double the
mining industry's contribution to gross domestic product to 10% by
2025.
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 and Nicholas
Bariyo at nicholas.bariyo@wsj.com
(END) Dow Jones Newswires
October 19, 2017 16:19 ET (20:19 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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