Barrick to Restart Gold Mining in Tanzania
October 20 2019 - 1:45PM
Dow Jones News
By Jacquie McNish
Barrick Gold Corp. is poised to restart gold mining in Tanzania
after the company agreed to pay $300 million to the African country
and share ownership and other benefits at its three local
mines.
Barrick's gold exports from Tanzania have been halted since
early 2017 over tax and other disputes with the government. Barrick
CEO Mark Bristow said that the agreement marks a new era of
partnership with a host country that ends "three years of value
destruction."
The deal, which is subject to approval of Tanzania's attorney
general, requires Barrick to form a new company, Twiga Minerals
Corp., to manage the company's three gold mines. Barrick has agreed
to give Tanzania a 16% stake in each of its three mines and share
half of the mines' royalties, cash distributions and other economic
benefits with the country.
Mr. Bristow has promised a resolution to the complex legal and
political dispute since he took the helm at the Toronto-based gold
miner in January. The South-African-born executive joined Barrick
after its $6 billion all-share merger with Randgold Resources Ltd.,
which he helped found in 1995.
Barrick's gold exports from Tanzania were stopped after the
country's President John Magufuli launched what he called an
"economic war" against foreign miners that he alleged weren't
paying sufficient taxes and royalties.
Barrick was served in 2017 with a $190 billion bill for what
Tanzanian authorities said were unpaid taxes, penalties and
interest accumulated in previous years.
At the time of the shutdown, Barrick's majority-owned African
subsidiary Acacia Mining PLC was the country's largest gold miner
with $1 billion in annual revenue.
Barrick's executive chairman John Thornton sought to lift the
export ban in late 2017 with a surprise offer to pay Tanzania $300
million and other benefits. The overture hadn't been approved by
Barrick's board or by directors at its subsidiary Acacia,
triggering a governance tug of war that delayed a settlement in
Tanzania.
Barrick overcame the impasse by acquiring full control of Acacia
earlier this year.
Write to Jacquie McNish at Jacquie.McNish@wsj.com
(END) Dow Jones Newswires
October 20, 2019 13:30 ET (17:30 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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