Barrick makes fresh agreement with Tanzania governmentPublished by MAC on 2020-01-28
Bristow Boy stirs minerals pot
Has the historically-hectored (and justifiably so) Barrick Gold finally worked out a deal with one of its critics, heralding a new era of partnership?.
That's what the company - doubtless benefiting from the longterm Afro-centric impact of its recently-appointed British CEO, Mark Bristow - now claims to have concluded with the Tanzanian government,
Whether a similar deal will materialise elsewhere - in Papua New Guinea for example - remains to be seen [see: Barrick battles with PNG ]
However, this does seem to be the only way that mining companies can survive for long in the socalled "nationalist" battle for justice and control with de-developed countries.
[Comment by Nostromo Research].
Barrick irons out issues in Tanzania with “historic” deal
24 January 2020
Canada’s Barrick Gold (TSX: ABX) (NYSE: GOLD) and Tanzania inked a deal on
Friday that grants the African nation stakes in the three gold mines the
company operates there, ending a long-running tax dispute and setting a
template for negotiations with other firms.
The ceremony comes three months after both parties reached an agreement in
which Barrick accepted to pay $300 million to settle outstanding tax and
other disputes. The deal also includes the lifting of a concentrate export
ban and the sharing of future economic benefits from the miner’s
operations in the country on a 50-50 basis.
It also ratifies the creation of Twiga Minerals Corporation, a company
jointly owned by Barrick and the Tanzanian government, which will oversee
the management of the Toronto-based miner’s local operations.
Barrick has budgeted $50 million for brown and greenfield exploration
in Tanzania this year
North Mara, Buzwagi and Bulyanhulu mines, which Barrick acquired through
the takeover of Acacia Mining in September last year, are now owned 84% by
the gold giant and 16% by the East African nation.
Chief executive Mark Bistow said on state TV he was happy that Barrick’s
“long safari” in Tanzania had ended well. Safari means “journey” in
Casting himself as a “Zulu boy” born in Zululand, Bristow called the pact
signed today “historical.”
“Many people said your criticism will chase away investors … what it’s
done is challenge the mining industry and all of us to embark on something
where we win together or lose together,” he said.
Following today’s ceremony, Barrick and Tanzania will continue to work on
implementing other aspects of the signed deal. In particular, the gold
miner plans to partner with the University of Dar es Salaam and commit up
to $10 million in funding over a 10-year period for training and skills
development in the mining industry.
The company has also budgeted $50 million for brown and greenfield
exploration in Tanzania this year.
Barrick added it would earmark up to $40 million to upgrade the road
between Bulyanhulu and Mwanza, as well as constructing a housing compound
and related infrastructure.
Snow ball effect
Tanzania, Africa’s fourth-largest gold producer, is revising other mining
and energy agreements as part of a law passed in 2017 by President John
Magufuli’s government, aimed at securing more revenue from the country’s
The new regulations include an act that requires parliamentary approval
for future agreements, which must “fully secure” the interests of
Tanzanians. It also restricts exports of raw minerals, repatriation of
funds and access to an international dispute resolution mechanism.
Other changes in the Mining Act set up a commission to regulate the
industry, overhauled the requirements for the storage, transportation and
processing of raw minerals. It also increased royalty rates and government
shareholding in mineral right.
(With files from Reuters.)