MAC/20: Mines and Communities

Opposition demands "opening up" of recent Barrick agreement

Published by MAC on 2020-02-03
Source: The Citizen (Tanzania)

Tanzania's Opposition in its National Assembly has raised doubts about the validity of the recent "historical" deal with Barrick Gold - a votal issue that may delay its implementation [see:  Barrick in fresh Tanzanian deal ]

Tanzania Government Told to Open Up Over Barrick Deals

The Citizen (Dar es Salaam)

By Habel Chidawali

30 January 2020

Dodoma — Debate on the newly-signed agreements between the government and
Barrick Gold Corporation found its way into the National Assembly
yesterday, with the Opposition ranks mounting pressure on the government
to reveal contents of the pacts.

Last week, the two parties to the deal put pen to paper on a long-awaited
mining agreement that redefines how the leading global gold miner would
operate in Tanzania.

Among other things, the deals give the State a 16 per cent holding in
three operating gold mines whose combined output is Tanzania's biggest
exports earner. The government and Barrick, according to the agreements,
will also split 'economic benefits' on a 50/50 basis with Tanzania in the
new joint venture, Twiga Minerals Corporation, after factoring in
operational costs. But the shadow minister for Minerals, Mr John Heche
(Chadema - Tarime Rural), told journalists here yesterday that at least
four issues have not been made open regarding the deal between the
government and Barrick Gold. As such, he said, it would be wise if the
agreements were sent to Parliament so that 'the truth' could be revealed
to the people's representatives in the august House.

Mr Heche, who was addressing journalists in Parliament's press gallery,
said his party would press the government to reveal details of the claimed
economic benefits that Tanzania would get under the pacts.

"We also need the government to come out and openly explain what the 16
percent ownership means to Tanzanians," he said.

At the height of the dispute between the government and Barrick's defunct
subsidiary, Acacia Mining, the former slapped the latter with a $190
billion bill in unpaid tax claims, including penalties and interest.

In a 2017 investigative report that was prepared by the team led by
Abdulkarim Mruma, it was discovered that, while only three types of
minerals - gold, copper and silver - were being declared (whose value was
under-declared, anyway!), the gold concentrates contained eight other
types of minerals. The report concluded that Tanzania had been losing
billions of US dollars from the under-declaration of gold, copper and
silver concentrates, and from non-declaration of eight other types of
minerals. The Opposition bench in the House says it was unfortunate that
no more information was revealed on the topic after the government and
Barrick signed the deals.

The government has now allowed Barrick, under Twiga - the joint company -
to resume exportation of the mineral concentrates but the Opposition
questions why exports would start while the due taxes, penalties and
interest have not been paid.

"Barrick should have paid the money first because once a tax claim has
been made, in line with Section 14 of Tanzania Revenue Authority Act,
nothing can be done until the money is paid," he said.

He said the signed agreements were in contravention of provisions of the
mining law as outlined in sections 4, 9, 11 and 12 of the Written Laws
(Miscellaneous Amendments) Act 2017, which hitherto amended the Mining
Act. "These provisions prohibit the exportation of mineral concentrates.
They also prohibit the country from being sued by investors in foreign
courts. All these have not been considered in the signed agreement," he
said.

 

 

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