Barrick Gold and the Government of Tanzania have arrived at a proposal to settle outstanding disputes between the company’s subsidiary Acacia Mining and the government.
The latest proposal sets forth the commercial terms to resolve disputes related to Acacia Mining’s operations in Tanzania.
Barrick Gold will submit the proposal to the Independent Directors of Acacia Mining for their consideration.
The latest deal comes after a longstanding dispute between Acacia Mining, which is 63.9% owned by Barrick Gold, and Tanzania President John Magufuli, who claimed that the company owed $190bn in unpaid taxes. Tanzania shut down the company’s rights to export gold ore concentrate in March 2017.
Furthermore, Acacia Mining was accused of underreporting the amount of ore in its concentrate.
Last month, Tanzania imposed a fine of TZS300m ($129,143) on Acacia Mining over allegations of violating environmental regulations at its North Mara mine.
As part of the new framework, a local operating company will be created to manage Acacia Mining’s operations in the country.
Economic benefits from the mine operations will be shared with the Tanzanian government equally.
Tanzania will receive its share of benefits in the form of royalties, taxes and a 16% free carry interest in the country’s operations.
Acacia Mining will also pay $300m to Tanzania to resolve outstanding tax claims.
Barrick Gold president and CEO Mark Bristow said: “Significant amounts of real value have been destroyed by this dispute and, in Barrick’s view, this proposal will allow the business to focus on rebuilding its mining operations in partnership with their respective stakeholders, and most importantly long-suffering investors, including Barrick.”
Work is currency underway to finalise the definitive agreements that are required to give effect to the proposal, which will become effective upon approval by Acacia Mining and Tanzania.