Barrick refuses to set deadline for settlement of Acacia-Tanzania row

26 June 2018 (Last Updated June 26th, 2018 11:45)

Barrick Gold has steered clear from setting a deadline for ongoing talks on behalf of its subsidiary Acacia Mining with the Tanzania Government to end a dispute over Acacia’s operations in the African nation.

Barrick refuses to set deadline for settlement of Acacia-Tanzania row
Operations at Bulyanhulu mine. Credit: Acacia Mining plc.

Barrick Gold has steered clear from setting a deadline for ongoing talks on behalf of its subsidiary Acacia Mining with the Tanzania Government to end a dispute over Acacia’s operations in the African nation.

The company, which holds a 63.9% stake in Acacia, noted that negotiations with the government are ‘constructive’, and that ‘progress’ has been made on the drafting of definitive agreements required to implement the proposed framework reached last year.

In a statement, Barrick said: “In order to allow the process to continue in an orderly manner and without an arbitrary deadline, Barrick is not providing a timetable for the completion of the discussions at this time.”

“Barrick is not providing a timetable for the completion of the discussions at this time.”

The row started when the government seized Acacia’s containers of gold and copper concentrate ready for export in March last year.

The company was accused of illegal mining and understating its production.

Subsequently, the Tanzania Revenue Authority issued a tax demand notice of $190bn on Acacia’s operations, involving $40bn of alleged unpaid taxes and around $150bn of penalties and owed interest.

As a result of the export restrictions on metal concentrate and reduced production at its Bulyanhulu mine in Tanzania, the company reported a net loss of $707m for last year.

Other mines operated by the company in the country include Buzwagi and North Mara.

In October last year, Barrick reached a framework agreement to settle the tax disputes that included a one-time payment of $300m, transferring a 16% stake in the three gold mines to the government.

The framework also required offering a 50% share in the revenues obtained from the mines to the Tanzania government.

In February this year, Acacia stated that it was exploring sale of a stake in some or all of its Tanzanian operations after Chinese firms expressed interest.