Barrick pays Tanzania initial 230.32bn/- to settle gold deal

Barrick Gold said it has paid $100 million (Shs230.32bn) owed to the government after the two sides agreed in 2019 to settle allegations of due tax. 

The allegations were levelled at Acacia Resources, in which Barrick had a 64 per cent stake, and resulted in a three-year standoff between the companies and the Tanzanian government. 

During the conflict, gold-in-concentrate exports from the Bulyanhulu and Buzwagi mines were prohibited. 

In the end, Barrick bought out Acacia and agreed to reimburse the government $300m in settlement of the tax claims (which had totalled $190bn) and share the proceeds of the mines on a 50:50 basis through a joint venture company called Twiga Minerals Corporation (Twiga). 

The $100m payment an- nounced yesterday represents the first proceeds from gold in concentrate exports from the mines. Thereafter, Bar- rick will pay $40m to the Government of Tanzania in five annual instalments. 

The sides had also agreed 90% of land claims at a third mine in Tanzania North Mara – that had been levelled by the government. The first of several planned payments in respect of the land claims was due to be made today, said Barrick. 

The payments will be made through a joint committee in which Twiga is a participant in an effort to improve trans- parency, the company said. Previously, the land claim payments were conducted exclusively by the North Mara mine. 

“The basis of the settlement, which also provides for future claims, was produced during several weeks of close and constructive engagement between Twiga, the Ministry of Mines, the Ministry of Land, the local authorities and the community,” said Willem Jacobs, Barrick Chief Operating Officer (COO) for Africa. 

Jacobs also pointed out that water management at North Mara was being managed in line with best practice. In the latter days of the conflict with Acacia, the government threatened North Mara with a prohibition order on production and said exports would be banned owing to alleged environmental abuses. 

Mark Bristow, Chief Executive Officer (CEO) at Barrick, is renowned for making short work of disputes with host governments on fiscal and other financial matters. 

He said this month the group had decided to pay dividends to the Democratic Republic of Congo (DRC) earlier than planned. As a free-carried partner in the Kibali mine in the DRC, the country’s government would normally be entitled to dividends after the partners – Barrick and Anglo- Gold Ashanti – had been paid. 

The DRC government had earlier sought to monetise its stake in Kibali by selling it to a Canadian junior mining company – a transaction Bristow was able to head off. 

Bristow has, however, been less successful in getting the DRC government to pay VAT refunds totalling $252m.