In July 2017, Acacia Mining was ordered by the Tanzanian government to settle a tax bill of $190bn
Barrick Gold has agreed to pay $300m to the Tanzanian government to settle all disputes pertaining to Acacia Mining in the African country.
The agreement puts an end to the trouble faced by the Africa-focused Acacia Mining after it was ordered by the Tanzanian government in July 2017 to settle a tax bill of $190bn.
Recently, Barrick Gold wrapped up its previously announced $1.2bn takeover of the company after securing approval from the High Court of Justice in England and Wales.
The agreement between Barrick Gold and the Tanzanian government covers all the pending disputes between the latter and the mining companies that were previously operated by Acacia Mining. Currently, the companies are being managed by Barrick Gold.
The Canadian company said that final agreements have been filed with the Tanzanian Attorney General to seek its review and legalization.
According to Barrick Gold, its payment to the Tanzanian government will resolve all outstanding tax and other disputes, the removal of the concentrate export ban, and the sharing of economic benefits from the mines on a 50:50 basis in the future.
Furthermore, it will pave way for the establishment of an Africa-focused international dispute resolution framework, said the Canadian miner.
Acacia Mining has been involved in three Tanzanian mines
To operate the producing Bulyanhulu, North Mara and Buzwagi mines in Tanzania, Barrick Gold will create a new company called Twiga Minerals.
The Tanzanian government will acquire a free carried shareholding of 16% in each of the three mines and will get its share of the economic benefits in the form of royalties, taxes, clearing fees, and participation in all cash distributions made by the mines and Twiga Minerals.
The North Mara mine, which had to be closed due to the dispute with the Tanzanian government, is likely to be re-opened following negotiations from Barrick Gold.
Barrick Gold president and chief executive Mark Bristow said: “Rebuilding these operations after three years of value destruction will require a lot of work, but the progress we’ve already made will be greatly accelerated by this agreement.
“Twiga, which will give the government full visibility of and participation in operating decisions made for and by the mines, represents our new partnership not only in spirit but also in practice.”