A framework outlining the necessary steps for achieving this outcome has been signed in Dar es Salaam following a meeting between Barrick Gold executive chairman, John L. Thornton and the President of the United Republic of Tanzania, His Excellency Dr. John P. Magufuli.
“Following constructive discussions with our Tanzanian partners, we have developed a framework for a modern, 21st century partnership that should ensure Acacia’s operations generate sustainable benefits and mutual prosperity for the people of Tanzania, as well as for the owners of Barrick Gold and Acacia Mining,” says Thornton.
“A partnership requires trust between the parties, and transparency is the currency of trust.
“Through our discussions over the last three months we have established both and this will form the basis of our relationship in the future,” adds Thornton.
Key highlights of the proposed agreement:
A new Tanzanian operating company will be created to manage Bulyanhulu, Buzwagi and North Mara, and all future operations in the country. The principle of total transparency between partners will define how this company operates. For instance, the Government of Tanzania will participate in decisions related to operations, investment, planning, procurement, and marketing.
This company will maximise employment of Tanzanians, building local capacity at all levels of the business, from board membership to operations. It will also increase procurement of goods and services within Tanzania. Barrick Gold has also committed to work with the Government of Tanzania to advance concepts for increasing in-country beneficiation of gold.
Economic benefits from Bulyanhulu, Buzwagi, and North Mara will be distributed on a 50/50 basis between the new operating company and the Government of Tanzania. The Government’s share of economic benefits would be delivered in the form of royalties, taxes, and a 16 percent free carry interest in the Tanzanian operations.
In support of the working group’s ongoing efforts to resolve outstanding tax claims, Acacia will make a payment of $300 million to the Government of Tanzania, on terms to be settled by the working group.
Barrick and the Government of Tanzania are also reviewing conditions for the lifting of the country’s concentrate export ban.
Barrick Gold and the Government of Tanzania have also agreed to form a working group that will focus on the resolution of outstanding tax claims against Acacia Mining.
Under this proposal, as a gesture of good faith, Acacia Mining would make a payment of $300 million to the Government of Tanzania, with payment terms to be settled by the working group.
All proposals are subject to review and approval by the independent committee of Acacia Mining’s board of directors and Acacia Mining shareholders.
Acacia Mining will provide further details on the proposals in due course.
Barrick Gold holds a 63.9% equity interest in Acacia Mining, a publicly traded company listed on the London Stock Exchange that is operated independently of Barrick Gold.
Feature image credit: Acacia Mining