27 Oct Barrick Gold hopes for resolution to Tanzania gold export ban by mid-2018
The world’s biggest gold producer Barrick Gold Corp has said it will work with the Tanzanian government to ensure the current mineral export ban is lifted by the first half of 2018.
The Canadian company made the comments in its Q3 earnings statement, which revealed a dip in its financial performance resulting from lower production, primarily driven by the impact of a mineral export ban on its Tanzania-based gold miner Acacia Mining.
Barrick’s adjusted earnings declined to US$186 million, or 16 cents a share in the last quarter, leading to the decision to lower its 2017 production forecast to between 5.3 million and 5.5 million ounces of gold.
The report comes a week after it was announced that a framework deal had been reached with Tanzania to settle a dispute relating to Acacia’s alleged misreporting of its gold exports dating back many years.
Under the agreement, Acacia will make a $300 million payment to the government, and allow it to take a 16% stake in its three Tanzanian mines while sharing 50% of the economic benefits of the mines with the government.
However, the move has been criticised by industry analysts, for instance Chris Mancini of Gabelli Gold Fund said the 50% is ‘not a good precedent by any means’.
“Miners would generally want more than half the profits from mines to give them the incentive to build operations in geopolitically risky parts of the world. They are disincentivising development.”