20 Oct End in sight for Acacia’s Tanzania dispute as tentative agreement reached
Shares in Africa-focused gold miner Acacia Mining jumped 30% on the news that its majority owner Barrick Gold had struck a preliminary deal with the Tanzanian government to resolve an acrimonious dispute.
Barrick revealed that it will allow Tanzania to take a 16% stake in three gold mines operated by Acacia, along with a 50% share in the revenues from the mines and a one-off payment of US$300 million.
The agreement represents the beginnings of a resolution to a bitter dispute which centred on the government’s claim that Acacia had been under-reporting its exports and under-scoring state payments.
A minerals export ban ensued in March after the claims were made public, and were followed by a hefty $190 billion tax bill, both of which have taken a considerable toll on the company, which claimed it was losing $1 million a day.
Barrick’s executive chairman John L Thornton signed the agreement with Tanzanian president John Magufuli in Dar-es-Salaam. “A partnership requires trust between the parties, and transparency is the currency of trust,” said Thornton.
“Through our discussions over the last three months we have established both and this will form the basis of our relationship in the future.”
Acacia said in its Q3 report it had cut spending by 33% compared to the same period a year ago, revising its strategy in light of the gold and copper export ban.
The company remains Tanzania’s biggest investor and one of the largest producers of gold on the continent.