(Reuters) – Barrick Gold Corp said it had reached a deal to settle a long-running tax dispute between Tanzania and mining group Acacia, which Barrick bought in a $1.2 billion transaction approved by a British court last month.
The tax deal includes the payment of $300 million to settle outstanding tax and other disputes, the lifting of a concentrate export ban, and the sharing of future economic benefits from mines on a 50-50 basis, Barrick said in a statement on Sunday.
“Barrick is definitely back in Tanzania,” Barrick president and chief executive Mark Bristow told reporters in Dar es Salaam, Tanzania’s commercial capital on Sunday.
“A true partnership can only be described when you have 50/50 and our joint venture with the government of Tanzania is exactly that – a committed partnership to develop Tanzania’s gold assets for the benefit of all stakeholders,” said Bristow.
A new operating company named Twiga Minerals will be formed to manage the Bulyanhulu, North Mara and Buzwagi mines after a review by Tanzania’s attorney general, the statement added.
Under the agreement, the Tanzanian government will also buy a 16% shareholding in each of the mines.
“This company has been registered in Tanzania and it will be headquartered in Mwanza, Tanzania,” Palamagamba Kabudi, Tanzania’s foreign minister said.
Kabudi, speaking at the news conference, said the deal marked a new partnership with Barrick under the new Twiga Minerals name.
“Twiga will make our new partnership an example to other mining ventures who are investing in Tanzania and who want to invest in Tanzania.”
He said details of the deal would be submitted to the country’s attorney general for review and he expected that to be completed by November 15.
An Africa-focused international dispute resolution framework will also be established as part of the agreement, Barrick said.
The deal comes days after the Canadian company fell short of analysts’ estimates for third-quarter gold production due to low output at its North Mara mine in Tanzania.
(Reporting by Sabahatjahan Contractor in Bengaluru and Nuzulack Dausen in Dar es Salaam Editing by David Holmes and Jane Merriman)