Barrick Gold in deal with Tanzania

Barrick Gold will give Tanzania a 16% stake in three gold mines, a 50% share of revenue from those mines and a $300m one-off payment to resolve a dispute that has hit its operations.

Barrick Gold will give Tanzania a 16% stake in three gold mines, a 50% share of revenue from those mines and a $300m oneoff payment to resolve a dispute that has hit its operations, the two sides said on Thursday.

The Canadian miner and the Tanzanian government have been in talks for months after the country banned the export of unprocessed minerals and enacted laws to raise state ownership of the nation’s mines.

The agreement comes after the new laws and a crackdown on mining firms slowed fresh investment in what has long been seen as one of Africa’s brightest mining prospects.

President John Magufuli has said the government’s approach was aimed at ending what he called years of corrupt practices and tax evasion that have robbed the country of revenue.

Magufuli ordered government officials to begin talks with other companies in diamond and tanzanite mining to achieve similar agreements.

Tanzania is the continent’s fourth-largest gold producer and Acacia is its largest miner, with three gold mines that also produce copper.

Barrick chairman John Thornton said the deal would have to be approved by independent shareholders and directors of Acacia.

Minister of Justice and Constitutional Affairs Palamagamba Kabudi said the agreement was in keeping with the mining laws passed in July. “We have also agreed to have a 50:50 share of revenues between the government and Acacia Mining from all the mines,” he said.

There was previously no revenue-sharing agreement and the government’s take from mines was only from taxes and other royalties.