Dar es Salaam — The government says it was still negotiating with Barrick Gold Corporation despite missing the December 31, 2019 deadline for the negotiations.
This comes after reports from foreign media outlets indicated that the two parties were ‘tussling’ over ratifying the agreement that has been reached between the two.
Last year, the government and Barrick Gold signed a deal to settle a long-running tax dispute with the now defunct Barrick subsidiary Acacia Mining.
As part of the agreement, Barrick would pay $300 million to the government of Tanzania to end the dispute.
It was reported in October last year (2019) that the agreement also included the lifting of the government’s ban on concentrate exports; an equal share between the two of future economic benefits from the mines – and that the government would get a 16 per cent stake in each of the Bulyanhulu, North Mara and Buzwagi mines that are currently owned by Barric Corporation.
The mines would thereafter be managed by a new operating company called Twiga Minerals, and which would be formed following the review. The final agreements would be reviewed and authenticated by the Tanzanian Attorney General.
However – according to DaMina Advisor – the two parties were far from ratifying the agreements. DaMina Advisors is a global frontier markets political risk research, due diligence, geopolitical risk and mergers and acquisitions (M&A) transactions consulting firm.
In its latest update, DaMina Advisors say the Tanzania government was seeking to re-open and renegotiate key elements of the deal. It says Barrick Corporation has yet to make the $300 million payment in exchange for a lifting of the concentrates exxports ban.
It claims to have reports that Tanzania was now demanding that Barrick sells all its concentrates to a local smelter that’s currently under construction in Dodoma instead of exporting it.
But, in a quick rejoinder, a senior government official – who preferred not to be named – dismissed the claims. According to the official, the two parties were in the final stages of finalizing the deal. He insisted that, although the two parties – Barrick and the government – had missed the original deadline, there were nevertheless no any hard feelings between them.
Shortly after assuming Office in November 2015, President John Magufuli banned the exportation of metallic mineral concentrates – just as soon formed two committees to investigate the matter.
The first team, which was mainly formed by academics in the mining industry, was formed in early April 2016 and submitted its report on May 24 the same year.
It reported discrepancies in ratios of gold, copper and other minerals in the concentrates being exported, and recommended continuation of the ban. The second team of economists and lawyers was formed in late April and presented its report on June 12, 2016.
The second committee accused Acacia Mining of operating illegally – and that the company had routinely been under-declared its revenues and taxes since it started operations in Tanzania.
The government of Tanzania and Barrick Gold Corporation started the negotiations in 2017 to resolve tax disputes and the ban on exports of metallic mineral concentrates.