Dar es Salaam. The government said it remained hopeful to securing the agreement negotiated with Barrick Gold Corporation, despite reports that the giant miner’s Tanzanian partner, Acacia, was not keen on the deal.
Barrick CEO Mark Bristow expressed frustrations with Acacia’s apparent reluctance to embrace the negotiated frame work agreement and suggested Barrick may have to “force” an end to stalled talks with Tanzania over the fate of Acacia Mining. He however did not give a timeline.
Acacia is Barrick’s subsidiary with bussiness primarily in Tanzania where it operates the North Mara, Bulyankhulu and Buzwagi gold mines. Barrick holds about 64 per cent stake in the Tanzania miner. Acacia has been at odds with the government since July 2017, when the state handed the London-listed gold producer a $190 billion tax bill, saying it falsely declared bullion exports.
Bristow who became Barrick chief executive officer in January 2019 is keen to end the raw by signing a final deal with the government but revealed in a candid interview his frustration with Acacia’s lack of interest and approach to the matter.
“We would definitely at a point intervene and force the process, but right now it’s not a constructive way to try to solve this problem.”
Bristow also said that “almost any solution is better than none” on the issue, according to media reports quoting from an interview he held in Toronto, Canada, Wednesday.
Acacia reacted to Bristow’s statement yesterday, saying it would seek clarification from Barrick on the comments that it noted were not consistent with its own understanding. The company which was not directly involved in the negotiations between the government and Barrick said it has not yet received the proposed settlement between the parties.
“Once Barrick has been able to bring their discussions to a successful conclusion, and the Company receives a proposal agreed in principle between Barrick and the government, the Independent Committee of the Board of Acacia will be able to decide whether to recommend the proposal to the Company’s shareholders for approval,” it said in a statement.
Yesterday, authorities in Tanzania said while they may not fully be appraised on the reported standoff, they were nevertheless confident of reaching an amicable solution.
The executive secretary of the Minerals Commission, Prof Shukrani Manya, said negotiations were still ongoing and no deadline had been set on when to effect payment of any financial settlements.
“We are still in negotiation with Barrick but the sooner they decide to pay the better for all of us,” he told The Citizen in a telephone interview.
The minister of Minerals Dotto Biteko said he was in Dar es Salaam for official business and could only comment after consulting members of the negotiation team in Dodoma. Foreign affairs minister Prof Palamagamba Kabudi who is leading the government team in the negotiations was unavailable.
Barrick and the government have previously said that the plan includes the gold producer paying $300 million to resolve the outstanding tax claims. It also involves a 50-50 sharing of the “economic benefits” of Acacia’s operations with the state.
Acacia has been frozen out of the talks, but its board will have to approve any deal. Once that is done there is uncertainty over the future of the miner, with an insider source hinting Barrick would favor taking back full control of the unit. There has been several reports pointing to a possible Barrick deal with Chinese mining interests to run the Tanzanian business.
“It’s a tragedy; what we’re dealing with is a complete breakdown of relationships,” Bristow said Wednesday, noting that the Tanzanian government refuses to deal with Acacia. Bristow declined to provide more details on what an intervention would look like.
“There’s a way where we could get involved in wrapping up the business going forward and then deal with the assets ourselves,” Bristow said. “Or there’s a way where we could cooperate with the Acacia board and we could look at strategic options and realize the assets in a different way. Those are the options that we have.”
Later on Wednesday Bristow, who is known for speaking plainly, revisited his frustration during the first-quarter earnings call.
“At this stage, almost any solution is better than none,” he told analysts, noting that the protracted dispute “has already destroyed a great deal of value.”