Government receives maiden payment of Sh100 bn from Twiga

What you need to know:

  • The government also received a Sh1.1 billion dividend from the State Mining Corporation (Stamico).

Dar es Salaam. Tanzania yesterday received the maiden dividend of $40 million (about Sh100 billion) from Twiga Minerals which was jointly formed with Barrick Gold.

The government also received a Sh1.1 billion dividend from the State Mining Corporation (Stamico).

President John Magufuli banned the exportation of concentrates by Barrick Gold’s Acacia in 2017, and the government ordered the miner to pay $90 billion in unpaid taxes.

Following the dispute, the government entered into negotiation with Barrick Gold and in January this year, the two sides signed a deal which partly demanded the formation of a new mining company in Tanzania through joint venture.

Twiga Minerals Corporation was formed with the government of Tanzania taking 16 percent in free-carried equity as required by the law. Twiga Minerals issued the $40 million as part of $250 million dividend issued to both the government and Barrick Gold.

“There are people who opposed when we started renegotiating with Barrick but this is the outcome of our negotiations,” said Dr Magufuli who witnessed the handing of the dummy cheque to the government.

He expressed his happiness following the development and thanked Barrick management for reaching the deal.

“Our negotiation is finally bringing impact to the poor Tanzanians. The money will finance development activities such as free education, infrastructure development as well as the provision of social services,” he said at the function also attended by other government leaders and stakeholders from the mining sector.

The event was also attended by Mr Saniniu Laizer, a Tanzanian who recently emerged shilling billionaire after finding tanzanite stones in Mirerani.

The association of small scale miners awarded Dr Magufuli as the centry president following the reforms he made in the mining sector.

Dr Magufuli recalled how tough the negotiation was, revealing that those who were in the negotiation team representing Tanzania had to be isolated from their families.

“We did that because of fears to be corrupted and let us down. They did their job very well and I congratulate them for that,” said Dr Magufuli.

Dr Magufuli also asked other foreign investors to come to Tanzania and describe the country as the best investment destination.

He said some challenges were already addressed and asked government officials to continue solving investment challenges.

“What we want is just win-win situation with the investors,” he said.

He also said his wish was to see more ordinary Tanzanians benefiting from the mining sector and generate more billionaires like Mr Laizer.

As part of the agreement to settle the dispute with the government of Tanzania, Barrick also agreed to pay $300 million in good will.

In May this year, Barrick’s Tanzania subsidiary Twiga Minerals resumed exports of gold concentrate after receiving clearance for its first shipments since the lifting of a government ban imposed during a tax dispute with the mining company.

After the shipping of some 1,600 containers of concentrate stockpiled from Bulyanhulu and Buzwagi in April, the firm also paid the first $100 million received from the sale to the government as part of its framework agreement with the government.

Barrick Gold said in a statement yesterday that Twiga Minerals Corporation paid the maiden interim cash dividend of $250 million to both shareholders “in line with Barrick’s commitment to generate value for all stakeholders through the 50/50 partnership.”

“Since Barrick took over the former Acacia Mining’s assets in Tanzania just over a year ago, it has paid approximately $205 million to the government in taxes, royalties and dividends in addition to the first payment tranche under the two parties’ agreement to settle pre-Barrick disputes,” the firm stated.