Canadian mining company Barrick Gold’s subsidiary Acacia Mining will pay $300m to the Tanzanian government to settle an ongoing tax and revenue sharing dispute.
An agreement signed in this connection will see the government receive economic benefits from the Bulyanhulu, Buzwagi, and North Mara operations on a 50/50 basis going forward.
The operations at the three mines and all other future mining activity of Acacia in Tanzania will be carried out by a newly created Tanzanian operating company.
Barrick executive chairman John L. Thornton said: “Following constructive discussions with our Tanzanian partners, we have developed a framework for a modern, 21st century partnership that should ensure Acacia’s operations generate sustainable benefits and mutual prosperity for the people of Tanzania, as well as for the owners of Barrick and Acacia.
“A partnership requires trust between the parties, and transparency is the currency of trust. Through our discussions over the last three months we have established both and this will form the basis of our relationship in the future.”
Barrick and the Tanzanian government have also agreed to review conditions for removing the concentrate export ban in the country.
The gold miner said that all the proposals would need to be reviewed and approved by the independent committee of Acacia’s board of directors along with its shareholders.
Barrick, which holds a 63.9% stake in Acacia which was asked to settle a massive tax bill of $190bn by the Tanzanian government in late July. Acacia refused to pay the bill, which led to a stand-off with the government.
Last month, Acacia announced its plans to trim down its operations in the Bulyanhulu gold mine, a move that could impact 2,000 employees and contractors.
The company had blamed the gold and copper concentrate export ban imposed by Tanzania in March to have affected around 35% of its year-to-date group production.