Tanzania to own 16pc stake in Acacia's three gold mines

Thursday October 19 2017

Tanzania's President John Magufuli with Barrick Gold's chairman John Thornton at State House Dar es Salaam

Tanzania's President John Magufuli with Barrick Gold's chairman John Thornton at State House Dar es Salaam on October 19, 2017. PHOTO | CITIZEN | NMG 

By HELLEN GITHAIGA
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Barrick Gold has agreed to sell a 16 per cent stake in three mines in Tanzania to the government.

The company also agreed to share 50 per cent of the revenues from the mines.

Barrick's chairman John Thornton made the announcement at a news conference at State House Dar es Salaam on Thursday after a meeting with President John Magufuli and government officials.

The mines -- Bulyanhulu, Buzwagi and North Mara -- are operated by Barrick's Acacia Mining, where it holds a 64 per cent stake.

The Canadian miner has also agreed to pay $300 million as a show of good faith after it was slapped with a $190 billion tax bill for alleged underdeclaration.

The company has been in talks with the Tanzanian government to resolve the tax dispute as well as an export ban of its mineral concentrates.

Tanzania's Minister for Justice and Legal Affairs Palamagamba Kabudi, who was leading the government team, said the miner has agreed to abide by the new mining laws.

Prof Kabudi also said that they had asked that Acacia's headquarters moves to Mwanza, "the city that is located at the heart of the gold zone.”

Mr Thornton said the agreement reached in the talks are subject to its directors and shareholders' approval.