Canada’s Barrick Gold (TSX: ABX) (NYSE: GOLD) and Tanzania inked a deal on Friday that grants the African nation stakes in the three gold mines the company operates there, ending a long-running tax dispute and setting a template for negotiations with other firms.
The ceremony comes three months after both parties reached an agreement in which Barrick accepted to pay $300 million to settle outstanding tax and other disputes. The deal also include the lifting of a concentrate export ban and the sharing of future economic benefits from the miner’s operations in the country on a 50-50 basis.
It also ratifies the creation of Twiga Minerals Corporation, a company jointly owned by Barrick and the Tanzanian government, which will oversee the management of the Toronto-based miner’s local operations.
North Mara, Buzwagi and Bulyanhulu mines, which Barrick acquired through the takeover of Acacia Mining in September last year, are now owned 84% by the gold giant and 16% by the East African nation.
Chief executive, Mark Bistrow, said on state TV he was happy that Barrick’s “long safari” in Tanzania had ended well. Safari means “journey” in Swahili.
Casting himself as a “Zulu boy” born in Zululand, Bristow called the pact signed today “historical”.
“Many people said your criticism will chase away investors … what it’s done is challenge the mining industry and all of us to embark on something where we win together or lose together,” he said.
Following today’s ceremony, Barrick and Tanzania will continue to work on implementing other aspects of the signed deal. In particular, the gold miner plans to partner with the University of Dar es Salaam and commit up to $10 million in funding over a 10-year period for training and skills development in the mining industry.
Barrick said it would also earmark up to $40 million to upgrade the road between Bulyanhulu and Mwanza, as well as constructing a housing compound and related infrastructure.
Barrick, the world’s No. 2 gold miner, is forging ahead with plans to sell about $1.5 billion in assets by the end of 2020. At the same time, it’s looking to buy more top-tier gold projects, in Canada and elsewhere, and invest in copper assets.