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Tanzania Says Acacia Mining Won't Be Allowed Role in Country
By
Kenneth Karuri
and
Danielle Bochove
May 28, 2019, 10:29 AM EDTUpdated on May 29, 2019, 3:03 AM EDT
“We will no longer work with Acacia,” Hassan Abbasi said Tuesday by phone. “Under no circumstances can Acacia be a party to the agreements, or have any role in the operation or management of the Barrick mining subsidiaries in Tanzania. The ball is now in Barrick’s court.”
Acacia has been at odds with Tanzania’s government since July 2017, when the state handed the London-listed gold producer a $190 billion tax bill, saying it under-declared bullion exports. Barrick has since led discussions with the government and, in an effort to solve the impasse, surprised the market last week with an informal plan to buy out Acacia’s minority shareholders.
In response to Toronto-based Barrick’s buyout proposal, Acacia advised its shareholders last week not to take action as it considers developments and tries to verify Tanzania’s position. On Tuesday, a spokesman for Acacia had no comment other than to reiterate that the company is continuing to seek clarification from the government.
2017 Framework
Abbasi said the government of Tanzania will continue to try to resolve the dispute based on a previous tentative agreement with Barrick.
“The initial agreement that we reached with Barrick in October 2017 is the one that is guiding the negotiations,” Abbasi said.
In a 2017 meeting between President John Magufuli and Barrick Executive Chairman John Thornton, it was tentatively agreed that Acacia would pay $300 million to the government to settle tax claims and would split future returns from operations with the country. At the time, Acacia criticized the move and blamed Barrick for its worsening relationship with Tanzania after Thornton took over negotiations.
Last week, Barrick said the government of Tanzania had made clear it won’t negotiate a settlement with Acacia. Barrick Chief Executive Officer Mark Bristow has repeatedly spoken about the breakdown of the relationship between the two companies, and between Acacia and the government.
A Barrick spokeswoman said Tuesday it had no additional comment.
Magufuli has vowed to secure more revenue from the country’s resources. His government is targeting boosting income from minerals by half in the 2019-20 fiscal year to 470.9 billion shillings ($205.1 million), according to the Mines Ministry.
“Barrick and Acacia have to sort out their differences so that we can move forward and resolve the dispute,” Abbasi said.
By
Kenneth Karuri
and
Danielle Bochove
May 28, 2019, 10:29 AM EDTUpdated on May 29, 2019, 3:03 AM EDT
- ‘Ball is now in Barrick’s court,’ government spokesman says
- Barrick-Tanzania talks still guided by 2017 framework: Abbasi
“We will no longer work with Acacia,” Hassan Abbasi said Tuesday by phone. “Under no circumstances can Acacia be a party to the agreements, or have any role in the operation or management of the Barrick mining subsidiaries in Tanzania. The ball is now in Barrick’s court.”
Acacia has been at odds with Tanzania’s government since July 2017, when the state handed the London-listed gold producer a $190 billion tax bill, saying it under-declared bullion exports. Barrick has since led discussions with the government and, in an effort to solve the impasse, surprised the market last week with an informal plan to buy out Acacia’s minority shareholders.
In response to Toronto-based Barrick’s buyout proposal, Acacia advised its shareholders last week not to take action as it considers developments and tries to verify Tanzania’s position. On Tuesday, a spokesman for Acacia had no comment other than to reiterate that the company is continuing to seek clarification from the government.
2017 Framework
Abbasi said the government of Tanzania will continue to try to resolve the dispute based on a previous tentative agreement with Barrick.
“The initial agreement that we reached with Barrick in October 2017 is the one that is guiding the negotiations,” Abbasi said.
In a 2017 meeting between President John Magufuli and Barrick Executive Chairman John Thornton, it was tentatively agreed that Acacia would pay $300 million to the government to settle tax claims and would split future returns from operations with the country. At the time, Acacia criticized the move and blamed Barrick for its worsening relationship with Tanzania after Thornton took over negotiations.
Last week, Barrick said the government of Tanzania had made clear it won’t negotiate a settlement with Acacia. Barrick Chief Executive Officer Mark Bristow has repeatedly spoken about the breakdown of the relationship between the two companies, and between Acacia and the government.
A Barrick spokeswoman said Tuesday it had no additional comment.
Magufuli has vowed to secure more revenue from the country’s resources. His government is targeting boosting income from minerals by half in the 2019-20 fiscal year to 470.9 billion shillings ($205.1 million), according to the Mines Ministry.
“Barrick and Acacia have to sort out their differences so that we can move forward and resolve the dispute,” Abbasi said.
