GOVT STARTS NEGOTIATIONS WITH BARRICK OVER TAX DISPUTE
Dar es Salaam. The government has started talks with Barrick Gold Corporation, the majority shareholders of Acacia Mining to resolve tax dispute and a ban on export of metallic mineral concentrates.
Tanzania team is led by minister of constitutional and legal affairs Professor Palamagamba Kabudi, while the Barrick’s team is led by its Chief Executive Officer Richard Williams.
Speaking shortly before the discussion began Prof Kabudi said his team will put forward the country’s interests during the discussion. On his part Mr Williams said he is optimistic that the discussion will resolve the dispute.
Barrick holds which holds a 63.9 per cent equity interest in Acacia Mining. The government slapped Acacia with $190 billion tax bill. The government insisted on negotiating with Barrick as it doesn’t recognise Acacia as it is not registered in Tanzania.
In March this year, President John Magufuli announced a temporary ban on exports of metallic mineral concentrates and immediately formed two committees, which recommended a permanent ban on the same after accusing Acacia of illegally operating in the country and evading tax.
Barrick chairman John Thornton flew to Tanzania and met President Magufuli in mid-June and they agreed to engage in negotiations to resolve the row.
Recently President Magufuli threatened to close down gold mines in the country if mining companies delayed talks with his government to resolve the matter.
In response Barrick said it continues monitoring the situation and should Acacia revise its full-year outlook, it will evaluate the impact. Any effect will depend on the duration of the concentrates export ban, it said.
Acacia operations impacted by the current ban on concentrate exports (Bulyanhulu and Buzwagi) account for approximately six per cent of the company’s 2017 gold production guidance. In total, Acacia accounts for about 10 per cent of Barrick’s 2017 gold production guidance.
The world’s largest gold miner by production reported better-than-expected quarterly earnings on Wednesday as its mining costs fell.
The company reported adjusted net earnings of $261 million or 22 cents a share in three months ending June up from $158 million or 14 cents a share in the same period last year on the back of lower mining costs and higher gold and copper sales.
That beat the 18 cents a share that analysts had expected, on average, according to Thomson Reuters.
With mines in Nevada, Australia, South America and Tanzania, Barrick produced 1.43 million ounces of gold in the quarter, up from 1.34 million a year ago, at an all-in sustaining cost of $710 an ounce compared to $782 per ounce last June quarter.
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