Barrick Gold CEO Mark Bristow (centre), flanked by Palamagamba Kabudi, Tanzania's foreign minister and Willem Jacobs, Barrick COO for Africa and Middle East, in Dar es Salaam, Tanzania, October 20 2019. Picture: REUTERS/EMMANUEL HERMAN
Barrick Gold CEO Mark Bristow (centre), flanked by Palamagamba Kabudi, Tanzania's foreign minister and Willem Jacobs, Barrick COO for Africa and Middle East, in Dar es Salaam, Tanzania, October 20 2019. Picture: REUTERS/EMMANUEL HERMAN

Barrick Gold agreed to pay $300m to the Tanzanian government to end a long-running dispute that it says destroyed the value of its subsidiary Acacia Mining’s assets.

As part of the deal, which must still be approved by Tanzania’s attorney-general, the government will be given a 16% stake in a renamed company known as Twiga Minerals, Barrick said on Sunday. The payments are to settle all outstanding tax and other disputes. The agreement means a ban on export of concentrates will be lifted, Barrick said.

“Rebuilding these operations after three years of value destruction will require a lot of work, but the progress we’ve already made will be greatly accelerated by this agreement,” Barrick CEO Mark Bristow said.

“Twiga, which will give the government full visibility of and participation in operating decisions made for and by the mines, represents our new partnership not only in spirit but also in practice.”

The breakthrough ends a disagreement between Tanzania and a Barrick subsidiary that started in 2017. Tanzania banned the export of unprocessed metals by miners, subsequently presenting Acacia with a $190bn tax bill, equivalent to two centuries of revenue.

Acacia, which owned the three mines in Tanzania, was bought by Barrick this year. For almost two years, Barrick has been leading negotiations with Tanzania over terms of the deal, first negotiated by the company’s executive chair, John Thornton.

The agreement means that Tanzanians would share fully in their nation’s mineral wealth, Barrick said.

Bloomberg