Canada’s Barrick Gold (TSX:ABX) (NYSE:GOLD) and Tanzania have arrived at a plan to settle disputes between the miner’s 63.9%-owned Acacia Mining (LON:ACA) and the country’s government, which includes a $300 million payment to resolve tax claims in the East African nation.
Among the proposals put forward, Barrick offered to create a local operating company in Tanzania and share economic benefits from Acacia’s operations with the Tanzanian government on a 50-50 basis.
“Significant amounts of real value have been destroyed by this dispute and, in Barrick’s view, this proposal will allow the business to focus on rebuilding its mining operations in partnership with their respective stakeholders,” Barrick Chief Executive Officer Mark Bristow said in the statement.
Bristow took the helm of Barrick in January following a merger with Randgold Resources, the Africa-focused company he built into one of the world’s largest gold producers.
Acacia Mining, Tanzania’s No.1 gold producer, and the country’s government have engaged in a long-dragged dispute over tax evasion, breach of environmental regulations, money laundering, corruption and other issues.
The African miner has been waiting for the Canadian gold giant to negotiate a settlement with President John Magufuli, after he forced it to stop exports of concentrate in early 2017.
That year, Tanzania’s government banned exports of unprocessed metal and slapped the miner with a $190 billion tax bill— equal to almost two centuries worth of revenue.
In October, Acacia was hit with fresh charges of money laundering and corruption and some of its employees were detained. And only last month, fined the miner 300 million Tanzanian shillings (about $129,144) over allegations of breaching environmental rules by its North Mara operation.
The plan for settling the longstanding dispute between the parties will soon be presented to Acacia’s independent directors, Barrick said.
“Work is under way to finalize the definitive agreements needed to give effect to the proposal. To become effective, the proposal and those agreements must be approved by Acacia and the Government of Tanzania, in keeping with applicable laws and regulations,” it said.
Acacia’s shares climbed 4.4% to 235 pence on the news and were trading at 234.30p by 1:00pm London time.