Acacia Mining (LON:ACA), Tanzania’s No.1 gold producer, said Monday that parent company Barrick Gold (TSX, NYSE:ABX) has yet to reach an agreement with the East African nation’s government to end a running dispute over taxes that has severely hit the miner’s bottom line.
Barrick, which has been negotiating on Acacia’s behalf with the Tanzanian government for over a year, had said it would deliver a deal for Acacia’s board to vote on by the end of June.
In an update on the matter published late Sunday, however, the world’s largest gold producer didn’t commit to set a new deadline, limiting instead to say that talks had been “constructive” and ongoing.
“Progress has been made on the drafting of definitive agreements necessary for the implementation of the proposed framework,” Barrick said in the statement, adding that it could not provide a new cut-off date “in order to allow the process to continue in an orderly manner.”
In March last year, Tanzania accused Acacia of understating its production and seized containers of gold and copper concentrate ready for export. The move was followed shortly after by a $190-billion tax bill.
Barrick, which owns 63.9% of Acacia, struck a framework agreement in October that was supposed to end the tax row. The deal would see the company giving Tanzania a 16% stake in three gold mines operated by Acacia, a one-off payment of $300 million (£227.6 million), and a 50:50 partnership with the government to split “economic benefits” from operations.
Acacia Mining, which owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara, has said that a final draft for such agreement would need to be reviewed by its board.
“The company will continue to engage with Barrick to seek to understand its expectations for the future conduct and a timetable for the completion of its discussions with the Government of Tanzania,” it said Monday.
The African nation is the continent’s third-largest gold producer.