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Tanzania allows Barrick to ship gold concentrate

The Bulyanhulu gold mine, opened in 2001. (Archive image courtesy of Acacia Mining.)

Barrick Gold (TSX:ABX) (NYSE:GOLD) will finally be able to ship gold concentrate containers out of Tanzania, which have been sitting at Dar es Salaam Port for three years due to a dispute over taxes between the country and the gold giant’s now defunct subsidiary, Acacia Mining.

The decision comes four months after reaching a deal with Barrick, which ended the tax row and granted the government a stake in three gold mines operated by the Canadian gold giant through a joint venture — Twiga Minerals.

Barrick has paid Tanzania $100m towards the $300m agreed in the January deal, which ended a tax dispute originally involving the now defunct Acacia Mining

“This is a striking example of what a true partnership can achieve in building a sustainable business capable of creating long-term value for all stakeholders,” president and chief executive officer, Mark Bristow, said in the statement.

The shipping of about 1,600 containers of gold and copper concentrate from the Bulyanhulu and Buzwagi mines resumed in April, Barrick said. The first $100 million received from had been paid to the government, as part of the $300 million-settlement agreed on January 24.

The Toronto-based miner said the initial payment will be followed by five annual payments of $40 million each.

“Contrary to the past, where these claims were handled by the mine, the compensation process is being overseen by a committee representing Twiga, the government, the local authorities and the affected communities,” Barrick said. “This will ensure that the process is transparent and that issues are dealt with fairly and promptly.”

The wait has played in Barrick’s favour, as gold prices have climbed by about 9% since the end of January as investors seek safe-haven assets amid the coronavirus pandemic.

The company, the world’s no. 2 gold miner, is forging ahead with plans to sell about $1.5 billion in assets by the end of 2020. At the same time, it’s looking to buy more top-tier gold projects and invest in copper assets.