Mark Bristow taking over the leadership of Barrick Gold Corp. facilitated negotiations with Tanzania about a multibillion-dollar tax dispute that could be resolved by May, the country’s attorney general said.
Barrick unit Acacia Mining Plc has been at odds with Tanzania’s government since July 2017, when the state handed it a $190-billion tax bill, saying the gold producer falsely declared bullion exports. Bristow was named Barrick chief executive officer in January, and the following month the company said it’s reached a settlement proposal with the government.
Ideally, Tanzania would want a 50 percent stake in the new company that will run Acacia’s mines
“It has rationalized things a little bit,” Adelardus Kilangi said of Bristow’s appointment. “I think within one, two months a deal will be struck.”
Shares in Acacia rose as much as 4.9 percent in London, the most since Feb. 20, the day Barrick announced the initial settlement proposal.
Barrick, which owns 63.9 percent of Acacia, said at the time the plan includes the gold producer paying $300 million to resolve outstanding tax claims, and the two parties sharing the “economic benefits” of Acacia’s operations on a 50-50 basis with the state. The government may end up with a larger share than that in the final deal, Kilangi said on the sidelines of a conference in Maputo, Mozambique’s capital.
“At the end of the day, the country will actually get more,” he said. “If you add up to that the taxes and other revenues, remittances, it will probably go to 65 percent to 70 percent.”
Ideally, Tanzania would want a 50 percent stake in the new company that will run Acacia’s mines, said Kilangi. The government has been negotiating with Barrick not Acacia, as Barrick holds the mineral development agreement, he said.
The timing of any deal would depend on Barrick “solving their internal issues” with Acacia, said Kilangi, without elaborating.
(By Matthew Hill)
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