23 August 2017

Tanzania: Deep Silence in Govt-Barrick Talks

Photo: State House
Minister for Justice and Constitutional Affairs, Professor Palamagamba Kabudi, welcomes Barrick Gold Corporation negotiations team members to the State House in Dar es Salaam.

Questions have been lingering over the outcome of negotiations between the Tanzanian government and Barrick Gold Corporation over a tax dispute.

Nonetheless, nothing has so far been disclosed and neither the government nor Barrick, which wants to solve the tax controversy involving its subsidiary company, Acacia Mining, is updating the public about the talks.

Experts are of the view that all is well as long as the talks are going on and that it would be worse only if the mining company opts to take the matter to the court of arbitration.

Repoa senior researcher Dr Abel Kinyondo expressed optimism that the end would benefit both parties, saying as long as the negotiations were in progress; there was no reason to be negative.

"We know nothing about the progress of their talks, but we harbor hopes of a better end because the negotiations are in progress," he said.

The government formed a team for the negotiations whose members have yet to be known.

For his part, University of Dar es Salaam, Political Science Department, lecturer, Prof Mohamed Bakari said it was normal for conflict resolution talks to be held in top secrecy.

According to him, that is why the members of the negotiation team from the government have not been disclosed save for the team leader, minister for Justice and Constitutional Affairs Prof Palamagamba Kabudi.

"This issue is complicated as each part is accusing the other for one reason or the other... so it will take time to agree," he said.

Prof Bakari was confident that after the conclusion of the negotiations, the government would come with an official statement over the saga, which has drawn international attention.

Barrick Gold owns 63.9 per cent of Acacia Mining.

The management of Acacia has been excluded from the on-going talks, but any agreement with Barrick will be subject to approval.

Barrick hinted on the matter for the last time on July 2016 when it announced second quarter financial results.

It said the discussions concerning the concentrate export ban and other issues impacting Acacia Mining PLC's operations in the country were to begin in a week's time.

The government through the President's communication department released a statement on July 31 stating that the negotiations had started.

No further updates about the progress of the talks have been released to the public domain since then, apart from media reports that the negotiating teams were going to different places including paying visits to mining sites.

However, over three weeks now, it is not clear whether the Barrick Gold's team is still in Tanzania or not while the location of the talks is still a top secret.

President John Magufuli banned the exportation of metallic mineral concentrates and later formed two committees to investigate the matter.

The first team, which was mainly formed by academics in the mining industry, was formed in early April and submitted its report on May 24.

It reported discrepancies in ratios of gold, copper and other minerals in the concentrate and recommended stay of the ban.

The second team formed by economists and lawyers was formed in late April and presented its report on June 12.

The second committee accused Acacia of operating illegally and that the company under-declared its revenue and taxes since it started operations.

The mining giant refuted findings of both committees saying it declared everything and operated according to the law.

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