20 October 2017

Tanzania: JPM - After Barrick Success, Switch to Tanzanite, Diamond

Photo: Daily News
Tanzanite.

President John Magufuli greets the Barrick Gold Corp. Executive Chairman, Prof John Thornton, shortly before receiving the agreement report, in Dar es Salaam.

AFTER successful negotiations between the government and Barrick Gold on sharing of revenues in the mining of gold, President John Magufuli has called for similar discussions in the mining of tanzanite and diamond, in order to create a win win situation.

"Make arrangements with the investors and commence the negotiations as soon as possible; the deliberations should be in the same spirit as for the ones on gold. The objective is to ensure that the natural resources benefit the people.

"Any investor who refuses to negotiate with the government should pack up and leave; the resources are rewards endowed to this country by God, and should thus benefit our people," Dr Magufuli stated in Dar es Salaam yesterday.

Dr Magufuli was speaking at the State House in Dar es Salaam yesterday, during an occasion where he was briefed on the outcomes of negotiations between the government and Barrick Gold, focused on tax disputes between the two parties.

The negotiations came after the two presidential committees exposed anomalies in declarations of the quantity and value of copper concentrates produced by the company.

After discussions which spanned about three months starting July, Barrick Gold, the parent company of Acacia Mining; the mining conglomerate agreed to share profits accrued from the three mines it operates in Tanzania on a 50-50 ratio and granting the State a 16 per cent stake in the same.

The Head of State was categorical that all investments in the mining of minerals and gemstones such as tanzanite and diamond ought to be engaged in the negotiations for a win-win situation; and should they refuse, they pack up and leave.

"Negotiations are crucial to enable the country reap its fair share of the resources bestowed on it; we have made successful discussions with Barrick Gold because we engaged them," he remarked.

The President congratulated the two teams of experts who were involved in the discussions for work well done, describing the task as an exemplary one.

"I think I will have to reward you at least with certificates of appreciation for the service you have rendered to this country," he pledged; revealing on the other hand that he had decided to put the members out of public for their security and deter them from being exposed to corruption.

The eight-member negotiation team from Tanzania was led by the Minister for Justice and Constitution Affairs, Prof. Palamagamba Kabudi, while that of the miner was led by Barrick Gold's Chief Operating Officer, Mr Richard Williams.

"Now that you have done a good job in these negotiations, I direct that similar discussions should be extended to companies involved in mining of tanzanite and diamond," the jovial Dr Magufuli instructed, adding: "What Tanzania has done in these discussions represents a new dawn and we have set a precedent in Africa; I am highly confident that other countries will come and learn from us. It was a difficult task but it was well executed."

He also praised the National Assembly for enacting new legislations which will enable the government reap a fair share from natural resources. Dr Magufuli directed the negotiation teams to form small groups of experts to iron out a few remaining disputes between the government of Tanzania and the mining conglomerate.

He praised the miner for its decision to pay US $300 million dollars to the government as a sign of good faith, urging it to dish out the funds as soon as possible to enable the State to channel it into development projects.

Dr Magufuli also directed that levies which are supposed to be paid to local government authorities should be made promptly. Barrick Gold holds 63.9 per cent equity interest in Acacia Mining, which is a publicly traded company listed on the London Stock Exchange.

Barrick Gold subsidiary Acacia Mining has three mines in Tanzania, on two of which, Buzwagi and Bulyanhulu, an export ban for concentrates of gold and copper ore was slapped in March. Tanzania is Africa's third largest gold producer after South Africa, Ghana and Mali.

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