TANZANIA and Bar- rick Gold Corpora- tion yesterday signed agreements that opened a new chapter in the country’s mining sector by granting the government ownership of 16 per cent of undiluted shares in the newly incorporated Twiga Minerals Corporation.
The government has also taken control of 16 per cent stake in each of the three Barrick mines managed by the Twiga Minerals Corporation--- Bulyanhulu, North Mara and Buzwagi and sharing of future economic benefits from the mines on a 50/50 basis.
The agreements between the government and the Canadian company marks the end of the tax disputes negotiations between the two parties and set a precedent for issuance of future mining licences.
The nine pacts signed at the State House in Dar es Salaam and witnessed by representatives from the government and Barrick were Framework Agreement, Management and Administrative Services, Twiga Shareholders Agreement and North Mara Shareholders Agreement.
Others are Bulyanhulu Shareholders Agreement, Buz wagi Shareholders Agreement, North Mara Development Agreement, Bulyanhulu Development Agreement and Pangea Development Agreement.
Speaking shortly after the signing of the agreements, President John Magufuli assured Barrick Gold Corporation and other investors around the world that Tanzania was the best investment destination.
He said the signing of the agreements have ended the longrunning tax disputes and opened a new era.
“Since we have agreed on principles and signed these agreements you should abide by the terms and conditions ... and those who will be representing Tanzania should not allow to be bribed because you are representing the country’s interests,” Dr Magufuli stressed.
Dr Magufuli pledged that the government would offer full cooperation to Barrick since the two had agreed to end all disputes. He urged the company to work hard because it had expertise and capital while Tanzania had the raw material (gold).
Foreign Affairs and East African Cooperation Minister Prof Palamagamba Kabudi said the renegotiation and signing of the agreements had enabled the country to get its fair share.
Prof Kabudi, who also doubles as Tanzania’s Negotiating Committee Chairman, said the new Mining Act 2017 requires all investors to obtain mining licences which will be issued by the Tanzania Mining Commission under the guidance of the cabinet which is chaired by president.
He said the government will acquire a free carried shareholding of 16 per cent in each of the mines and will receive its half of the economic benefits through taxes, royalties, clearing fees and participation in all cash distribution made by the mines and Twiga.
Barrick President and Chief Executive Mark Bristow said that Twiga Minerals represents a structure which allows the government and the people of Tanzania to be involved in decision making of everything that they will do together in their partnership.
“As miners we have very big responsibility... to extract a national resource and deliver value not only for our shareholders but to all other stakeholders in the country,” he said.
He said there have been lots of criticisms and gossip about the negotiation but the signing of the agreements marked a historical day for Africa.
“Many people said your criticism will chase away investors but what it has done is a challenge to the mining industry and all of us to embark on something where we win together or lose together,” Mr Bristow said.
He said they have a lot of experience to learn from because there were many mistakes committed in the past.
“If we don’t learn from the past and cannot do better than what we experienced in the past ten years we don’t deserve to be here,” the Barrick CEO said.
The Tanzania dispute originally involved Acacia Mining, which was bought out by Barrick last year in a $1.2 billion transaction.
In October last year, Barrick Gold and the government said they had agreed to settle the dispute in a deal including payment of $300 million to settle outstanding tax and other disputes, the lifting of the concentrate export ban, and the sharing of future economic benefits from mines on a 50-50 basis.