Talks to settle Tanzania gold fraud dispute

2017-06-14 19:18


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Dar es Salaam - Tanzania has agreed to negotiations with Canadian mining giant Barrick Gold which it accuses of operating illegally and evading taxes, a government statement said Wednesday.

Barrick is the majority shareholder in London-listed Acacia Mining which a presidential commission report said this week was not registered to operate in Tanzania and had failed to pay taxes worth billions of dollars. Barrick refuted the allegations.

On Wednesday, its executive chairperson John Thornton flew to Tanzania to meet with President John Magufuli after news of the allegations caused the company's share price to fall.

Barrick "is ready to discuss with the Tanzanian government the reimbursement of money lost by Tanzania as a result of the company's operations in the country," the presidency said in a statement, without giving further details.

According to the statement, Thornton is "ready to enter into a dialogue with the Tanzanian government in the interests of both parties and pay what must be repaid to Tanzania."

Magufuli had accused the company of "stealing from us" in a live televised address this week, but welcomed the proposed discussions.

He said a special committee would be appointed, "with a view to an agreement on the reimbursement of the money due to Tanzania and how the company will now conduct its operations in the interests of both parties."

On Monday, a government commission said fraud in the mining sector had cost Tanzania $84bn over 19 years and blamed foreign companies for failing to declare revenues.

Tanzania is rich in minerals and ranks fourth among gold producers on the continent. Gold is the country's leading mineral export and one of its primary sources of revenue.

Tanzania also exports copper, nickel, silver, diamonds and other precious stones such as tanzanite.

In March, Tanzania said it was banning exports of non-processed ore in a bid to promote the development of the mineral processing sector, create new jobs locally and increase revenues generated by the sector.

The statement on Wednesday also said Thornton had agreed that Barrick would "cooperate" in the construction of a smelter in Tanzania.

Last month, Magufuli dismissed the country's mines minister after receiving a report from geologists that said mining companies had underestimated their mineral exports in order to pay lower taxes.

The report had said that poor management of the sector meant officials were not able to tell how much or what kind of ores were being exported.

Read more on:    john magufuli  |  tanzania  |  east africa

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