Economy

Barrick and Tanzania sign pact

Barrick and Tanzania sign pact”

Yesterday, Acacia's shares shot up more than 30 per cent after its parent company Barrick Gold came to a long-awaited agreement with the government of Tanzania over the future of its mines, which are operated by Acacia.

The proposed payment is a "a show of good faith", Barrick Executive Chairman John Thornton said Thursday at a briefing after a six-hour meeting with President John Magufuli in the commercial capital, Dar es Salaam.

Acacia's shares climbed to an nearly three-month high of £2.53 (US$3.34) following the announcement.

Canadian miner Barrick, which owns 64% of Acacia, revealed after the market closed yesterday that Acacia would form a new joint venture with the Tanzanian government to operate its three mines in the country, including Bulyanhulu and Buzwagi and North Mara.

Acacia said it was seeking clarification regarding the agreement which was meant to resolve a seven month government embargo on mineral concentrate exports from Acacia's Bulyanhulu and Buzwagi mines.

Acacia rose as much as 41 percent in London, the biggest intraday gain since its initial public offering in March 2010, and ended the session up 16 percent. The cash balance fell to £95,321 from £302,061 in the same period previous year.

"Any proposal agreed in principle between Barrick and the GoT [Government of Tanzania] will require Acacia's approval". The plan to keep trading profitably, however, seems prudent considering negotiations with the Tanzanian government remain fluid, the bank said.

The state will have representatives on the board of the company and at every mine.

Acacia will have the headquarters for its operations in Mwanza, Tanzania.

"Following constructive discussions with our Tanzanian partners, we have developed a framework for a modern, 21st century partnership that should ensure Acacia's operations generate sustainable benefits and mutual prosperity for the people of Tanzania, as well as for the owners of Barrick and Acacia", Thornton said.

Barrick said the benefits sharing will be achieved through transferring a 16 per cent interest in the three mines to the government, as well as through royalties and taxes.



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