Friday, December 22, 2017

Mine deal upsets Barrick Gold Ltd

A move by parent company of Porgera Gold mine and Canadian mining giant Barrick Gold Corporation has stunned the global mining community.
This is in relation to developments to Acacia mines in Tanzania and one of the largest gold producers in Africa.
Barrick Gold Corp has agreed to handover a 16 per cent stake to each of its three gold mines in Tanzania to the government and the people.
It was the culmination of recent months of discussions following the Tanzanian government’s ban on direct export of raw concentrated minerals, claiming Acacia owes them $US190 billion in taxes.
In commenting on the developments Barrick Niugini Limited executive manager, Richmond Fenn said Porgera Gold mine has paid more than K3.3 billion in taxes and more than K520 million in royalties, providing revenue for Enga, the government and Porgera landowners.
“The mine is a provider of commercial revenue and has contracted over K4.2 billion worth of goods and services from PNG businesses during its’ operations, including approximately K1 billion in contracts provided to Porgera businesses,” Mr Fenn said.
He said the PJV shareholders which includes BNL, Porgera landowners and the Enga provincial government have worked well over the years to ensure the mine operates effectively and continues to provide benefits to Papua New Guinea.
The combined value of the mines that are operated by the London stock exchange listed Acacia Mining Plc is into the billions of dollars, and with the successful conclusion of the agreement, the government of Tanzania is in for a sizable fortune.
Given the agreement is concluded successfully. At the framework stage, the deal also includes awarding of a 50 per cent of consolidated mining revenue from its mining unit in the country to the host government going forward and a $US300 million one-off payment to be made by Acacia as a “show of good faith”.
As reported, it now awaits the formal nod to the full terms of the ‘framework agreement’ from Acacia Mines Plc to seal the deal that will drastically shift the mining, including petroleum benefit sharing landscape towards host governments and nations into the future.
Among strong reactions to it, the Resource Owners Federation of PNG (ROFPNG) are calling on the PNG government to review its existing agreements with mining operators in the country.
Chairman of ROFPNG Jonathan Paraia said the Tanzanian deal is proof that developers will not run from a country asking for a fair deal, if there is still money to be made and Barrick is prepared to pay to stay in Tanzania.
He said landowners and the government has to consider the Tanzanian deal if they want to benefit better from their own mining and petroleum projects.
Mr Paraia said past governments of Tanzania had only been collecting royalties and taxes as benefits when these were entitlements.
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