Barrick Gold, the New York Exchange-listed mining company with deep business ties in Africa, has once again ignited strong business prospects in Tanzania’s mines—one of East Africa’s nation endowed with abundant minerals.
Within its statement, provided on Thursday, January 28, 2021, the miner stated that its mines in Tanzania are revived and performing well, this comes after Barrick gold resolved laid disputes raised by the government and ushered new dawn of partnership in the profitable sector.
“The North Mara and Bulyanhulu gold mines both produced near the top end of their production guidance in 2020, their first full year under Barrick’s management. Including Buzwagi, the Tanzanian assets delivered a combined output of 462,472 ounces for the year” the statement read in part.
Road to ignition of business
Barrick—the world second-largest gold miner took over Acacia mining and went through a rather historic path to secure business in Tanzania, after rather inheriting a couple of serious concerns raised by the Tanzania government, including tax evasion which led to a ban of mineral concentrates in 2017.
On March 2019, the government raised life-threatening environmental concerns on North Mara gold mine and ordered the mine to be shut by March 30 2029, as contaminated water discharge by the miner seeped to nearby communities.
In pursuit of clearing the mining dispute, on October 2019, Barrick negotiated with Tanzania, which birthed a joint partnership company Twiga Minerals overseeing operations of Bulyanhulu, North Mara and Buzwagi mines.
Barrick gold accepted the payment of the $300 million tax claim and other disputes and managed to clear the shipment of the mineral concentrates and lifted the ban.
Further, the deal also brought it remarkable changes to the mining industry in Tanzania, this includes, sharing of future economic benefits from mines on a 50-50 basis. The government will buy a 16 per cent shareholding in each of the mines.
“A true partnership can only be described when you have 50/50 and our joint venture with the government of Tanzania is exactly that – a committed partnership to develop Tanzania’s gold assets for the benefit of all stakeholders,” said Mark Bristow, Barrick Gold CEO told reports in Tanzania, October 20, 2019.
More importantly, the miner has demonstrated high spirit in reviving operations and adding value. Since Barrick took over the former Acacia Mining’s assets in Tanzania just over a year ago, it has paid approximately $205 million to the government in taxes, royalties and dividends in addition to the first payment tranche under the two parties’ agreement to settle pre-Barrick disputes(Barrick Gold, 2020).
Business after the deal
“The mines have been successfully revived, with North Mara delivering significant improvements and underground production restarted at Bulyanhulu. The mines, managed through the Twiga joint venture with the Government of Tanzania, paid a maiden dividend of $250 million in October 2020” Barrick Gold statement read in part.
Barrick gold noted that North Mara posted a record throughput in the fourth quarter and Bulyanhulu recommended processing of underground ore during the quarter.
The mines are set to execute profitable sustainable operations as the statement cited that “Bulyanhulu is scheduled to be in full production when its ramp-up is completed, expected during the first half of 2021. Both mines performed creditably on the health, safety and environmental front,”,
The statement noted that Bristow was confident on the current progress the company is making in Tanzania, “These mines are now very different businesses. North Mara’s Life of Mine production profile has been vastly improved and implementation of its comprehensive water management plan is on track. Bulyanhulu’s resurrection was a particularly exceptional achievement, considering that both its shaft and plant had to be refurbished extensively. The new mine plan is designed to deliver a long-term value-driven operation,” he added.
Further, Barrick gold CEO highlighted the miner is optimizing it’s 10-year plan to make the combined North Mara and Bulyanhulu mines the seventh Tier One asset in its portfolio as well as prolonging social relations with host communities.
Over the past year, the miner invested $800 million in the Tanzanian economy in terms of taxes, permits, infrastructure development, salaries and payments to local suppliers(Barrick Gold, 2021).
While the capital and exploration expenditures exceed $180 million for the year of which half related to growth projects and this respective investment is prolonging into 2021.
The North Mara gold mine is located in north-west Tanzania. It is around 100 kilometres east of Lake Victoria and 20 kilometres south of Kenyan border.
This mine began its commercial production in 2002. According to Barrick Gold, the mine is a combined open pit and underground operation from two deposits
Bulyanhulu gold mine is located in north-west Tanzania, approximately 55 kilometres south of Lake Victoria and 150 kilometres south of west of Mwanza city—where Twiga Minerals headquarters are supposed to be situated.