Barrick Gold Corporation is back to business with Tanzania, after signing an agreement with the government of Tanzania earlier today in the commercial city, Dar es Salaam.
According to a statement from Barrick, the agreement formalizes the establishment of a joint venture between Barrick and the government and showcasing the government full visibility of and participation in operating decisions made for and by the North Mara, Bulyanhulu and Buzwagi mines.
Barrick finds the latter a rather pioneering move that would take its policy of partnership with its host countries to a new level.
Further, the agreement has ratified the creation of Twiga Minerals Corporation (of which initial establishment began last year), the management company jointly owned by the government and Barrick, overseeing the miner’s local operations.
The corporation is now owned 84 per cent by Barrick and 16 per cent by the government. Also, the deal provides for a 50/50 sharing in the economic benefits generated by the mining operations after the recoupment of capital investments
Speaking during the televised ceremony held at the statehouse, the minister for constitution and legal affairs, Prof Palamagamba Kabudi and also the chairman of the negotiation team, commended Barrick chairman, Prof John Thornton, for his cooperation throughout the negotiation period.
According to Prof Kabudi, the negotiation, which started three years ago, was on the verge of breaking apart, but due to Prof Thornton’s wisdom, the two parties reached consensus.
“He is an honest guy, who admitted that the existing deal between Barrick and government was not fair. We agreed to establish a new company,” he said.
Also, the Tanzanian President John Magufuli commented on the negotiation flow and gave out his appreciation to the team efforts (Barrick and government of Tanzania).
“Many Tanzanians might not be aware of your efforts. The sacrifice you put to defend national interests will be rewarded by God,” said the President.
In addition, the statement indicated that, following today’s signing ceremony, there are a number of matters which Barrick and the government will work together to implement.
Barrick will partner with the University of Dar es Salaam and commit up to $10 million in funding over a 10-year period for training and skills development in the mining industry, and will also commit up to $40 million to upgrade the road between Bulyanhulu and Mwanza as well as constructing a housing compound and related infrastructure.
However, Barrick Chief Executive Officer (CEO) Mark Bristow gave out his company’s plans for the future.
“Since taking over the operatorship, we have been engaging with local communities to restore the mines’ social license to operate and we are cooperating closely with the authorities to address the environmental issues at North Mara. In addition, we are working on a local supplier strategy as well as a community development plan to create sustainable economic opportunities for the people around our mines”, Bristow said
Also, Bristow commented that there was a strong focus on rationalizing and optimizing mine plans. Following the successful transition to owner mining at North Mara, this has already delivered a reduction in costs and an increase in free cash flow.
According to the statement, a similar result is expected at Bulyanhulu, where an integrated study aimed at optimizing the complete orebody should kick-start the resumption of mining operations there later this year.
“Reflecting our confidence in the potential of this highly prospective gold region, we have budgeted $50 million for brown and greenfields exploration here in 2020 alone and are looking at various opportunities to sustain and expand our operations”, Bristow said.
In line with Barrick’s commitment to employing and advancing locals at its mines, Barrick commented that Tanzanian nationals are being recruited and trained to replace expatriate employees as has been successfully done at Barrick’s other African operations. In addition, Acacia’s offices outside the country have been closed, and company records and day-to-day decision-making and accountability have been moved back to the operations in Tanzania.