CHAIRPERSON of Tanzania’s negotiating team that has been holding talks with Barrick Gold Corp, Prof Palamagamba Kabudi has said Tanzania actually benefits by 70-30 in the deal and not 50-50.
Prof Kabudi, who is also the Minister
for Constitution and Legal Affairs made the remark yesterday as prices
of Acacia shares on the London Stock Exchange shot up by 36.6 per cent.
He noted that 50-50 would be effected after Barrick Gold Corp pays all
taxes and levies to the government and met other ob ligations.
“We’ll be paid 50 per cent after the
company has paid 30 per cent income tax, 6 per cent royalties, road and
fuel levies, council levies and other social services. In Dominica,
Argentina and Saudi Arabia where Barrick applies 50-50 per cent, the
payments include all taxes and levies.
And, this area caused a tug of war
during the negotiations and we won, it is not anywhere in the world.
It’s a great success and we’ve made great strides,” he explained. Prof
Kabudi explained further that Tanzania had tremendously benefited from
the deal as despite the fact it is holding 16 per cent while Barrick
holds 84 per cent shares, yet it reaps 70 per cent.
He further revealed that, contrary to
popular belief, Tanzanian government had five major issues during the
negotiations apart from mineral concentrates (mineral sands).
According to Prof Kabudi, President John
Magufuli instructed them to use the negotiations to open new direction
of management and use of natural resources including minerals. “Many
people thought we’re going to negotiate on mineral concentrates alone,
but the intelligence and plans of our Hon ourable President Magufuli was
to go beyond that issue.
“If we focused on concentrates alone,
then we could have ended only in the payments of concentrates. But now
we’ve got more than the payments; that’s why all new laws have been
accordingly honoured and considered in the deal,” stated Prof Kabudi.
He insisted that the deal was landmark
for Tanzania and questioned intelligence of people who don’t recognise
benefits accrued by Tanzania from the deal. “Anyone who does not know
this then we should pray for him (to God) so that he/she is given
brains, eyes and ears to get required understanding.
This deal has not happened anywhere in
the World,” added Prof Kabudi. In another development, shares of the
gold miner Acacia on the London Stock Market has surged after its
majority owner Barrick revealed it had struck a tentative deal to
resolve a bitter dispute with the Tanzanian government.
Shares of the firm shot up 36.6 per cent
to 249.3p following the announcement, which is aimed at resolving a
dispute that began when Tanzania introduced a ban on gold and copper
concentrate exports in March that sent Acacia’s shares plunging.
The stock jumped to 255.50p after
Canadian mining group Barrick - which owns 64pc of Acacia - unveiled a
breakthrough in talks. On Thursday, the government and Barrick inked a
historic deal to share profits accrued from the mine on a 50-50 ratio
and grant the State a 16 per cent stake in its gold mines.
The negotiations were reached after
discussions between experts from the two sides, focused on resolving a
tax dispute involving the Canadian company’s subsidiary, Acacia Mining.
The company also agreed to pay 300 million US dollars (700bn/- ) as sign
of good faith while the negations were still underway.
According to the deal, Tanzanians will
also get permanent employment and will no longer stay in camps because
they had agreed to drop the contractual employment system. Under the new
arrangement, the companies will also deposit income accrued from the
business in local banks and transfer its offices from London and
Johannesburg to Tanzania.
The two also resolved that the company’s
headquarters will be located in Mwanza, but it can also open offices in
other areas, and that Tanzania will also have representatives in board
of directors of the companies.
In March this year, the President formed
an eight-man probe team of experts led by Prof Abdulkarim Mruma to
investigate and establish the amount of minerals and its value,
contained in mineral sand exported abroad.
The team exposed massive losses of
trillions of shillings in exported minerals. The report led to the
formation of another team lead by Prof Kabudi, to represent the country
in negotiations and look into how Barrick Gold Corporation would conduct
its activities in the country for the benefit of all parties.
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