Following its failure to meet a mid-year target for the completion of talks to end a tax dispute in Tanzania, Acacia Mining on Monday announced that its majority shareholder Barrick Gold would not set a new date for settlement discussions.
The tax dispute between Acacia mining and Tanzania ensued in 2017 when the miner was served with a $190 billion bill in unpaid taxes, penalties and interest. The East African nation has been making sweeping changes to its mining industry in order to reap more benefits from its minerals.
Negotiating on Acacia’s behalf with the Tanzanian government, Barrick had previously agreed to provide an agreement for approval by Acacia’s board by the end of June. However, Barrick in a statement on Sunday said there were still discussions, but a new deadline was not provided “in order to allow the process to continue in an orderly manner,” Reuters reported.
In October, Barrick struck a framework agreement that was supposed to put the tax dispute to rest. The framework would guarantee Acacia’s pays the sum of $300 million to the government, a 16 percent stake hand over in its mines and the division of “economic benefits” from operations. Acacia, however, noted that any agreement would need to be reviewed by its board before any action can be taken.
“The company will continue to engage with Barrick to seek to understand Barrick’s expectations for the future conduct and a timetable for the completion of its discussions with the government on Tanzania,” Acacia said in a statement.
In recent times, African countries that play host to big mining companies want more earnings from the increase in commodities sales. Zambia, Africa’s second-biggest copper producer in the first quarter of the year, handed a $7.9 billion tax assessment letter to First Quantum Minerals Ltd. and said it is planning an audit of other miners in the country.
Also, Glencore’s Katanga Mining Ltd., the world’s biggest commodity trader, is having challenges with its host country, Democratic Republic of Congo (DRC), over a new mining code that dramatically boosts taxes. And it appears Mali too will join the trend, as the West African country says it will soon follow the footsteps of DRC.