Currently viewing Global edition

Barrick Gold Tanzania JV draws curtain on Acacia Mining

A joint venture between Barrick Gold and the Tanzanian government will tidy up the loose ends left by Barrick's acquisition of Acacia Mining last year, while plotting a path forward for the North Mara, Bulyanhulu and Buzwagi mines, including funding for local training and infrastructure.
Barrick Gold Tanzania JV draws curtain on Acacia Mining Barrick Gold Tanzania JV draws curtain on Acacia Mining Barrick Gold Tanzania JV draws curtain on Acacia Mining Barrick Gold Tanzania JV draws curtain on Acacia Mining Barrick Gold Tanzania JV draws curtain on Acacia Mining

Barrick Gold took over several operations from Acacia Mining, including North Mara. These will now be part of the new JV with the Tanzania Government

Twiga Minerals Corporation, the joint venture, will oversee management of Barrick's local operations in Tanzania, which are owned 84% by Barrick and 16% by the government.

The deal shares the ‘economic benefits' generated by mining 50/50, after Barrick has recouped its capital investments. It also has ESG elements, with Barrick committed to provide up to US$10 million over a 10-year period for training and skills relevant to the mining industry, through a partnership with the University of Dar es Salaam.

The company will provide up to $40 million to upgrade the road between Bulyanhulu and Mwanza, and build a housing compound and related infrastructure.

Barrick added that the company was recruiting and training Tanzanian nationals to replace its expatriate employees in Tanzania, as it has done at some of its other Africa operations. Acacia's former offices outside the country have been closed and management of the mines has been moved back to Tanzania.

"Since taking over the operatorship, we have been engaging with local communities to restore the mines' social licence to operate and we are cooperating closely with the authorities to address the environmental issues at North Mara," said Barrick CEO Mark Bristow.

"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."

ESG was recently highlighted in a report by consultancy Ergon Zehnder, which argued that even the best companies in the mining sector could still do more to incentivise ESG-led culture change throughout their organisations, including by making board changes. 

Bristow also said rationalisation and optimisation at North Mara had already reduced costs and increased cashflow. The company is now planning to do the same at Bulyanhulu, where mining is due to resume later this year after an optimisation study is completed.

Relations between the Tanzanian government and foreign miners are not always so smooth, as Acacia found out in 2018 when it lost its retention licence, along with several other companies including Australia-based minnow Indiana Resources. The Australian company is suing the government over the dispute.

Barrick posted strong Q4 2019 results in January.

New York-listed (NYSE: GOLD) Barrick Gold shares were trading at US$18.58 on Friday. The share price has been broadly between $16-18 since July. The company's market capitalisation is $33.01 billion.