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Report: Barrick's Acacia Mining advances discussions with Tanzania over tax row

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Report: Barrick's Acacia Mining advances discussions with Tanzania over tax row

Barrick Gold Corp. and Tanzania have advanced in talks to settle a two-year-long tax row involving the African country and Barrick's 63.9%-owned Acacia Mining PLC unit, but it is premature to tell that a deal has been reached, Reuters reported Dec. 12, citing a person familiar with the matter.

The source told the news wire that the meeting, which included Tanzania government officials, Barrick, and Randgold Resources Ltd., which the Toronto-based miner is acquiring, "appears to have gone well," but with "nothing in writing."

A separate same-day report by Bloomberg News, however, reported that Barrick reached a deal with Tanzania on a US$300 million payment, which Acacia will make in installments.

The terms of the reported deal are under review by a Tanzanian tax working group while it remains unclear if the payment resolved outstanding tax issues. It will also require the approval of Acacia's board and shareholders, together with the endorsement of Tanzania President John Magufuli.

Acacia's operations in Tanzania was hit by a ban on exports of concentrates and ores for metals such as gold, copper, nickel and silver, enacted in early 2017. The country claimed in July 2017 that the Barrick unit owes about US$190 billion in unpaid taxes, plus interest and penalties, from its Bulyanhulu and Buzwagi gold mines.

The deepening strife between the miner and Tanzania was compounded by the arrest of two Acacia employees, with three subsidiaries charged with numerous offenses by the Tanzanian Prevention and Combating of Corruption Bureau, including breaches of the Tanzanian Anti-Money Laundering Act.

Previously, incoming Barrick CEO Mark Bristow said he wants the Tanzanian mining industry to unite to take on the country's stringent mining and tax laws that affected several companies, including Barrick's Acacia unit.