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Barrick pays Tanzania US$100 million first tranche of the US$300 million

Barrick Gold Corporation has paid US$100 million, the first tranche of the US$300 million settlement the Canadian mining firm agreed with Tanzania to resolve the disputes it inherited from Acacia Mining.

The upfront payment cheque was received on Tuesday by Finance and Planning Minister, Dr Philip Mpango from Mr Hilaire Diarra, the Barrick Gold Corporation, country Manager.

Dr Mpango said the parties had also agreed on the payment schedule for the remaining US$200 million balance.

According to the schedule, the initial payment will be followed by five annual payments of US$40 million each.

“On behalf of the government, let me express our appreciation to Barrick’s goodwill gesture and commitment to the new direction in the Tanzania mining industry, which has been agreed on by both parties for mutual benefits,” said Dr Mpango.

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The payment, he noted, was an implementation of the Framework Agreement between the government and Barrick Gold Corporation which was officially signed in January this year after nego- tiations between the two parties were concluded.

In terms of its framework agreement with the government, the shipping of some 1,600 containers of concentrate stockpiled from Bulyanhulu and Buzwagi resumed in April and the first US$100 million received from the sale had gone to the government.

Barrick said all material issues had been dealt with or were being finalised.

This initial payment will be followed by five annual payments of US$40 million each.

Dr Mpango was quick to note that the US$100 million was outside the 50/50 principle economic benefits from Bulyanhulu, Buzwagi and North Mara mines economic benefit distribution between the two parties.

The finance minister said moreover that Barrick had committed to issue US$5 million to support a feasibility study for construction of an in-country mineral concentrate beneficiation facility (smelter).

Others are establishment of a partnership with University of Dar es Salaam of US$10 million over a ten year period for training relevant staff for the mining industry.

On top of that, Barrick will inject US$40 million to upgrade the road between Bulyanhulu and Mwanza and construct a housing compound and related infrastructure.

At the same time, some 90 percent of the outstanding land claims at North Mara have been settled with a payment scheduled to start today.

Contrary to the past, where these claims were handled by the mine, the compensation process is being overseen by a committee representing Twiga, the government, the local authorities and the affected communities.

The minister stressed the need for both parties to fulfill all other commitments, expressing the government’s commitment for the cause, citing a recent release of the 277 containers of mineral concentrate, among other things.

Dr Mpango wanted other players in the mining industry to borrow a leaf from Barrick by committing to a new direction of ensuring a win-win situation in mining operations.

“Let me declare that the government is committed to a new win-win partnership, given our vast untapped mineral resources, and these well-timed funds will be used to better the lives of all Tanzanians” said the finance minister.

On his part, Barrick Gold Corporation President and Chief Executive Officer (CEO), Mr Mark Bristow, said these were landmark events that demonstrated the strength of the partnership the company forged earlier this year through the formation of the jointly owned Twiga Minerals Corporation, which oversees the management of Barrick’s operations in the country.

Mr Willem Jacobs, Barrick’s Chief Operating Officer for Africa and the Middle East, said the basis of the settlement, which also provides for future claims, was produced during several weeks of close and constructive engagement between Twiga, the Ministry of Minerals, the Ministry of Lands, the local authorities and the community.

A commercial bank has been appointed to provide financial training to the compensated land owners.

Operationally, since taking over North Mara, Barrick has focused on improving the mine’s water management with special emphasis on its tailings storage facility.

Mr Jacobs said Barrick’s intervention had put an end to 15 years of poor water management on site and has ensured that going forward its environmental risks are properly contained in line with the group’s best practice standards.

On January 24, this year, the government and Barrick inked a historic mining deal after signing an agreement that redefined how the global leading gold miner will operate in the country.

The two signed nine sets of agreements that shifts Barrick operations in the country among others, gives the state a 16 percent holding in the three operating gold mines.