Acacia Shifts Blame to Barrick Gold for Tanzanian Tax Standoff
(Bloomberg) -- The head of Acacia Mining Plc is taking issue with comments made by the new chief executive officer of its parent company, Barrick Gold Corp.
On Wednesday, Barrick’s Mark Bristow expressed his frustration over the failure to resolve a serious tax dispute between the Tanzanian government and Acacia. “We are finding it difficult to get the Tanzanians and the Acacia board together,” Bristow said in an interview. “What we’re dealing with is a complete breakdown of relationships.”
But Acacia CEO Peter Geleta pushed back against the suggestion his company is responsible for the apparent standoff. “Sadly, blaming Acacia for that is totally unacceptable,” he said by phone Thursday. “It’s mesmerizing. Because we haven’t been involved.”
In 2017, Tanzania banned the export of unprocessed metals by miners, subsequently presenting London-based Acacia with a $190 billion tax bill, equivalent to two centuries of revenue.
Acacia was already in talks with the government when Barrick’s Executive Chairman John Thornton stepped in to handle the negotiations himself. From that point on, Acacia was excluded from discussions, Geleta said, a fact that “undermined Acacia’s status” in the country.
Under a framework agreement struck by Thornton, Acacia would pay $300 million to the government to settle tax claims and agree to split the returns from operations with the country going forward. In February, Bristow, said progress had been made to formalize that deal, sending the stock soaring. But on Wednesday, Bristow said talks had been “complex.”
Acacia says it has yet to receive a proposal from Barrick -- which its board would have to approve -- and is pointing the finger back at the Toronto-based miner, saying its involvement muddied the waters.
“Barrick’s intervention put both Acacia and Barrick into a difficult position and added a level of complexity that was unhelpful to an expedient resolution of the dispute,” Geleta said.
“These are the facts and one cannot deny this. We did not ask to be excluded from the talks but we’ve had to live with that and carry on focusing on what we can control.”
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