Thursday, 24th August 2006 (2447 views)

The Tanzanian government has announced the agreement of a new mining contract with Barrick Gold.

The move comes after nearly two months of negotiations between the Canadian company's Tanzanian division and the Ministry of Energy and Minerals. The government in Tanzania is in the process of renegotiating all gold-mining contracts within the country after the recent growth in the industry.

Barrick will have to pay $6.76 million a year to the government until it starts making profits, at which time they will be obliged to pay corporation tax.

In addition to this, Barrick will fully comply with government initiatives aimed at improving working and living conditions for the country's small-scale miners. The company has also agreed to the government's stipulation that all outsourcing contracts and work will be undertaken by local companies.

In return, the two parties have agreed to abolish a clause which made payment of 15 per cent additional capital allowance on unredeemed capital expenditure obligatory.

Barrick owns the Bulyanhulu mine and has shares in two other projects located in Tanzania.

 

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