Why Tanzania deserves a bigger share in Barrick Gold deal

Dar es Salaam. Extractive industry stakeholders say Tanzania deserves a bigger stake than the 16 per cent shareholding it was given in the joint venture with Barrick Gold Corporation, namely Twiga Minerals Corporation (TMC).

Speaking during a Policy Forum Breakfast Debate themed Extractive Sector Reforms: What are the Recent Policy Changes - and Their Implications?, some stakeholders said establishing the Twiga Minerals Corporation - which takes over Acacia Mining operations in Tanzania - comes as a relief for a country that was getting nothing from its mineral resources. But the government deserved more shares, they stressed.

The analysis was undertaken by the Legal and Human Rights Centre (LHRC) in collaboration with the Lawyers’ Environmental Action Team (Leat).

The Leat executive director, Dr Rugemeleza Nshala, said the 16 per cent shareholding given to Tanzania is paltry. For one, the Tanzania government will not have decision-making power regarding TMC operations on the ground. Also, Tanzania does not have shares in the parent company Barrick Gold Corporation.

According to Nshala, Tanzania should focus on getting shares in the parent company - and shouldn’t be satisfied with the paltry shares in the subsidiary company.

He gave the example of Botswana which secured 15 per cent shareholding in the UK-based gold and diamond processing firm that was also compelled to shift its headquarters to Gaborone from London.

“As a result, 40 per cent of all the diamonds traded in the world is sold and bought in Botswana. Despite the reforms undertaken in Tanzania, the mining sector, including oil and gas, still face numerous challenges. A comprehensive dialogue is required to formulate functional regulatory frameworks that would be effective even after the present regime has completed its term in office,” he said.

Noting that a stronger negotiating team should be formed, he said “it should consist of competent and long-serving experts in various sectors. If experts are not found in the country, they should be recruited from abroad,” Dr Nshala said.

Another stakeholder, Ms Glory Mafole from the Christian Council of Tanzania (CCT), said by accepting 16 per cent shareholding in TMC, the country is not entitled to access important information and involvement in decision making.

“Lack of appropriate information has been the main problem for Tanzania. The weakness is exploited by multinational companies which declare loss to Tanzanian authorities , while declaring profits and dividends abroad,” she said.

‘HakiRasilimali’ coordinator Racheal Chagonja said negotiators should have bargained for 30 per cent shares in TMC - noting that failure to transfer the acquired shares in the announced setup will affect future investment.

Ms Martha Kamuzora of Equinor Tanzania said that, although the level of transparency has slightly risen, more has to be done to increase citizens awareness.

Announcing the TMC formation, Foreign Affairs and International Cooperation minister Palamagamba Kabudi said the company would operate the Buzwagi, Bulyanhulu and North Mara mines in north-western Tanzania.

He said the negotiated agreement will be reviewed by the Attorney General for approval on one hand and Barrick Gold board on the other.