CAPE TOWN, SOUTH AFRICA – Accused of tax evasion and excessive profits in an impoverished African region, a Canadian-owned mining company is trying to patch up its tense relationship with the Tanzanian government by paying taxes ahead of schedule and spending $2-million (U.S.) on advertising to showcase its investments.
Acacia Mining, a subsidiary of Toronto-based Barrick Gold Corp., has faced a growing barrage of verbal attacks from political leaders and media commentators in Tanzania, where it owns three gold mines. And on some issues, the company acknowledges that its critics may have a valid point.
“Governments, probably rightly, don’t think they’re getting a fair share of the wealth,” Acacia chief executive Brad Gordon said in an interview on Monday. “So we need to get smarter about how that wealth is distributed. I just think we need to look at the distribution of that wealth and how taxes are paid.”
Under agreements signed when Acacia’s predecessors first entered the country, the company was able to pay no corporate taxes in Tanzania for a 15-year period. It seemed like a good deal at the time, but now the company faces a backlash – part of the increasingly fraught relationship between African governments and the mining industry.
“There’s just no trust,” Mr. Gordon said in an interview. “They talk about the billions of dollars that have been ripped out of the continent over a long, long time.” Asked whether the growing criticism of the industry is due to a perception problem or a justice problem, he answered: “A bit of both.”
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