Examining Barrick Gold’s Regulatory Risk In Developing Countries – by Trefis Team (Forbes Magazine – June 26, 2017)


Barrick Gold’s African operations are mired in uncertainty amid the Tanzanian government’s ban on the export of unprocessed mineral ores from the country. In addition, the Tanzanian government has alleged that Acacia Mining plc, the Barrick Gold subsidiary which operates the company’s mining interests in the country, has been evading taxes by understating the amount of gold concentrate that it exports.

While Barrick has not altered its production guidance for its African mining operations yet, per Acacia plc (in which Barrick holds a 63.9% stake) the mineral export ban is reportedly costing the company nearly $1 million per day in lost sales, as there isn’t enough gold smelting capacity within the country.

Barrick’s woes in Tanzania are the latest in a series of developments for mining companies in developing markets that have adversely affected the viability of their operations in these jurisdictions.

Barrick Gold’s troubles in Tanzania mirror those faced by Freeport-McMoRan and Newmont Mining in Indonesia. The Indonesian government introduced changes to its mining regulatory regime in 2014, which included a ban on the export of certain unprocessed minerals, including copper, from the country in order to foster the growth of mineral processing within the country.

While Freeport and Newmont were able to resume exports after a seven-month standoff with the Indonesian government, they did so under a changed regulatory environment which included higher export duties and time-bound commitments to set up smelting capacity within the country.

For the rest of this article: https://www.forbes.com/sites/greatspeculations/2017/06/26/examining-barrick-golds-regulatory-risk-in-developing-countries/#b07be1f3ba17