- Some mining investors are criticizing Barrick Gold (ABX -0.8%) for the heavy price the miner paid - including a 16% stake in each of its three mines in the country and $300M in cash from its Acacia Mining unit - in the proposed settlement of a dispute with the Tanzanian government.
- Several institutional shareholders are saying that by agreeing to hand Tanzania 50% of the "economic benefits" from the three gold mines, ABX may have set an expensive precedent for what governments could demand from global mining companies, possibly slowing mine development.
- “The 50 per cent is not a good precedent by any means for a very risky business,” says Chris Mancini, an analyst at Gabelli Gold Fund, which owns ABX shares. “They are disincentivising development... They are imperiling the industry."
- ABX is “showing a willingness to cave to ridiculous demands,” says one unidentified ABX shareholder.
- Now read: Sentiment Speaks: Miners Could Be Setting Up For A Big Hit Into Year End
Original article