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Barrick CEO Mark Bristow, seen here on Feb. 5, 2019, described the effort to reach agreement as a 'long safari,' referencing the Swahili word for journey.

Mike Hutchings/Reuters

Barrick has finalized an agreement to end an almost three-year dispute with the east African country of Tanzania that had sidelined a significant portion of its African gold production and cast a shadow on its share price.

On Friday, Mark Bristow, Barrick Gold Corp.’s chief executive, attended a public signing ceremony in Tanzania’s biggest city, Dar es Salaam, alongside Tanzanian President John Magufuli and Doto Biteko, Minister of Minerals. The event set in stone a preliminary agreement announced in October.

In a speech broadcast on Tanzanian television, Mr. Bristow described the effort to reach agreement as a "long safari,” referencing the Swahili word for journey.

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“Today we started a new partnership,” the South African-born Mr. Bristow said.

Later, he walked over to Mr. Magufuli and the two shook hands to public applause.

The gesture of friendliness seems to put an end to what has been a particularly bitter dispute between the world’s second-largest gold miner and one of the most impoverished countries on the planet.

In March, 2017, Tanzania prohibited Acacia Mining PLC (then a subsidiary of Barrick), of exporting any gold concentrate out of the country, in an apparent effort to prod the company to patronize the local smelting industry. A few months later, Tanzania accused Acacia of US$200-billion in tax fraud.

In the fall of 2017, Barrick, negotiating on Acacia’s behalf, offered massive concessions to Tanzania, through an agreement stickhandled by executive chairman John Thornton. But if anything, things only got worse after that. In 2018, a number of Acacia employees were charged with money-laundering offences and imprisoned without chance of bail. By the middle of last year, relations were so bad that Tanzania said it wouldn’t sign any pact as long as Acacia remained as a counterparty. Backed into a corner, Barrick was forced to buy back the chunk of Acacia it didn’t already own for US$428-million last summer.

The gambit worked. In October, Barrick announced that Tanzania had agreed to essentially the same agreement earlier negotiated by Mr. Thornton; Tanzania would receive a 16-per-cent share in the mines, be entitled to 50 per cent of the profits from now on, and receive a $300-million fine from Barrick.

That deal was expected to be done and dusted by the end of last year, but it too dragged on.

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“Although it’s unclear what caused the delay, we are pleased to see this deal finalized, so Barrick can focus on optimizing the operations in Tanzania,” Tanya Jakusconek, analyst with Scotia Capital, wrote in a note to clients.

With the export ban coming off, Barrick’s mines in Tanzania can finally resume full operations.

Still, nobody is quite sure how committed Barrick is to keeping the assets over the longer term.

A decade ago, Barrick tried to get out of Tanzania entirely, first by spinning off a minority share in the assets in 2010 through the IPO of Acacia. Barrick later tried to sell its remaining stake in Acacia on various occasions, but couldn’t get a deal done. Through the years various parties, from Chinese state-owned entities to Britain’s Endeavour Mining Corp., have come close but ultimately walked away. An unknown is whether those same potential buyers might still be interested in the former Acacia assets now that Tanzania has eaten away at the economics for any future owner.

For now, Barrick appears to be committed to staying put. On Friday, the company said it intends to spend US$50-million on exploration in Tanzania this year, and up to US$40-million upgrading road and housing infrastructure.

Shares in Barrick closed up 1.5 per cent to $24.60 apiece on the Toronto Stock Exchange on Friday.

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