- A Tanzanian subsidiary of Barrick Gold (TSX:ABX) had been losing up to US$31 million per year because of organized crime
- According to a report obtained by The Globe and Mail, the criminal activity involved mine staff and local police and centred on fuel, equipment and gold-bearing rock from the company’s North Mara gold mine, as well as fraudulent contracts and land compensation payments
- Barrick is a global leader in gold and copper production, developing a portfolio of high-margin, long-life assets
- Barrick Gold stock (TSX:ABX) is up by 0.28 per cent trading at $21.67 per share
A Tanzanian subsidiary of Barrick Gold (TSX:ABX) had been losing up to US$31 million per year because of organized crime.
According to a report obtained by The Globe and Mail, the criminal activity, which involved mine staff and local police, centred on fuel, equipment and gold-bearing rock from the company’s North Mara gold mine, as well as fraudulent contracts and land compensation payments.
Consulting firm Europe Conflict and Security Consulting prepared the report in November 2017 for a security contractor at Acacia Mining, the Barrick subsidiary that operated its gold mines in Tanzania at the time.
The report was cited in a legal case underway in London where Tanzanian villagers are accusing Barrick of cooperating with police who allegedly killed and injured local community members. Barrick denies the allegations.
Police violence at North Mara goes back more than a decade, with numerous reported deaths and injuries, and Barrick regularly enlisting police support to secure the perimeter of its mine, which it took control of in 2019 from Acacia after previously owning 64 per cent of the subsidiary.
While Barrick has blamed illegal miners for the violence on its North Mara property, the report estimates that related losses come to only US$200,000 per year. This pales in comparison to the up to US$2.5 million in gold-bearing rock lost per year to organized crime. The report states that as much as 250 kilograms of this material was being stolen every day from high-security areas in the mine.
The report further states that up to 30 per cent of mine staff could be implicated in the illegal activity, while political patronage seemed to offer the criminals safe harbour.
Losses since 2017 are unclear and have remained out of the public’s focus until now. Most recently, a Tanzanian government task force entered the North Mara mine in March 2023 to investigate potential illegal mining, with one suspect falling to his death after a failed escape.
In a statement from the ongoing legal case in London, Barrick acknowledged it was aware of potential organized crime in North Mara, had rotated police officers on duty to prevent collusion and had filed complaints with the regional police commissioner.
Local police continue to provide security at the North Mara mine to this day.
Barrick is a global leader in gold and copper production, developing a portfolio of high-margin, long-life assets.
Barrick Gold stock (TSX:ABX) is up by 0.28 per cent trading at $21.67 per share as of 9:55 am ET. The stock has added more than 50 per cent over the past five years.
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