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Barrick Gold (NYSE:GOLD)(TSX:ABX), the world’s second-largest gold miner, has issued a stark warning: it will suspend operations in Mali if shipments of gold remain blocked and disputes with the government over a new mining code remain unresolved.
The Canadian mining giant has been embroiled for months in a dispute with the government over the division of economic benefits from the Loulo-Gounkoto complex, which produced nearly 700,000 ounces of gold last year.
Barrick reported on Monday “a significant deterioration” in conditions at Loulo-Gounkoto, including the imprisonment of employees without cause and the obstruction of bullion shipments.
“If shipments remain suspended, Barrick will be compelled to halt operations, further impacting the viability of this critical economic driver for Mali,” the company said in a statement.
Mali, Africa’s second-largest gold producer, has been under military rule since 2021, following the country’s third coup in less than ten years. The junta has prioritized restructuring the mining industry, rolling out a new mining code, and conducting audits of operations. These changes have led to tense negotiations with foreign operators like Barrick, particularly over tax disputes and the terms of new agreements.
Arrests of staff from Australia’s Resolute Mining (ASX: RSG) and Barrick by military authorities have gathered pace since September. The situation escalated further last week when Malian authorities issued an arrest warrant for Barrick CEO Mark Bristow, citing tax disputes.
Bristow, a veteran with nearly three decades of experience in navigating Africa’s challenging political landscapes, voiced concerns that these developments are eroding investor confidence and will deter future investments in Mali’s mining sector.
The blockade of gold shipments and the tense standoff with authorities come at a critical time for Mali’s mining industry. As the country navigates the complexities of political instability and a revamped regulatory framework, the fate of one of its most significant economic drivers hangs in the balance.
Barrick’s Loulo-Gounkoto complex, developed during Bristow’s tenure as CEO of Randgold before its acquisition by Barrick in 2018, is a cornerstone of Mali’s economy. Over the past 29 years, the company has invested more than $10 billion in the country, contributing between 5% and 10% of Mali’s GDP annually. Last year alone, Barrick injected over $1 billion into the local economy.
The mine complex is also one of Mali’s largest taxpayers and employers, with 97% of its 8,000-strong workforce being Malian nationals. According to Barrick, more than 70% of the economic benefits from the complex have gone directly to the Malian state.
Despite the challenges, Bristow emphasized his company’s long-standing commitment to Mali and its people, expressing a willingness to engage in constructive dialogue with the government. He urged for negotiations that respect existing agreements and prioritize the sustainability of Mali’s mining sector.
2 Comments
Almounchar Maiga
Let’s find solution for this issues once and for all
Lovet Fon
More than 70% income benefit is nothing, a company is supposed to pay the workers. The government like any other government in the West wants the company to pay taxes and share profit as well. Old agreements drawn decades ago means nothing at the moment when gold prices are sky rocketing. The time of exploiting the minds of Africans is gradually coming to an end. The government should use national security as a means to send them parking to Canada. The age of our elders is coming to an end and the new generation don’t give a shit if you are a white person or not. We expect fare treatment and respect both ways. The era of shipping raw material from Africa is also coming to an end. In other to sustain our growing population, Africa would need to transform its raw materials to semi or finished products thereby giving jobs to the youths who demands it. The era where our governments prioritized growing cash crops over food production gradually coming to an end, Africa needs to priortize mechanized farming over growing cocoa beans or coffee beans for the West enjoyment or these beans would have to be processed before any shipment be done.