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Mali Seizes 3 Tons of Gold from Barrick: Unpacking the Mining Dispute and Its Consequences

Emilia Wright | January 16, 2025

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Why Mali Just Seized 3 Tons of Gold from Canadian Miner Barrick

Introduction

In a dramatic turn of events, the Canadian mining giant Barrick Gold Corp. has found itself embroiled in a bitter dispute with the government of Mali. This dispute has escalated to the point where Malian officials seized three tons of gold from the Loulo-Gounkoto mine, prompting Barrick to temporarily halt operations. The ongoing tensions arise from disagreements over ownership stakes under newly implemented mining codes and significant allegations surrounding tax liabilities.

The Dispute Over the Loulo-Gounkoto Mine

Since its inception in 2005, the Loulo-Gounkoto mine has been a profitable venture for Barrick Gold. The Malian government has held a 20% stake in the mine since opening, while the remaining 80% initially belonged to Rangold Resources Ltd., a London-listed entity. In 2018, Barrick acquired Rangold for $6.5 billion, taking full control of the mine. This acquisition has proven lucrative, as the Loulo-Gounkoto mine produced approximately 547,000 ounces of gold in 2023, contributing nearly 14% to Barrick’s overall global output that same year. Notably, the mine also plays a vital role in Mali’s economy, accounting for up to 10% of the nation’s gross domestic product.

Government Action and Legal Struggles

The current turmoil stems from the Malian government’s demand for a greater ownership stake in the mine, citing newly enacted mining codes. The military government, having seized power in a series of coups in 2020 and 2021, is also demanding that Barrick pay over $500 million in back taxes related to its operations in the country. Tensions culminated earlier this month when a judge in Mali ordered the seizure of gold, subsequently leading to $245 million in gold bullion being deposited into a state-owned bank’s vaults.

Escalating Tensions and Arrests

As this controversy unfolds, the situation has grown increasingly severe. In recent months, Malian authorities arrested four senior officials from Barrick, who remain in detention. The government has gone as far as issuing an arrest warrant for Barrick’s CEO, Mark Bristow, on charges of alleged money laundering. In response to these escalating charges, Barrick offered to pay $370 million in taxes and sought resolution through arbitration.

Industry Trends and Government Stance

Mali has a history of tightening its grip on foreign mining companies, particularly those from Western nations. In a similar case last year, the Malian government detained Resolute Mining Ltd. CEO Terry Holohan and two other employees until the company consented to pay $160 million to resolve a tax dispute. Other mining firms, such as Allied Gold Corp. and B2Gold Corp., have also faced government pressure and reached settlements regarding taxes and operational disputes.

Impact on Barrick Gold and the Mining Sector

The seizure of gold and the suspension of operations have wreaked havoc on Barrick’s share price, which has plummeted by over 25% as the company grapples with the fallout of this dispute. Barrick has maintained a stance of commitment to engaging with the Malian government and all stakeholders in search of an amicable solution that would ensure the long-term sustainability of the Loulo-Gounkoto complex.

Conclusion

The ongoing situation in Mali epitomizes the precarious relationship between mining companies and host governments, especially in nations recovering from political upheaval. As the Malian government consolidates power and seeks to exert greater control over its natural resources, companies like Barrick Gold face a challenging environment that could reshape the future of mining operations in the region. Stakeholders will be watching closely to see how this situation evolves and whether Barrick can successfully navigate the complex legal and economic landscape in Mali.