MALI and Barrick Gold Corp.’s negotiations to end a protracted dispute over payments from the country’s biggest gold mine have been suspended, said Bloomberg News citing people familiar with the government’s position.
The West African country is locked in a battle with Barrick over Loulo-Gounkoto, a 700,000 ounce a year operation (2023 production), equal to about 14% of Barrick’s total annual production, and considered one of its tier one mines. According to Jefferies analysts have estimated that suspending production at the mine could cut Barrick’s earnings before interest, taxes and amortisation by 11% in 2025.
Barrick suspended the mine in January after Mali blocked exports and seized three tons worth of gold stocks. There were hopes of a resolution, however, when Mark Bristow, Barrick’s CEO told Bloomberg TV talks were underway but hadn’t gone as far as expected.
Mali is asking the Canadian miner for $197m one-time settlement payment, and for its adherence to a new mining code that came into force in 2023. Barrick is seeking a payment plan spread over a period of time.
Adopting the new mining law could give Mali larger stakes and royalties in Loulo-Gounkoto while potentially reducing the duration of the license for Barrick, based on its provisions.
If a deal is finalised, Mali could return the seized gold and release four Barrick employees detained since late November. It’s not clear how long the talks may be suspended and the situation could change at any time, said Bloomberg News.
The four Barrick staff were being held on accusations of money laundering and financing of terrorism, with the junta alleging $5.6bn in funds were moved out of the country without proper authorisation, said Bloomberg News. Barrick has said the allegations against its employees, as well as tax claims are “unfounded”.
Mali’s cash-strapped military leaders have upped the ante in recent months against foreign miners, demanding more in back taxes and dividends. Aside from detaining the four Barrick staff in November, the junta also issued an arrest warrant for Bristow.
Last year Resolute Mining CEO Terry Holohan was detained for a week in the capital, Bamako, and only released after the Australian company agreed to pay $160m to Mali and move to the new mining code. Holohan resigned earlier this month.
B2Gold Corp. and Allied Gold Corp. have also announced fresh agreements, which both involve settlement payments for their Fekola and Sadiola mines respectively, and expansion projects.
