Barrick Employees Detained in Mali as Mining Sector Tensions Escalate

The ongoing tensions between the Malian government and international mining companies have escalated, with Barrick Gold (NYSE:GOLD, TSX:ABX) recently confirming the arrest of four Malian employees from its Loulo-Gounkoto mining complex.

Barrick announced on November 26 that these employees had been detained again and charged as they await trial. The company strongly disputes these charges and emphasizes its commitment to engage with the government in finding a resolution that is essential for the long-term sustainability of its operations in Mali.

This incident is the latest in a series of disputes focused on the country's valuable gold mining sector.

The recent arrests follow Mali's demand for $162 million in back taxes from Resolute Mining (ASX:RSG, LSE:RSG) and the detention of its CEO, Terence Holohan, along with two senior executives on November 8. These detentions were part of a government audit of the sector. Resolute Mining denied the government's claims, asserting that it had complied with all official requirements during the audit. Nevertheless, after negotiations, the company agreed to pay the owed taxes, leading to the release of the detained executives on November 21.

As of November 28, Resolute Mining has paid $130 million to the government and intends to settle the remaining amount by the end of the year.

The conflict involving Barrick and the Malian authorities has been ongoing since late September when the same four employees were first detained. Following this initial detention, Barrick and the government reached a preliminary agreement on September 30 aimed at establishing a framework for resolving disputes and increasing the state’s share of benefits from the Loulo-Gounkoto mining complex, which led to the employees' temporary release.

However, on October 8, the Malian government demanded at least $512 million from Barrick, citing unpaid taxes and dividends. In late October, the government accused Barrick of violating commitments under an agreement intended to ensure a fairer distribution of mining revenues. Barrick countered these allegations, highlighting that it had made a payment of $85 million to the government as part of ongoing efforts to resolve outstanding issues.

Despite these negotiations, discussions have recently stalled, leading to the renewed detentions of Barrick employees.

Mali Government's Push for Restructured Mining Agreements

Mali’s military-led government has sought greater control over the mining sector following its coup in 2020 and subsequent revisions to the mining code. The new regulations mandate that foreign companies grant a larger share of financial benefits to the state, which heavily relies on gold mining for its revenue.

The arrest of employees from both Barrick and Resolute reflects the government’s assertive approach in exercising authority over the mining sector. Officials have stated that increased revenue from mining is crucial for national development. However, many international investors are concerned about this confrontational stance.

Both Resolute and Barrick are leading mining operators in Mali, and conflicts with the government could significantly impact the mining sector, which contributes a large portion of the country's GDP and export earnings.

The growing tensions are causing instability in the mining environment, and industry experts warn that the government’s recent actions may discourage foreign investment, negatively influencing production levels and future capital influx.

Barrick has pointed out its long-standing cooperative relationship with various Malian governments over the past 30 years. In a recent address, company president and CEO Mark Bristow emphasized the importance of continuous dialogue to resolve the dispute. “Although our attempts to reach a mutually agreeable solution have yet to be fruitful, we are committed to working with the government to address all claims against the company and its employees and to secure the immediate release of our wrongfully detained colleagues,” Bristow stated.

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Mali, Mining, Barrick