MW Why Mali just seized 3 tons of gold from Canadian miner Barrick

By Lukas I. Alpert

An ongoing dispute over ownership stakes in Barrick's operation in Mali has led to the arrest of mining officials, the government's gold seizure and the company's shutdown of its mine

For years, Canadian mining giant Barrick Gold Corp. has seen its acquisition of a major gold mine in the West African nation of Mali pay off big time.

But now, it's become a big-time headache.

Earlier this week, Malian officials seized three tons of gold from the Loulo-Gounkoto mine as part of an ongoing dispute over how much of an ownership stake the military government will have going forward. That led Barrick to temporarily suspend all operations at the mine.

Barrick $(GOLD)$ has seen its shares tumble more than 25% as the dispute has played out, with the Malian government pressing mining firms to renegotiate their contracts under newly passed mining codes in the country.

"Barrick remains committed to constructive engagement with the Malian government and all stakeholders to find an amicable solution that ensures the long-term sustainability of the Loulo-Gounkoto mining complex and its vital contribution to Mali's economy and communities," the company said in a statement on Tuesday.

The dispute is centered on exactly how much of a stake in the mine the government owns under the new laws. Since the mine - which is situated on the far-western edge of Mali, near its border with Senegal - opened in 2005, the government has owned a 20% stake in the business.

The remaining 80% initially belonged to London-listed Rangold Resources Ltd. In 2018, Barrick acquired Rangold for $6.5 billion and took over control of the Loulo-Gounkoto mine. Since then, the mine has served as one of Barrick's biggest operations in the world, producing 547,000 ounces of gold (GC00) in 2023, or nearly 14% of its total global output that year.

Barrick has said that its mining operations in the country provide up to 10% of Maili's gross domestic product.

Mali - whose government was toppled in a series of military coups in 2020 and 2021 - has argued that under the new codes, it is entitled to more. The new government says that Barrick owes more than $500 million in back taxes, and earlier this month, a judge in Mali ordered the seizure of the gold. On Monday, $245 million in bullion was moved into the vaults of a state-owned bank.

The seizure and closing of the mine follows months of escalating tensions, with the Malian government late last year arresting four senior Barrick executives, who remain in custody. In December, Mali issued an arrest warrant for Barrick Chief Executive Mark Bristow on charges of alleged money laundering.

Barrick has offered to pay $370 million and has sought to have the matter resolved in an arbitration court.

Mali has similarly squeezed other Western mining companies in recent years under similar pretenses. In November, the government detained Resolute Mining Ltd. (AU:RSG) (UK:RSG) CEO Terry Holohan and two other employees for weeks before the company agreed to pay $160 million to settle a tax dispute.

Other companies such as Allied Gold Corp. (CA:AAUC) and B2Gold Corp. (CA:BTO) $(BTG.SI)$ have also reached deals with the government to pay more.

-Lukas I. Alpert

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January 15, 2025 14:15 ET (19:15 GMT)

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