Mark Bristow, CEO of Canadian-based Barrick Gold Corporation (TSE: ABX) (NYSE: GOLD), said on Tuesday that he is confident that Barrick will have the ongoing dispute with Mali complete by the end of the year.
Talks between Barrick and authorities in Mali on implementation of new mining rules governing its Loulo-Gounkoto mining complex have been going on for months.
Mali has accused Barrick of neglecting financial obligations, including unpaid taxes and dividends. The country is attempting to recover substantial sums from mining companies, with claims against Barrick reaching up to USD$512 million.
The new 2023 mining code increases state ownership in new mining projects to 35 per cent. Barrick argues that it shouldn’t apply retroactively to existing operations like Loulo-Gounkoto, where Mali presently holds a 20 per cent stake.
Additionally, the Malian government alleges that Barrick failed to meet commitments related to environmental practices and corporate social responsibility. These were established in an earlier agreement to resolve previous disputes.
The government, led by a military junta since a 2021 coup, has also intensified its control over the mining sector, conducting audits that Barrick contests, calling them “legally and factually flawed.”
Bristow said that Barrick had offered Mali 55 per cent of the economic benefits from the Loulo-Gounkoto operation, in a deal similar to an agreement the company reached with Tanzania about five years ago. The CEO did not comment on Mali’s cash demands or allegations of unpaid back taxes and fines.
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Barrick denies all wrongdoing and discussions continue
In late September 2024, Malian authorities briefly detained four senior Malian employees of Barrick on charges related to financial crimes, intensifying the conflict.
Negotiations have continued despite these tensions. Barrick made an USD$85 million payment in early October 2024 as part of efforts to resolve the issues. While Barrick has publicly denied any wrongdoing, it is still trying to reach a mutually acceptable solution and is working toward a memorandum of agreement to settle differences and outline future cooperation.
“We are prepared to give them more of the economic benefits,” Bristow said.
“The key is you don’t want to damage the long lasting value of the asset. The biggest sufferer will be the country, and any increase in basic cost has an impact on how long the projects will run.”
This dispute could impact Barrick’s operations in Mali, a key source of revenue for the company.
Increased government control and uncertainty around license renewals may affect future profitability and operations. Mali’s push for higher revenue from mining aligns with a broader trend of resource nationalism in Africa, where governments seek a greater share of benefits from natural resources.
However, Mali risks deterring further foreign investment if it appears overly aggressive or unstable. Adding to the complexity, shifting geopolitical alliances and increased Russian influence in Mali create additional challenges for Barrick’s operations.
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