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Wednesday, Feb 12, 2025
Mugglehead Investment Magazine
Alternative investment news based in Vancouver, B.C.

Gold

Government of Mali seizes gold stocks from Barrick Gold

The Malian state has clashed with Barrick Gold over the underground and open-pit Loulo-Gounkoto site in the west

Government of Mali seizes gold stocks from Barrick Gold
Barrick’s Loulo-Gounkoto gold mining complex. Image via Barrick Gold.

The situation between the Government of Mali and Canadian gold miner came to a head on Monday as the government started seizing gold stock at Barrick Gold Corp’s (TSX: ABX) (NYSE: GOLD) Loulo-Gounkoto site.

Since seizing power in a 2020 coup, Mali’s military rulers have pledged to ensure a fairer distribution of revenue from the country’s lucrative mining industry and have intensified pressure on foreign firms in recent months.

The Malian state has clashed with Barrick Gold over the underground and open-pit Loulo-Gounkoto site in the west, one of the world’s largest gold complexes.

The Canadian miner laid out the circumstances in a letter to Malian staff, warning them of pending suspension of operations at the complex.

Two Barrick employees in Mali and a consultant for mining companies confirmed the letter’s authenticity. While Barrick has not disclosed the volume of gold at risk, one employee, citing internal estimates, stated that Loulo-Gounkoto’s stock is approximately 4 metric tons, valued at nearly USD$380 million based on Monday’s spot gold prices.

Barrick responded to a request for comment by stating it had nothing to add beyond its January 6 statement. In that statement, the world’s second-largest gold miner by volume warned it would temporarily suspend operations at Loulo-Gounkoto if restrictions on gold shipments were not lifted within the week.

The threat remains active. In Sunday’s note to staff, Barrick warned it might proceed with the suspension “if the situation is not resolved quickly.”

Read more: Calibre Mining beats gold guidance for 2024 in Nevada and Nicaragua

Read more: High grades in Nicaragua expected to raise Calibre Mining’s mineral resource

Dispute comes during a sensitive time for Western miners

Barrick Gold is the world’s second-largest gold producer. It faces significant challenges in Mali due to government-imposed restrictions on gold exports.

Mali, Africa’s second-largest gold producer, has escalated tensions by issuing an arrest warrant for Barrick Chief Executive Mark Bristow and detaining members of Barrick’s staff.

Industry insiders note that the dispute arises at a sensitive time for many Western miners operating in West Africa. In Burkina Faso and Niger, military governments are following Mali’s lead, revising mining agreements to extract greater financial benefits from foreign operators.

This regional trend reflects a broader push by West African countries to assert control over resource wealth amidst shifting geopolitical alliances. Furthermore, companies like Endeavour Mining (TSE: EDV) and IAMGOLD Corp (TSE: IMG) (NYSE: IAG) have also faced increased scrutiny and renegotiations.

Endeavour Mining has encountered challenges in Burkina Faso, where the government seeks a larger stake in gold revenues. IAMGOLD, which operates in Burkina Faso and other regions, has experienced disruptions tied to political instability and demands for more favorable terms for local stakeholders. These developments highlight the rising resource nationalism across West Africa, forcing miners to navigate uncertain regulatory environments and evolving political dynamics.

 

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