In This Article:
Barrick Gold Corp. says Mali has implemented more restrictions on its ability to export gold from its mining operations there as a dispute over how to share the benefits continues to deteriorate.
If the situation is not resolved within the coming week, the Toronto-headquartered miner said it will “temporarily suspend operations” at its Malian mine.
“Such an action would be deeply regrettable but necessary,” Barrick said in a press release on Monday.
The company’s stock declined by 2.23 per cent in early trading on Monday to $22.39.
Barrick has described its mining operations in Mali, known as the Loulo-Gounkoto complex and comprised of two separate permits, as a tier-one mine, its top classification for a mine based on gold production, costs and the size of the underlying reserves.
The mine has been in operation for decades, has produced more than 500,000 ounces of gold every year since 2010 and is projected to have produced between 630,000 ounces and 700,000 ounces of gold in 2024.
Barrick said it expected to produce between 3.9 million and 4.3 million ounces of gold in 2024, meaning Loulo-Gounkoto would account for roughly 16 per cent of its target.
But a dispute between Barrick and Mali over how to share the benefits of the mine erupted last year. Barrick owns 80 per cent of the complex, while Mali owns the remaining 20 per cent.
In July, chief executive Mark Bristow said in a press release that the political and economic climate — a military junta seized power in August 2020 — had caused other companies to curtail exploration, but not Barrick.
The Malian government, which in recent years has struck deals with the Russian government that have brought Russian soldiers to the country, has said Barrick owes it hundreds of millions of dollars in taxes.
Barrick in September said it had reached an agreement to settle its disputes with the Malian government. It did not disclose all the details, but in October it said it paid US$85 million to the government and that it would increase the state’s share of economic benefits from the mine.
That same month, Barrick said some of its employees were detained on what it later characterized as baseless tax and customs claims. It also said the Malian finance and mining ministries accused the company of breaching its commitments under an agreement “designed to achieve a more equitable distribution of mineral resource exploitation to the benefit of all stakeholders.”
The situation has further declined since then. In November, the Malian government arrested and detained four Barrick employees and issued an arrest warrant for Bristow. It has also arrested employees of other mining companies as the state seeks to overhaul its mining sector.