Junta-led governments in the Sahel region are tightening controls in their mining sectors, seeking to upend what they call traditional exploitation by foreign firms.
But that has created uncertainty for foreign companies in the region.
Canadian miner Barrick Gold Corporation indicated that some three tonnes of its gold valued at about $250 million, which was due for exportation, had been confiscated in Mali. The firm said on Monday it was suspending operations at the main mining site in the West African country.
Barrick has had a protracted dispute with the Asimi Goita-led junta, highlighting the intensity of the issue. It stemmed from the introduction of a new mining code in 2023, which allowed the State to take up to 30 percent of shares in new ventures. It also abolished tax exemptions for companies, among other things.
The Canadian giant had similar problems in Tanzania, where it was pinned down and finally agreed to pay up to $300 million worth of tax dues and other claims. And, although the firm rejected accusations of causing deaths and injuries in a mine in North Mara region, the case was settled in an arrangement with the government of Tanzania, which later enabled the firm to resume exports of gold concentrates.
Barrick’s problems in Mali are a result of pressure on the junta to fulfil a promise it made when it took power in 2021 to ensure a fairer revenue distribution from the mining sector, which has historically been dominated by foreign interests.
Similar policies are being implemented by Mali’s other two neighbours under military rule, Burkina Faso and Niger, which are also grappling with insecurity that is adversely impacting their economies.
The three countries have fallen out with former colonial master France, over its influence on the region’s politics and resources. This situation has occasioned a Cold War-like scenario in the Sahel, as the countries lean towards Russia.
Consequently, Western firms have increasingly become the target of the juntas’ nationalisation policies.
In Burkina Faso, for instance, Ibrahim Traore has reportedly threatened to revoke permits of mining companies with headquarters in countries that do not supply his country military equipment.
The Nigerien junta announced in December that it had seized the 63 percent French owned uranium mine, Somair.
But it is Mali where much of the attention is focused, for obvious reasons. Ranked Africa’s second-largest gold producer in 2023, the landlocked country of about 24 million people is one of the poorest in the world, according to the UN.
From left: Mali’s Assimi Goita, Niger’s Abdourahamane Tiani and Burkina Faso’s Ibrahim Traore at the summit of heads of state and governments of the Alliance of Sahel States in Niamey, Niger on July 6, 2024.
Photo credit: Reuters
Data from the Extractive Industry Transparency Initiative (Eiti), an international regulatory agency for the mineral sector, indicates that Mali’s extractive sector accounted for 23 percent of government revenues and nearly 9.2 percent of the country’s GDP in 2021.
Gold constitutes the majority of this, contributing a quarter of the national budget and three-quarters of export earnings, according to other sources.
In line with the 2023 mining sector reforms, the junta issued a series of decrees in December, increasing the State’s stake in various gold and lithium mining ventures.
Some companies, such as the Canada-registered B2Gold, signed new agreements with the government, in line with the new code. Others considered exiting include Robex Resources – another Canadian firm – which said in September that it was looking to sell its Nampala mine.
Reports indicate that Mali received over $635 million in additional tax payments from various companies, both in cash and promise, after the review.
The failure of other companies to embrace the new laws resulted in the arrest of several mining executives and employees between September and December 2024.
In November, three expatriate executives of Australian firm Resolute Mining, which operates the Syama gold mine in southwestern Mali, were detained for questioning. Among them was the company’s CEO Terry Holohan. The company reportedly made a payment of $160 million to secure their release.
Earlier in September, four employees of Barrick were detained for several days before being released. But the company in a statement on January 6, 2025, said four of its local staffers were still in detention. And in early December, its South African chief executive, Mark Bristow, had a warrant of arrest issued against him, accused of money laundering.
Mark Bristow, the South African CEO of Barrick Gold. He had an arrest warrant issued against him in Mali, accused of money laundering.
Photo credit: File | Reuters
The government claims that Barrick owes the State up to $500 million, which the company denies.
Barrick, ranked as the world’s second-largest gold producer, and which has been operating in Mali for about three decades, owns 80 percent share of the Loulo-Gounkoto gold mine, with the remaining 20 percent going to the State.
Loulo-Gounkoto, situated in the western part of Mali, is the largest gold mine in the country. Data shared by Barrick in July indicated that it contributed $1 billion to the country’s economy over the previous 12 months.
The junta hopes to see an increase in the State’s revenue from the sector with the new mining code, which crucially ties certain royalties to the price of the commodity.
Analysts say Barrick’s adoption of the code could significantly boost this stake. But they also warn that an escalation of the situation could impact firms seeking financing and insurance.
Initially, Barrick was reluctant to comply with the new code. But, in a statement issued in September, it announced that it had reached a “comprehensive resolution” with the authorities to settle differences.
But an October statement from the authorities accused the company of failing to honour its commitments. That statement, from the ministries of Mines and Finance, highlighted several alleged breaches, notably “social and environmental responsibilities and foreign exchange regulations.”
Barrick rejected the accusations, insisting that it had met its obligations. The company noted that in early October it made a payment of $82.5 million to the government as part of the ongoing negotiations. The statement from the company also mentioned that it was considering an increase in the State’s share of the economic benefits generated by the Loulo-Gounkoto mining complex.
Amid the tension created by the disagreement, the company was barred from exporting its gold, although it continues to mine. But, in addition, the authorities reportedly issued an interim order against the existing gold stock at Loulo-Gounkoto, which the company says implies the potential confiscation of gold stocks, estimated to be around four metric tonnes.
But in its latest statement on January 6, while expressing commitment to ongoing “dialogue” to find a “mutually acceptable resolution,” Barrick warned that it could be forced to suspend operation if there was no progress in the talks.
Barrick says it has an estimated 8,000 employees, excluding many local service providers it works with.
“Barrick remains committed to constructive engagement with the Government of Mali to resolve the existing disputes amicably,” Mr Bristow was quoted in the statement, which reaffirmed the company’s reliance on the arbitration process it is seeking at the International Centre for the Settlement of Investment Disputes “as a recognised mechanism to address these matters of disagreement while maintaining the integrity of existing agreements.”
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