Barrick Gold (NYSE:GOLD)(TSX:ABX) followed through on Tuesday with a warning of suspending operations at its Loulo-Gounkoto complex in Mali after the military-led government seized gold stocks from the facility over the weekend, valued at around $245 million.
The Canadian mining giant described the decision as “regrettable” but necessary, emphasizing its commitment to resolving the dispute.
“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,” it said in the statement.
The Toronto-based miner did not say what amount of gold had been seized and flown out by helicopter to the state-owned Banque Malienne de Solidarité (BMS) in the capital Bamako.
The suspension follows months of escalating tensions between Barrick and the Malian government over the division of economic benefits from the Loulo-Gounkoto complex, which produced nearly 700,000 ounces of gold in 2023. Since early December, gold shipments from the site have been restricted, compounding operational challenges.
“The inability to ship gold not only affects operations but has broader implications for the local economy, the 8,000 employees, and the many local service providers,” chief executive Mark Bristow said earlier this week.
Barrick initiated arbitration proceedings in December through the International Centre for the Settlement of Investment Disputes (ICSID) while simultaneously pursuing negotiations to establish a new memorandum of agreement with the Malian government. The proposed document seeks to resolve disputes, redefine their partnership, and increase Mali’s share of the complex’s economic benefits.
The situation has been further complicated by the continued detention of several of Barrick’s Malian employees on what the company describes as “unfounded charges.”
Shaky ground
The suspension of all activities at Loulo-Gounkoto and the tense standoff with authorities come at a critical time for Mali’s mining industry. As the country navigates the complexities of political instability and a revamped regulatory framework, the fate of one of its most significant economic drivers hangs in the balance.
Barrick’s Loulo-Gounkoto complex, developed during Bristow’s tenure as CEO of Randgold before its acquisition by Barrick in 2018, is a cornerstone of Mali’s economy. Over the past 29 years, the company has invested more than $10 billion in the country, contributing between 5% and 10% of Mali’s GDP annually. Last year alone, Barrick injected over $1 billion into the local economy.
The mine complex is also one of Mali’s largest taxpayers and employers, with 97% of its 8,000-strong workforce being Malian nationals. According to Barrick, more than 70% of the economic benefits from the complex have gone directly to the Malian state.
More to come…
Source: MINING.COM – Read More
