Barrick Employees Detained in Mali Amid Rising Tensions in Mining Sector

Ongoing disputes between the Malian government and international mining companies are escalating, as Barrick Gold (NYSE:GOLD, TSX:ABX) has confirmed the arrest of four employees from its Loulo-Gounkoto mining complex.

On November 26, Barrick announced that the four employees had been detained again and are facing charges pending trial. The company vehemently denies these charges and is committed to working with the government to find a resolution that secures the long-term sustainability of its operations in Mali.

This incident is the latest in a series of confrontations related to Mali's lucrative gold mining sector.

The recent arrests follow the Malian government demanding US$162 million in back taxes from Resolute Mining (ASX:RSG, LSE:RSG) and detaining its CEO, Terence Holohan, along with two senior executives on November 8. These detentions were linked to a government-wide audit of the sector. Resolute Mining denied the allegations, stating it adhered to all official protocols during the audit. Ultimately, the company agreed to make the payments, and the executives were released on November 21.

As of November 28, Resolute has paid US$130 million to the government and plans to settle the remaining amount by the year’s end.

Conflict between Barrick and Malian authorities has persisted since late September when the same four employees were initially detained. On September 30, Barrick and the government reached a preliminary agreement aimed at establishing a framework to address disputes and to ensure a fairer distribution of the mining complex's benefits, which led to the employees' then-release.

However, on October 8, the government asserted that it required at least US$512 million from Barrick, claiming outstanding taxes and dividends. In addition, towards the end of October, the Malian government accused Barrick of violating commitments related to a revenue distribution agreement.

Barrick has countered these claims, emphasizing that it made an US$85 million payment to the government to address outstanding issues. Nevertheless, recent negotiations have stalled, leading to the latest detentions.

Mali's Government Restructuring Mining Agreements

Mali’s military-led government has been advocating for increased control over the mining sector since it revised its mining code after seizing power in a coup in 2020.

The new regulations require foreign mining companies to allocate a larger share of financial benefits to the state, which heavily depends on gold mining as a critical source of revenue.

The detentions of Barrick and Resolute employees reflect the government's shift in asserting its authority over the mining sector. Officials argue that greater mining revenue is vital for national development, yet this confrontational strategy raises concerns among international investors.

Resolute and Barrick are two of the largest mining companies operating in Mali, and their disputes with the government could have significant repercussions for the country’s mining sector, which constitutes a substantial portion of Mali's GDP and export revenue.

The increased tensions in this sector have led to instability, with industry experts warning that the government's approach may alienate foreign capital, impacting production levels and deterring future investment.

Barrick has pointed out its extensive 30-year history of collaboration with various Malian governments. Mark Bristow, the president and CEO, has called for ongoing discussions to resolve the current stalemate.
“While our efforts to reach a satisfactory resolution have not yet succeeded, we remain fully committed to engaging with the government to address all claims against the company and its staff and to ensure the prompt release of our unjustly detained colleagues,” Bristow remarked in a recent company update.

Keep up with real-time updates on this issue.

Mining, Mali, Barrick