In a startling development, Mali’s military has initiated the seizure of gold from a mine operated by Barrick Gold Corporation, the world’s second-largest gold producer. This action marks a significant escalation in the ongoing disputes over revenue sharing between the West African nation and foreign mining entities.
The seizure, which has so far amounted to around $245 million worth of gold, represents a bold move by Mali’s military government, which took control in 2020. This move is part of a broader strategy to increase national revenue amidst economic pressures, including jihadi violence and poverty. The gold was reportedly taken from a mine near Kayes and transported to the capital, Bamako, under military escort, highlighting the seriousness with which the government is treating this issue.
Barrick Gold has found itself in a precarious position, with the seized gold no longer covered by its insurance, complicating its operations in Mali. The company announced that it might be “obliged” to suspend mining operations at the Loulo and Gounkoto mines due to this unprecedented action. This suspension could have a notable impact on Barrick’s earnings, with analysts estimating a potential 11% cut in the company’s earnings before interest, tax, and amortization for 2025 if operations are halted.
This situation arises from a long-standing dispute over the share of revenue owed to Mali from Barrick’s operations. The Malian government has claimed that the two mines owe a staggering $5.5 billion, a figure significantly higher than previously estimated, according to court orders. This claim has led to previous arrests of Barrick executives and the issuance of an arrest warrant for Barrick’s CEO, Mark Bristow, on charges of money laundering, although no evidence has been publicly presented.
The implications of this seizure extend beyond Barrick Gold. It signals a potential shift in how resource-rich countries like Mali might deal with foreign corporations, especially in a post-coup environment where national interests are being aggressively pursued. For Barrick, this could lead to reevaluation of its investment in Mali, considering the political and operational risks now evident.
For Mali, while this move might temporarily bolster government coffers, it could also deter future foreign investment in its mining sector, critical for its economy. The balance between asserting national sovereignty over resources and maintaining an attractive investment climate is delicate, and Mali’s actions are being closely watched by other nations and corporations in similar situations.
This event underscores the volatile nature of resource politics in regions with significant mineral wealth but political instability, with potential ramifications for global gold markets and investor confidence in African mining operations.
Sources:
https://apnews.com/article/mali-gold-barrick-d62e34fd1b4ba369ed16d52bca0f19a3
https://www.reuters.com/markets/commodities/mali-started-flying-gold-stocks-out-barrick-site-saturday-sources-say-2025-01-13/
https://en.wikipedia.org/wiki/Mining_industry_of_Mali
https://x.com/GoldTelegraph_/status/1878912616569221159
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