Nathan Denette/The Canadian Press
Barrick Gold Corp. ABX-T is signalling it could be in for a protracted slog in Mali, as the big Canadian gold miner pushes back on the military government’s demands for a greater share of the country’s mining spoils.
Barrick on Wednesday said Mali is seeking unspecified changes to the tax, financial and legal regime at its Loulo-Gounkoto mining operations. The site is on track to produce 535,000 ounces of gold this year and is the company’s biggest operation by far in Africa.
Mali last year introduced a new mining code that will allow its government and the private sector to acquire up to a 35-per-cent stake in mining projects. That’s up from 20 per cent, which is the share Mali owns in the Loulo-Gounkoto complex. The new code is set to affect Barrick’s operations when its permits come up for renewal.
In a conference call with analysts, following the release of the company’s first-quarter earnings, Barrick chief executive Mark Bristow said he is pushing back on Mali’s demands for a greater piece of the economics.
“We’re dealing with people that are not particularly competent in the mining industry,” Mr. Bristow said.
“Our argument is, ‘Be careful you don’t compromise the benefits to Mali by taking too much and eroding the value of the ore bodies that we’ve defined.’”
Mali’s military junta, which seized power in a coup in 2021, announced an audit of the gold industry the next year. Barrick has not released the details of its audit but has said it is challenging the findings. Mr. Bristow said on Wednesday the initial objective of Mali’s audit on the mining sector was “to try and find fault, rather than look for opportunities to build a better industry.”
Mali’s junta is closely allied with Russia, which has provided upward of one thousand soldiers to the country. Russian troops have been heavily involved in seizing mining sites in Mali and the Central African Republic in recent years, and the U.S. government has accused Russia of using African mining revenue to help finance its global military operations.
While both the outcome and timeline to fix the fracas in Mali is uncertain, Mr. Bristow said he had received an assurance from the Malian government that it isn’t contemplating expropriating its assets in the country, as some African publications had recently reported.
The Toronto-based gold company finds itself embroiled in yet another duel with a risky mining jurisdiction, only a few months after patching up a spat with a different host government, Papua New Guinea, that had dragged on for more than three years.
Barrick late last year said its Porgera gold mine in Papua New Guinea was finally restarting production after a suspension that had been in place since 2020 in the aftermath of a fiscal dispute. Barrick eventually agreed to grant the government and various other stakeholders a much bigger share of the economics of the mine.
Before the conflict with Papua New Guinea, Barrick spent years embroiled in a dispute with Tanzania. In 2017, the East African country banned Barrick subsidiary Acacia Mining PLC from exporting gold concentrate and demanded US$200-billion in back taxes. In 2020, Barrick agreed to give Tanzania a larger share of the profits and to pay a US$300-million penalty.
As Barrick faces an uncertain geopolitical environment, it also continues to deal with safety problems at its sites. The company reported two fatalities at its mines in the first quarter: one at its North Mara mine in Tanzania and the other at its Kibali site in the Democratic Republic of the Congo.
The miner reported five deaths in 2023, five in 2022, two in 2021 and one in 2020.
Barrick introduced an initiative called the Fatal Risk Management Program late last year at some of its operations. The program was rolled out across the company in the first quarter. It’s aimed at helping workers identify potentially hazardous conditions to reduce their chances of being involved in a fatal accident.
Proxy advisory firm Glass, Lewis & Co. recently censured Barrick for paying its executive team what it considered to be excessive cash bonuses in a year when the company grappled with a safety problem.
Glass Lewis recommended investors vote against Barrick’s non-binding vote on executive compensation at its recent annual meeting because of the disconnect between pay and performance at the company around safety. Glass Lewis also said Barrick’s own assessment of its safety record was itself an issue.
With a report from Geoffrey York