Mark Bristow, CEO of Barrick Gold Co., speaks during the Investing in African Mining Indaba 2023 conference in Cape Town, South Africa, on Feb. 8, 2023.SHELLEY CHRISTIANS/Reuters
Barrick Gold Corp. ABX-T chief executive Mark Bristow says the Canadian gold miner is prepared to fork over to Mali more than half of the economic spoils from mining in the country, as it toils to put an end to yet another fiscal dispute with an overseas government.
Toronto-based Barrick over the past few years has bounced from one fiscal dispute to another with several host countries over taxes, royalties and joint-venture stakes in its mines overseas.
After patching up disputes that lasted for years with both Tanzania in East Africa and then Papua New Guinea in the southwestern Pacific, Barrick this year has tangled with Mali’s military junta in West Africa.
Mali last year introduced a new mining code aimed at imposing higher royalties on foreign companies operating in the country and taking up to a 35-per-cent ownership stake in mines. The split between Barrick and Mali in the Loulo-Gounkoto mining complex is currently 80-20 in favour of the Canadian miner. Barrick has pushed back on the new mining code and challenged an audit of the company’s operations.
Mali late last year claimed that Barrick owed it roughly US$417-million in back taxes dating back to 2017. Barrick disputed the amount, saying it used valid tax credits. In return for a payment of US$17-million, Barrick received a temporary stay on the matter.
Mr. Bristow in a conference call on Thursday following the release of the company’s third-quarter earnings said that talks were continuing with the government of Mali, as he outlined what Barrick is putting on the table.
“We have indicated that we are committed to finding a way to share the benefits, as we’ve done in Tanzania and Papua New Guinea, and as we do everywhere. And we’re prepared to give more to the Malian government than 50 per cent.”
The commitment to pay more than half of the economic benefits are the first financial details that Barrick has confirmed following a tentative agreement announced with Mali in late September. Even though Barrick’s press release at the time carried the headline, “Barrick and Mali reach agreement to settle disputes,” that appeared to be premature.
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A couple of weeks later, Mali’s Minister of Economy and Finances and Minister of Mines lashed out at Barrick in a release for allegedly not living up to its commitments. The ministers said there were serious risks to Barrick continuing to operate in Mali. But Barrick said it was acting in good faith as a long-standing partner of the country. The Canadian miner also said it had paid US$85-million to Mali as part of the negotiations.
During the question-and-answer portion of the earnings call on Thursday, analysts mostly avoided bringing up Mali. The one exception was Tanya Jakusconek, analyst with Scotia Capital Inc., who put the following to Mr. Bristow: “Just confused as to where we are on this. I thought an agreement had been put in place,” she said. “You made a payment, and then we have a press release saying that the government may not renew the contract.”
Mr. Bristow countered that Barrick has been clear in its communications.
In a regulatory disclosure on Thursday, Barrick said it remains committed to solving its disputes with Mali, “but there can be no assurance that the parties will reach a settlement on the terms proposed by Barrick or at all.”
Loulo-Gounkoto is one of Barrick’s biggest mining sites. Earlier this year, the company said the complex should produce more than half a million ounces of gold in 2024.
Barrick inherited Loulo-Gounkoto after it bought African-focused miner Randgold Resources Ltd. in 2019.
Barrick late last year restarted production at its Porgera gold mine in Papua New Guinea after a suspension that had been in place since 2020, which stemmed from a fiscal dispute with the government. In return for allowing the restart, Papua New Guinea’s ownership in the mine rose to 51 per cent from 5 per cent.
Before that, Barrick spent years duking it out with Tanzania. In 2017, Tanzania banned Barrick subsidiary Acacia Mining PLC from exporting gold concentrate and demanded US$200-billion in back taxes. In 2020, Barrick agreed to pay Tanzania a US$300-million penalty and committed to paying the government a larger share of the profits.