Barrick Gold Corp. ABX-T says it has reached a tentative agreement to solve a mining dispute with the Mali government, though uncertainty persists over the reported arrest of some of the company’s employees in the West African country.
Toronto-based Barrick in a Monday statement gave no details on the financial terms of the agreement, but said they would be revealed once the settlement was finalized.
Barrick chief executive Mark Bristow said in the statement that negotiations with Mali “have proved challenging,” but he looked forward to normalizing the relationship.
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 ownership between Barrick and Mali in the Loulo-Gounkoto mining complex is currently split 80-20 in favour of the Canadian miner.
Barrick had pushed back on the new mining code and challenged an audit of the company’s operations in the country conducted by the military junta government.
Mr. Bristow in May said that Barrick was dealing with people who “are not particularly competent in the mining industry.”
Then, last week, Reuters reported that four employees of Barrick were arrested in Mali over alleged financial crimes. Barrick has not yet commented on the situation and declined to answer more questions about it on Monday.
The military junta seized power in 2020 and 2021 through a series of coups. Since then, the former French colony has cut ties with France and aligned itself with Russia. French troops in the country have been replaced by Russian military contractors.
The regime has signed a series of economic agreements with Moscow, including an agreement for Russia to build a gold refinery in Mali. In both Mali and Central African Republic, Russian troops have been involved in helping authorities to seize mining sites. The U.S. government has accused Russia of using African mining revenue to help finance its global military operations.
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. Mr. Bristow ran Randgold for about two decades and became Barrick’s CEO after the deal closed.
Shares in Barrick fell by 1.7 per cent to close at $26.90 apiece on the Toronto Stock Exchange on Monday.
Vancouver-based B2Gold Corp. has also recently gone through intense negotiations with Mali over dividing the economic spoils. B2 operates the Fekola mine in southwest Mali.
Last month, B2 CEO Clive Johnson said in a presentation at a gold conference in Denver that uncertainty in Mali was largely responsible for the company losing about $5-billion in market value over the past few years.
Fekola’s existing 80-20 ownership split with the government is protected until 2040, but a smaller regional operation will be affected by what he characterized as a significant increase in royalties, and the government taking a 30-per-cent stake in the project.
With a report by Geoffrey York