Barrick Gold Corp. is grappling with major new tensions in Mali as the military junta seeks greater control of the mining sector. Following the arrest of four senior employees, the Toronto-based miner said yesterday it had reached an agreement to “find a global resolution” with authorities to settle disputes – but didn’t share details of next steps. Today, we dig deeper into how Canadian miners are navigating a precarious new geopolitical landscape.
In the news
Shift change: Fairfax Financial is taking a controlling stake in the company that owns Bauer Hockey.
Going electric: Britain shut down its last coal-fired power station, making the country first among the G7 to wean itself off the fossil fuel.
Pipeline press: A B.C. pipeline project touted by the Nisga’a Nation as a prime example of economic reconciliation is creating complications with nearby Indigenous groups.
Happening today
- Dock workers along the U.S. East and Gulf coasts went on strike this morning, a move that could have a long-lasting effect on trade across North America. We’re watching developments in Montreal, where dock workers have also walked off the job.
- Euro zone inflation in September fell to 1.8 per cent, below the European Central Bank’s target rate, lifting hopes for faster interest-rate cuts starting this month.
- Earnings include Nike, whose one-year stock price tracks neatly against an upside-down Swoosh.
A photograph provided by the French military shows Russian mercenaries in northern Mali.The Associated Press
In focus
Canadian miners under pressure in Mali
Last week’s arrest of four Barrick employees was the latest in a string of pressure tactics by the military regime to extract more revenue from the mining sector. Today, Africa bureau chief Geoffrey York helps me understand what Mali’s shifting geopolitical landscape means for Canadian miners.
Why did Mali turn on the West? And why did it turn to Russia?
Until a few years ago, Canada has had considerable leverage in Mali. Not only were Canadian companies among the biggest investors there, but the Canadian government was also one of its leading foreign-aid donors. Mali was considered a reliable Western partner; that all changed when the rebel insurgencies in northern Mali began to destabilize the country.
Mali’s military was unable to crush the Islamist and separatist militia forces in the north, and the insurgencies moved relentlessly southward. Many people, including key military leaders, blamed the situation on the easiest scapegoat: Mali’s democratic government and its traditional partner, France, which had a significant troop presence in Mali.
When did the change in power did take place?
The military seized power in two coups in 2020 and 2021, and it soon evicted the French and the United Nations peacekeeping force, turning instead to a more ruthless partner: the Russian military, in the guise of the Wagner Group. Analysts say the Russians are willing to fight more aggressively than the French troops, violating human-rights norms and inflicting mass civilian casualties in their battle against the insurgents.
Those tactics, however, have failed to roll back the rebel militias or halt their attacks. The insurgents killed dozens of Russian soldiers in an ambush in late July, and then launched a brazen attack on Mali’s capital, Bamako, and its international airport in September.
Is it possible these arrests mark a turning point for the junta in either taking over the mine or pushing for a larger stake?
It might be better to view the arrests as the latest in a series of pressure tactics by the military regime, which is clearly trying to extract more revenue from the mining sector. Those Russian soldiers don’t come cheap: The Malian government is paying a reported US$10-million per month to Moscow for an estimated 1,000 troops in the country. Mali’s economy remains weak, with widespread poverty and frequent electricity cuts. Its mining sector is one of the few reliable sources of tax revenue, and the government thinks it can squeeze more from the industry.
How can it do that?
That was the purpose of a special audit that the government launched in the mining sector last year, which Barrick has disputed. It was also the purpose of Mali’s new mining code, which allows higher state ownership of some mines, although Barrick says the new code would not apply to pre-existing mining titles.
The latest pressure tactic would seem to be the arrest of the four Barrick employees. Barrick has seen other African countries using arrests of corporate executives as a form of leverage in the past – for example in Tanzania in 2018, during a tax dispute, when the Tanzanian authorities arrested and jailed three executives of Barrick’s subsidiary, Acacia Mining. The tax dispute was eventually resolved and the executives were freed, but Barrick had to make significant concessions, including a US$300-million payment and new revenue-sharing promises.
Can you explain the tensions around the Islamist and separatist insurgencies, and how they’re interfering in Barrick’s business?
Barrick’s mining operations are in a peaceful region in the west of Mali, near the Senegal border, far from the main targets of rebel attacks. But the insurgencies have expanded significantly over the past three years, and there’s no guarantee that Barrick’s mining site will remain unscathed indefinitely.
The latest attack on the capital on Sept. 17, including a rebel takeover of large sections of Mali’s main international airport for most of a day, has raised fears that the insurgents could topple the government. The insurgencies also have an indirect impact on Barrick: They are creating an atmosphere of political and economic desperation in which the government could contemplate more extreme measures against investors. The military junta has already taken harsh measures to tighten its grip on the country: arresting opposition leaders, dissolving opposition parties, heavily restricting the media and postponing elections.
If Barrick is such an important economic contributor, wouldn’t it better serve them to have a strong relationship?
This is essentially the argument that Barrick is making to Mali’s military junta. The company argues that the mining sector is crucial to Mali’s economy, and this requires the presence of experienced Western companies with the technical expertise to run the mines and generate revenue for the government. It’s a compelling argument. But the government is increasingly close to Moscow and could be persuaded to act on Russia’s behalf. It’s well-known that Russia uses its military presence in Africa as leverage to exploit the economies of the countries where it operates.
This has certainly been the case in Central African Republic, where Wagner Group soldiers in 2020 seized control of a mine owned by a Canadian company, Axmin Inc., and transferred it to a Wagner-affiliated company, Midas Ressources, which has been placed under U.S. sanctions for allegedly funnelling money to the Kremlin’s war effort in Ukraine and Africa. We can assume that Moscow is sniffing around the economic opportunities in Mali, including the mining sector, given Russia’s history of involvement in mining. Earlier this year, Russian soldiers took control of the largest artisanal-mining site in northern Mali. And Russia has already signed an agreement with Mali to build a gold refinery in the country, with a capacity of 200 tonnes per year.
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Charted
China opens the stimulus spigots
China’s CSI300 Index continued last week’s 16-per-cent jump and Shanghai stocks shot up more than 7 per cent as a report in China Securities Journal signalled official assent for the rally. An editorial on Monday said reviving stocks and boosting investor confidence will aid the country’s economic recovery, breaking a vicious cycle of curbed investment and damaged sentiment. You can read more here on China’s stimulus story here.
Morning markets
Global markets were mostly higher as Japan’s Nikkei recouped some of yesterday’s losses and euro zone inflation data boosted the case for faster European Central Bank interest rate cuts. Wall Street futures were mixed and TSX futures pointed lower as crude prices eased.
Overseas, the pan-European STOXX 600 was up 0.3 per cent in morning trading. Britain’s FTSE 100 rose 0.46 per cent, Germany’s DAX climbed 0.33 per cent and France’s CAC 40 slipped 0.15 per cent.
In Asia, the Nikkei ended the session 1.93 per cent higher, while Hong Kong’s Hang Seng was closed for a holiday.
The Canadian dollar traded at 73.95 U.S. cents.