Mali-Barrick Gold talks stall over $197m payment dispute

Military junta and Barrick Gold Corp have suspended negotiations aimed at resolving a long-standing dispute over payments from the country's largest gold mine, the Loulo-Gounkoto complex.

The dispute centres around Mali's demand for a $197-million settlement payment and Barrick's adherence to a new mining code introduced in 2023.

According to sources familiar with the government's position, Mali is seeking a one-time payment of 125 billion CFA francs ($197 million) from Barrick.

The Canadian mining giant, however, prefers a payment plan spread over time. The new mining code, which came into force in 2023, could increase Mali's stakes and royalties in the mine, potentially reducing the duration of Barrick's license.

Complex situation

The situation is complex, with four Barrick employees detained since November on allegations of money laundering and financing terrorism.

Barrick has deemed these allegations "unfounded".

The company suspended mining activities at Loulo-Gounkoto after the government began removing gold from the mine.

Mali's military leaders are pushing for more revenue from foreign miners, with several companies, including B2Gold Corp and Allied Gold Corp, announcing agreements involving settlement payments and expansion projects.

The junta's aggressive stance has raised concerns among investors and mining companies operating in Mali.

Significant implications

The Loulo-Gounkoto complex, operated by Barrick, is one of the largest gold mines in Africa. In 2023, the mine produced almost 700,000 ounces of gold, accounting for approximately 14 per cent of Barrick's total output.

The dispute has significant implications for Barrick's operations in Mali and the country's mining sector as a whole.

Analysts predict that halting production at the mine could reduce Barrick's 2025 earnings by 11 per cent.

Barrick CEO Mark Bristow is quoted as saying that the miner was making progress with the talks but said the advances hadn't come as fast as expected.

The company has declined to comment on the suspension of negotiations.

The Malian government's demands for increased revenue from foreign miners are driven by the country's economic challenges.

Mali is one of the poorest countries in the world, with a significant portion of its population living below the poverty line.

The government's stance has been reinforced by the country's new mining code, which aims to increase state revenues from mining activities.

The code introduces new taxes, royalties and fees, and requires mining companies to adhere to stricter environmental and social standards.

As the dispute between Mali and Barrick continues, the mining sector in Mali remains on high alert.

The outcome of the negotiations will have significant implications for the country's mining industry and its economic future.