Barrick Gold May Suspend Mali Mining For Blocking Shipments

Toronto-headquartered Barrick Gold Corp, which has been unsuccessful in reaching an agreement on a new mining code in West African nation Mali, has threatened to suspend operations if the local authorities continued to block gold shipments.

The company said that although it had previously agreed on a framework to achieve a global resolution of the disputes with the Malian Government over the Loulo-Gounkoto complex, it has to date been unsuccessful in arriving at a final resolution despite numerous good-faith attempts to negotiate and a willingness to compromise beyond its legal rights.

Barrick has engaged constructively with the government and its external advisors over the past 12 months, addressing their requests for an increased share of the economic benefits generated by Loulo-Gounkoto.  Notably, the government, a 20% shareholder, has to date received the majority of these benefits.

Barrick’s proposals toward a Memorandum of Agreement, which included significant concessions, have not been meaningfully considered and have been rejected by the Government. Even though the 2023 Mining Code has no application to existing operations such as Loulo-Gounkoto, the government was insisting on forcing Loulo-Gounkoto under the framework of that Code, the company said.

“Local operating conditions have deteriorated significantly with employees imprisoned without cause and gold shipments blocked. If shipments remain suspended, Barrick will be compelled to suspend operations, further impacting the viability of this critical economic driver for Mali,” the company said.

Contribution to Mali’s Economy

Over 29 years, Barrick has invested more than $10 billion in Mali, with its mines contributing 5% to 10% of the country’s GDP annually and in 2023 alone, Barrick contributed over $1 billion to the economy.

Loulo-Gounkoto remains one of Mali’s largest taxpayers and employers, with 97% of its 8,000-strong workforce comprising Malian nationals. To date, the Malian state has received more than 70% of the economic benefits from the complex.

Pressure on Local Management

Barrick Gold said that since November 25, several senior members of its Malian management team have been imprisoned on unfounded charges, accompanied by concerning actions such as baseless tax and customs claims and the reported issuance of an illegitimate arrest warrant against Barrick’s President and CEO. These actions raise serious concerns about the misuse of the criminal justice system.

This follows the earlier detention of Barrick management in September and similar incidents involving senior executives from other mining operators being jailed.

Committed to Resolution

Barrick Gold President and CEO Mark Bristow said that his company has been a committed partner to Mali for nearly three decades, delivering significant value to stakeholders and communities.

“However, recent developments further erode investor confidence in Mali’s mining sector and will deter future investment. Nonetheless, in view of our long-standing commitment to the people of Mali, we remain open to constructive engagement with the government to resolve these issues while protecting the viability of this key economic driver for Mali,” Bristow said.

Bristow emphasised the need for negotiations to be mutual, respectful of existing agreements, and aimed at preserving the long-term sustainability of the mining sector in Mali.