Barrick Gold Corp. ABX-T has suspended operations in Mali at one of its biggest international mines after the country’s military junta seized gold from the mine in an escalating tax dispute.
The Canadian miner said Tuesday that the military regime of the West African country had confiscated gold from the company’s Loulo-Gounkoto mining complex and had transported the precious metal to a custodial bank. The government, which has been blocking exports from the mine since December, obtained an interim attachment order from a judge last week to allow it to seize the gold.
“As a result, Barrick has regrettably initiated the temporary suspension of operations while it continues to work toward a resolution,” the Toronto-based company said in a statement.
The authorities seized about three tonnes of gold from the Barrick mine, worth around US$245-million, and shipped it out of the mine in two helicopter loads, Reuters reported on Monday.
The Loulo-Gounkoto complex, which is 80 per cent owned by Barrick and 20 per cent by Mali, produced more than 420,000 ounces of gold during the first nine months of 2024. The mines account for about 14 per cent of Barrick’s earnings before interest, taxes, depreciation and amortization.
West African countries had once been touted as a lucrative emerging field for Canadian mining investors, with fewer barriers than traditional mining countries such as South Africa. But in recent years, Mali and others have suffered a series of military coups, leading to closer relations with Russia and relentless efforts to squeeze more revenue from Western mining companies.
Barrick has been embroiled in an escalating tax dispute with the government in Mali for more than a year, and this past fall the junta intensified its pressure tactics against the company. The government has been seeking at least US$417-million from Barrick.
In an interview, Rick Rule, a well-known mining sector investor and owner of Rule Investment Media, characterized the seizure of the gold stock as theft.
Mr. Rule said that Barrick’s chief executive, Mark Bristow, “could have played a longer term, better political game” in his negotiations with the West African country. But ultimately taking Mali to arbitration is probably the best move, he said.
“He ran face-to-face into a populist coup leader, who saw the opportunity to gain political advantage by obviating a deal that his predecessors had entered into, which was good for his country,” Mr. Rule said.
“This needs to go to international arbitration, the same way that the theft of assets in Panama from First Quantum and Franco-Nevada needs to go to international arbitration.“
Canada’s First Quantum Minerals Ltd. and Franco-Nevada Corp. took Panama to international arbitration after the country ordered the shutdown of its Cobre Panama copper mine in 2023. The matter remains unresolved.
Last month, Barrick started international arbitration proceedings against Mali with the International Centre for the Settlement of Investment Disputes (ICSID).
Barrick had publicly warned last week that it might have to shut down its Mali mining operation because of the export ban and other restrictions. It said the attachment order was unwarranted.
The dispute began more than a year ago with a new mining code and a special audit of the mining sector.
Barrick said on Tuesday that it “remains committed to constructive engagement with the Malian government and all stakeholders to find an amicable solution.” Relations with the regime, however, have been far from amicable in recent months.
The junta began intensifying its pressure tactics against Barrick in late September when it arrested four of Barrick’s employees, holding them in custody for several days before releasing them.
In November, the authorities again arrested several of Barrick’s senior managers. This time the managers have remained in prison.
The authorities deployed another pressure tactic in early December when they issued an arrest warrant for Mr. Bristow, along with Loulo-Gounkoto CEO Abbas Coulibaly, neither of whom were in the country at the time. The warrants, posted online, showed that Mr. Bristow was being accused of money laundering and violating Mali’s financial regulations.
Barrick said at the time that the arrests and the warrants “raise serious concerns about the misuse of the criminal justice system” in Mali.
Meanwhile, the regime was also taking similar steps against other mining companies. In October, authorities arrested three employees of Australian-based Resolute Mining, including its CEO, Terence Holohan, and held them in custody for more than a week, until the company promised to pay US$160-million in a tax dispute.
Vancouver-based B2Gold Corp. managed to negotiate a new fiscal agreement with Mali in September without any of its executives getting arrested. Allied Gold Corp. also announced a new agreement with the country around that time.
This isn’t the first time that Barrick has sought arbitration against a host country. Typically it takes years for arbitration to play out, but in the event of a positive outcome for Barrick, there are no guarantees it will obtain a cash payment.
In 2011, Barrick launched arbitration against Pakistan in a dispute over the right to mine a massive copper and gold project in the country. It took seven years for Barrick to be awarded a multibillion-dollar payout. Three years after that, a new deal was reached that saw Barrick opting to move forward on the project, in lieu of receiving cash payment from Pakistan.