PREVIEW
Barrick Gold says it will suspend mining operations in the country after the government seized gold stocks from the company’s Loulo-Gounkoto operation
Canadian mining company Barrick Gold has pulled the plug on operations at its Loulo-Gounkoto complex in Mali after the Malian government seized an estimated 3 metric tonnes of gold, valued at around US$245 million from the facility at the weekend.
The seizure follows demands by Colonel Assimi Goïta’s military regime for hefty tax payments from Barrick, based on a court order claiming the company owed $5.5 billion in taxes, after previously demanding $500m in back taxes.
Barrick paid $85m in taxes to the government last October, according to its latest quarterly earnings report. The Bamako government owns a 20% stake in Loulo-Gounkoto.
The junta had also issued an arrest warrant for Barrick’s chief executive Mark Bristow.
The neighbouring military regimes in Burkina Faso and Niger have also signalled that they want to significantly increase revenues from mining. In November, Niger expelled French miner Orano from its uranium concession (AC Vol 65 No 21, Junta’s stance threatens uranium exports & Vol 65 No 23, Yellowcake shutdown).
While industry analysts estimate that closing Loulo-Gounkoto will cost Barrick around 11% of its annual revenue, the decision leaves grave doubts over the future for foreign miners in the country.
In December, United Kingdom miner Hummingbird Resources announced its sale to Nioko Resources, a subsidiary of its main creditor, for a reduced price of $17.5m. Hummingbird attributed the decision to operational losses at its Yanfolila mine in Mali and the revenue demands from the junta, with which it had been in negotiations (Dispatches, 12/1/22, Bamako junta gets more isolated as West African leaders cut off financial ties).
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