Barrick Gold, a Canadian mining giant, is facing mounting pressure in Mali as the country’s military junta tightens its grip on the lucrative mining sector. Since seizing power in a 2021 coup, the junta has implemented a new mining code and conducted industry audits aimed at increasing state control over mining companies. Recent reports suggest they may be planning to take over Barrick’s Loulo-Gounkoto complex, one of the world’s largest gold-producing mines.
Barrick has declined to comment on the specifics of the negotiations, but company executives have emphasized the significant contributions their mines make to Mali’s economy. They’ve highlighted nearly $10 billion in taxes, royalties, and local supplier payments – representing 5% to 10% of the country’s GDP. This revenue stream is crucial for Mali’s development, particularly in vital sectors like education and healthcare.
Junta’s Growing Influence in Mali’s Gold Sector
The junta’s actions come amidst their growing partnership with Russia’s Wagner Group, a mercenary outfit with a presence in Mali since late 2021. In January 2024, Wagner soldiers reportedly seized control of Intahaka, the largest artisanal gold mine in northern Mali, for a brief period.
According to the Africa Defense Forum, published by the US military’s Africa Command, Barrick’s Loulo-Gounkoto complex is now “in Russia’s crosshairs.” This raises concerns about potential Russian involvement in any attempt to wrest control of the mine from Barrick. A stronger Russian presence in Mali’s gold industry could further destabilize the region and raise transparency issues.
While Barrick maintains confidence in its operating licenses, which are based on the 1991 mining code, negotiations regarding the Loulo-Gounkoto complex remain ongoing. The junta’s intentions and the potential impact on Mali’s gold production – a critical source of revenue – are unclear.
The Loulo-Gounkoto complex boasts significant gold reserves, estimated at 6.7 million ounces, and produced 683,000 ounces in 2023. It is on track to meet its production guidance for the current quarter and the year, making it a major contributor to Mali’s gold output. A disruption in operations at the mine could have significant repercussions for the country’s economy.
Finding Common Ground: A Path Forward
The current situation in Mali highlights the complex challenges surrounding resource governance in Africa. Balancing the interests of foreign mining companies with the desire for greater state control over resources is a delicate act. Transparency, adherence to agreements, and a commitment to responsible development are all crucial for ensuring a sustainable future for Mali’s mining sector.
Open communication between the Malian government, Barrick Gold, and other stakeholders is essential to resolving the current impasse. Finding a solution that respects existing contracts while addressing the junta’s desire for a greater share of the mining wealth is critical. This could involve renegotiating profit-sharing agreements or implementing social development programs that directly benefit Malian communities.
The outcome of the negotiations surrounding the Loulo-Gounkoto complex will be closely watched by other mining companies operating in Mali and throughout Africa. It has the potential to set a precedent for future interactions between governments and foreign investors in the mining sector.
Ultimately, a successful resolution that ensures continued responsible mining operations at Loulo-Gounkoto would benefit all parties involved. It would provide Barrick with the stability it needs to operate, generate revenue for the Malian government to fund development projects, and create jobs for Malian citizens.
Source: Mining.com
