KEY POINTS
- Barrick warns of halting Mali operations over export bans.
- Employee detentions and CEO arrest warrant fuel tensions.
- Failed mining code talks put Mali’s mining sector at risk.
Barrick Gold is warning it may suspend operations in Mali if the government continues blocking its gold exports. The world’s second-largest gold producer said on Monday that conditions at its Loulo-Gounkoto mining complex have “deteriorated significantly,” with employees detained and shipments of bullion halted.
“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 in a statement.
The mining giant has been in negotiations with Malian authorities for over a year to secure a new mining code, but talks have hit a stalemate. Barrick said it had made “significant concessions,” only for the government to reject them.
Jefferies, a leading financial services company, noted that market analysts had already anticipated “challenging negotiations” for Barrick in Mali.
Employee arrests and executive warrant intensify tensions
The dispute between Barrick Gold and Mali’s government escalated with the arrest of staff members and an arrest warrant for CEO Mark Bristow. The government has also detained executives from Australia’s Resolute Mining, including its CEO, Terence Holohan, in a separate dispute.
The Malian government is pushing for Barrick’s operations to be governed by a 2023 mining code, but Barrick insists that the law should not apply retroactively to its existing operations.
A senior Ministry of Mines official told Reuters “Negotiations are continuing, they’re ongoing.” However, Barrick is concerned that the government’s stance is eroding investor confidence.
“Recent developments further erode investor confidence in Mali’s mining sector and will deter future investment,” Barrick said in its statement.
The mining industry plays a vital role in Mali’s economy, and any disruption to gold production could have a significant economic impact.
Barrick signals operational shutdown if export bans persist
Barrick’s Loulo-Gounkoto mining complex is one of the largest contributors to Mali’s economy, but the company says it cannot continue operations under the current circumstances. The blocking of bullion shipments has jeopardized cash flow, and employee detentions have strained relations with authorities.
Barrick’s shares dropped 1.8 percent on the Toronto Stock Exchange after the announcement, reflecting investor concern over the situation.
The company’s decision to suspend operations would not only affect Mali’s economy but could also disrupt global gold markets. Mali is Africa’s fourth-largest gold producer, and any production halt could lead to supply issues and increased gold prices on the international market.
For now, Barrick is holding out hope for a resolution but warns that without progress, it will have no choice but to stop operations.
