After nearly two years of legal and financial deadlock, Canadian mining giant Barrick Gold has reached a landmark agreement with the Malian government to settle a dispute over its gold mining assets in the country. The deal, which is pending formal approval from Mali’s authorities, could be officially announced as early as Thursday, according to sources familiar with the negotiations.
Terms of the Agreement
As part of the settlement, Barrick will pay 275 billion CFA francs ($438 million) to Mali’s government in exchange for several key concessions:
• The release of detained employees
• The return of seized gold
• The resumption of operations at the Loulo-Gounkoto mining complex
The dispute stemmed from Mali’s 2023 mining code, which grants the government a greater stake in the country’s lucrative gold mining sector. This led to a standoff between Barrick and Malian authorities, resulting in the mine’s temporary closure and legal proceedings.
Before reaching this agreement, a delegation comprising over 15 representatives from Malian ministries and private consultancy firm Iventus Mining carried out a three-day inspection of Barrick’s mining site. Last week, Mali gave the company a one-week deadline to resume operations, signaling a mounting urgency to resolve the impasse.
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The shutdown significantly affected both Barrick’s production targets and Mali’s economy.
• Barrick had to lower its gold output forecastfor 2024 to between 3.2 million and 3.5 million ounces, compared to 3.9 million ounces in 2023.
• The company paid $460 million in taxes and royaltiesto Mali last year and estimated it could have contributed $550 millionin 2024 if mining had continued uninterrupted.
• Mali’s industrial gold productionfell 23% year-over-year in 2024, underscoring the economic toll of the dispute.
Mali’s military-led government, which took power in 2020, has been pushing for greater control over the country’s mineral wealth amid rising global gold prices. The country has also been strengthening ties with Russia, using a mix of legal battles, nationalizations, and high-profile arrests to assert more authority over foreign mining firms.
While some companies, like B2Gold, managed to secure agreements quickly, others, such as Australia’s Resolute Mining, faced prolonged disputes. Barrick had even launched arbitration proceedings against Mali, but it remains unclear whether the new deal will lead the company to drop its legal case.
Following news of the agreement, Barrick’s shares rose 3.37% on the Toronto Stock Exchange. The deal is expected to stabilize operations at one of Barrick’s key mining sites while ensuring Mali reaps greater financial benefits from its gold resources.
With gold prices at record highs, both Barrick and Mali stand to gain significantly from the resumption of mining activities. However, the long-term implications of Mali’s aggressive resource policies on foreign investment remain to be seen.
