Barrick stripped of gold mine operation for six months by Mali court

CTV News

16 hours ago

The logo for Barrick Gold Corp. is pictured in this 2022 image. (Handout)
A Mali court ruled Monday that western gold mines held by Canadian giant Barrick would be managed for six months by an appointee, effectively stripping operation of one of the world's largest gold complexes from the firm.
The decision allows Mali's military government to appoint a new administrator in charge of the Loulo-Gounkoto complex and comes amid rising tensions between the junta and the Toronto-based company over taxes and mining.
The court named the administrator as Zoumana Makadji. The ruling marked the first time Mali has placed a mining company under such a status.
Makadji will be tasked with 'ensuring the mine is opened as quickly as possible', a magistrate from Bamako's commercial court told AFP, adding that after six months a judge will assess the progress of negotiations or an agreement with Barrick.
The military junta running Mali has tightened regulations on the mining sector, which is key to the economy.
It introduced a new industry code in recent years that grants the government a bigger share of profits from mining activities in the name of national sovereignty.
Mali 'accused Barrick of not properly paying taxes, royalties and dividends owed to the state, of having a contract that does not reflect Mali's legitimate interests, and of keeping the state out of the effective management of the mine and its revenues,' a source representing the government's interests told AFP.
For these reasons, Mali 'has decided to place the site under temporary administration through legal channels', the source said.
Barrick has an 80-percent stake in the Loulo-Gounkoto complex, while the Malian state holds the rest.
'While Barrick's subsidiaries remain the legal owners of the mine, operational control has been transferred to an external administrator,' Barrick said in a statement immediately following the decision.
It said that an arbitration process was 'fully under way' via the International Centre for Settlement of Investment Disputes (ICSID), a World Bank arbitration panel.
'The arbitration tribunal has been constituted, and Barrick has submitted a request for provisional measures to prevent further escalation and to safeguard its rights under binding mining conventions with the state of Mali,' the company said.
Intense escalation
Tensions have escalated in recent months between the government and company, and in November four Malian employees of the firm were detained.
Malian authorities issued national arrest warrants in December for the company's South African CEO and the complex's Malian general manager on allegations of 'money laundering'.
In mid-January, activities at the mine were suspended after Malian authorities carried out an order to seize gold stocks at Loulo-Gounkoto, taking some three tonnes of gold.
Last month, authorities ordered the closure of Barrick's offices in the capital Bamako for alleged non-payment of hundreds of millions of dollars of taxes.
The Malian government filed its request with Bamako's commercial court to place the Loulo-Gounkoto site under provisional administration on May 8.
Barrick says the escalation came despite it having paid Mali some $85 million in October 'as part of the ongoing negotiations' aimed at resolving 'all outstanding disputes'.
One of the poorest countries in the world, Mali is ruled by a military junta which came to power in back-to-back coups in 2020 and 2021.
Loulo-Gounkoto, which is situated in western Mali near the border with Senegal, was opened two decades ago and the first gold from underground operations was produced in 2011.
It consists of both open pit and underground mining. According to the trade publication Mining Technology, the mine contributed around $1 billion to the Malian economy in 2023.