Barrick Update on Mali Operations
Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) reports that although it had previously agreed on a framework to achieve a global resolution of the disputes with the Government of Mali over the Loulo-Gounkoto complex, it has to date been unsuccessful in arriving at a final resolution despite numerous good-faith attempts to negotiate and a willingness to compromise beyond its legal rights.
Barrick has engaged constructively with the Malian government and its external advisors over the past 12 months, addressing their requests for an increased share of the economic benefits generated by Loulo-Gounkoto.
Notably, the government, a 20% shareholder, has to date received the majority of these benefits. Barrick’s proposals toward a Memorandum of Agreement, which included significant concessions, have not been meaningfully considered and have been rejected by the Government of Mali.
Even though the 2023 Mining Code has no application to existing operations such as Loulo-Gounkoto, the government insists on forcing Loulo-Gounkoto under the framework of that Code.
Local operating conditions have deteriorated significantly with employees imprisoned without cause and gold shipments blocked.
If shipments remain suspended, Barrick will be compelled to suspend operations, further impacting the viability of this critical economic driver for Mali.
Strong Contribution to Mali’s Economy
Over 29 years, Barrick has invested more than $10 billion in Mali, with its mines contributing 5% to 10% of the country’s GDP annually.
In 2023 alone, Barrick contributed over $1 billion to the economy. Loulo-Gounkoto remains one of Mali’s largest taxpayers and employers, with 97% of its 8,000-strong workforce comprising Malian nationals. To date, the Malian state has received more than 70% of the economic benefits from the complex.
Pressure on Local Management
Since November 25, several senior members of Barrick’s Malian management team have been imprisoned on unfounded charges, accompanied by concerning actions such as baseless tax and customs claims and the reported issuance of an illegitimate arrest warrant against Barrick’s President and CEO. These actions raise serious concerns about the misuse of the criminal justice system.
This follows the earlier detention of Barrick management in September and similar incidents involving senior executives from other mining operators being jailed.
Commitment to Resolution
“Barrick has been a committed partner to Mali for nearly three decades, delivering significant value to stakeholders and communities,” said Mark Bristow, Barrick President and CEO. “Recent developments further erode investor confidence in Mali’s mining sector and will deter future investment.
Nonetheless, in view of our long-standing commitment to the people of Mali, we remain open to constructive engagement with the government to resolve these issues while protecting the viability of this key economic driver for Mali.”
Bristow emphasized the need for negotiations to be mutual, respectful of existing agreements, and aimed at preserving the long-term sustainability of the mining sector in Mali.
