Barrick Gold (NYSE: GOLD; TSX: ABX) has initiated arbitration proceedings with the Malian government over a long-standing dispute regarding its mining operations in the country. The Canadian mining giant filed a request with the International Centre for the Settlement of Investment Disputes (ICSID) on Wednesday.
The move comes after Barrick threatened earlier this week to suspend operations in Mali, citing the ongoing blockage of gold shipments and unresolved issues surrounding a new mining code. The company has been at odds with the Malian government for several months over the division of economic benefits from its Loulo-Gounkoto complex, which produced nearly 700,000 ounces of gold in 2023.
In a statement, Barrick expressed its commitment to resolving the dispute “through established processes in a fair and transparent manner.” CEO Mark Bristow emphasized the company’s longstanding presence in Mali, noting Barrick’s near three-decade investment in the country. “While this process is ongoing, Barrick remains open to continued dialogue with the government to resolve these issues amicably and ensure the long-term success of the Loulo-Gounkoto complex,” Bristow said.
Tensions Escalate Amid Political and Economic Reforms
Since a military coup in 2021, Mali has been under the control of a junta, which has made restructuring the mining sector a key priority. This has included the introduction of a new mining code and a series of audits of foreign-operated mines. The changes have led to strained negotiations between the government and international operators, particularly concerning tax matters and the terms of new agreements.
The situation has been further complicated by the arrest of staff from Resolute Mining (ASX: RSG) and Barrick by Malian authorities since September. Last week, tensions reached a new level when the Malian government issued an arrest warrant for Barrick CEO Mark Bristow, citing unresolved tax disputes.
Economic Significance of the Loulo-Gounkoto Complex
The Loulo-Gounkoto complex, which Barrick developed during its acquisition of Randgold Resources in 2018, is a major economic driver for Mali. The complex, which is among the country’s largest gold-producing assets, represents a cornerstone of Mali’s economy. Barrick has invested over $10 billion in the country over the past 29 years, contributing between 5% and 10% of Mali’s GDP annually. In 2023, the company injected more than $1 billion into the local economy.
Barrick also stands as one of Mali’s largest employers and taxpayers, with 97% of its 8,000-strong workforce comprising Malian nationals. According to Barrick, the Malian state has directly received more than 70% of the economic benefits generated by the complex.
Impact on Barrick’s Market Performance
Following the announcement, Barrick’s shares fell by as much as 1.4%, with the company’s market capitalization sitting at $28.25 billion as of 9:39 a.m. New York time.
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