Barrick Gold Halts Operations in Mali After Government Gold Seizure

BREAKING NEWSJanuary 13, 2025 at 11:17 PM UTC

TLDR

Barrick Gold said it will temporarily suspend operations at its Loulo-Gounkoto mining complex in Mali
This follows the government’s seizure of approximately three metric tons of gold, valued at $245 million
The gold was transported to the state-owned Banque Malienne de Solidarité in Bamako over the weekend

Canadian mining giant Barrick Gold said it will temporarily suspend operations at its Loulo-Gounkoto mining complex in Mali following the government’s seizure of approximately three metric tons of gold, valued at $245 million. The gold was transported to the state-owned Banque Malienne de Solidarité in Bamako over the weekend.

The seizure stems from a court order issued last week, with Mali’s economy ministry claiming Barrick owes $5.5 billion, a figure significantly higher than previous estimates. The company disputes the claim, citing a long-standing contractual disagreement with the government under new mining rules.

Barrick has filed for arbitration with the International Centre for Settlement of Investment Disputes, further escalating tensions. This dispute adds to previous disruptions, including the detention of Barrick executives and shipment blocks. Jefferies analysts estimate that a prolonged suspension of Loulo-Gounkoto operations could reduce Barrick’s earnings before interest, tax, and amortization (EBITDA) by 11% in 2025.

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Key Takeaways

The seizure of Barrick’s gold highlights the growing trend of resource-rich nations like Mali renegotiating mining agreements to capture a larger share of revenues. This comes as gold prices hit record highs, increasing pressure on foreign operators to revise terms. Barrick, which owns 80% of the Loulo-Gounkoto complex, has paid $85 million to Mali in October but denies owing the billions demanded by the government. The company’s challenges mirror similar renegotiation efforts across Mali, Burkina Faso, and Niger, signaling a shift in how African nations approach mining contracts. The suspension could exacerbate Mali’s economic instability while raising risks for foreign investors. Barrick’s arbitration proceedings may set a precedent for disputes in the region, with broader implications for the global mining industry.

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