Canadian mining giant Barrick Gold (ABX.TO) has officially submitted an arbitration request to the International Centre for Settlement of Investment Disputes to resolve an ongoing dispute with the Malian government regarding its Loulo-Gounkoto gold mine complex.
Key Highlights:
Dispute Background:
The disagreement between Barrick and the Malian junta has been ongoing since 2023, primarily centered around a contract that aligns with the country’s new mining regulations.
Tensions escalated recently, culminating in Mali issuing an arrest warrant for Barrick CEO Mark Bristow.
Ownership Structure:
Barrick Gold owns 80% of the Loulo-Gounkoto complex, while the Malian government holds the remaining 20%.
Operational Threats:
Barrick has threatened to suspend operations in Mali due to deteriorating conditions at the mine. Analysts from Jefferies noted that such a closure could lead to an 11% reduction in Barrick’s earnings before interest, taxes, and amortization next year.
Arbitration as a Solution:
Barrick stated that arbitration has historically been an effective means of resolving disputes and finding mutually acceptable solutions.
Current Status of Operations:
While Barrick has not confirmed whether it has suspended operations, reports indicate that four of its executives were arrested in Mali in November and are still detained. Despite these developments, the mine reportedly continues to operate, although gold exports have been halted.
Financial Impact:
For the nine months ending September 30, the Loulo-Gounkoto mine generated $949 million in revenue for Barrick.
Increased Pressure on Miners:
Under interim President Assimi Goita, Mali has intensified scrutiny on western mining companies, seeking to increase the government’s revenue share from gold operations. Recent months have seen the detention of senior executives from various western mining firms over alleged non-payment of mining taxes.
Market Context:
This increased pressure from the Malian government coincides with rising gold prices, which have reached record highs.