Barrick Gold Corp. is poised to resume operations at its Loulo-Gounkoto mine in Mali, contingent upon receiving permission from the Malian authorities to restart gold shipments. CEO Mark Bristow made this announcement during a recent interview with Reuters.
Key Highlights:
Background of the Dispute:
Barrick has been embroiled in a conflict with the Malian government since 2023 over the enforcement of a new mining code.
In January, the government halted shipments from the Loulo-Gounkoto complex and confiscated three metric tons of gold, prompting Barrick to suspend mining operations.
Assurances from Malian Authorities:
Bristow stated that the seized gold, valued at approximately $245 million, is still owned by Barrick, according to assurances from the Malian government.
Market Response:
Following the announcement of a significant profit increase for 2024 and a new $1 billion share buyback, Barrick’s shares rose over 7% in New York trading.
Financial Contributions:
Barrick emphasized its financial contributions to Mali, having paid $460 million to the government last year and projected a potential contribution of $550 million in 2024 if operations had not been suspended.
Impact on Gold Output:
The company has revised its gold output forecast for the year to between 3.2 million and 3.5 million ounces, down from 3.9 million ounces last year and 4.1 million ounces in 2023.
Mali’s Mining Challenges:
Mali’s push for increased taxes and a larger state share in mining operations has strained relationships with investors, leading to a 23% drop in gold output to 51 metric tons last year.
Call for Independent Review:
Bristow proposed hiring an independent expert to review the ongoing dispute, suggesting that Mali’s new mining law imposes costs that could jeopardize the longevity of the Loulo-Gounkoto mine.
Consequences of Closure:
Both Barrick and Mali are suffering losses due to the mine’s closure, with Bristow highlighting that prolonged inactivity harms both parties.
He warned that investors might seek opportunities in other countries if the situation does not improve.
Future Considerations:
Barrick is uncertain about the long-term viability of keeping the mine closed, indicating that decisions may need to be made if the temporary closure extends beyond a few weeks.