In a recent escalation of the ongoing dispute between the Malian government and Canadian mining company Barrick Gold over mining revenues, authorities in Mali have taken the drastic step of shutting down Barrick Gold’s office in the capital city, Bamako.
The closure was due to alleged non-payment of taxes by Barrick Gold, Reuters quoted two sources as saying in a report.
This move highlights the Malian government’s increasingly assertive stance in ensuring that mining companies operating within its borders fulfil their tax obligations and contribute their fair share to the country’s revenue.
The closure of Barrick Gold‘s office is likely to have significant implications for the company’s operations in Mali and could potentially lead to further disruptions in the mining sector.
Ongoing dispute since 2023
The dispute between the Toronto-based mining company and the government of Mali has been ongoing since 2023.
The disagreement centers around the implementation of Mali’s recently revised mining code.
This new code grants the Malian government a larger share of the profits generated from the gold mine, a move that has been met with resistance from the Canadian mining company.
While governments seek to maximise their share of natural resource wealth, mining companies aim to protect their investments and ensure profitable operations.
Loulo-Gounkoto mine
The closure did not impact Barrick’s Loulo-Gounkoto mining complex in western Mali, which has been closed since mid-January.
However, staff in Bamako are unable to access the office building, according to one source.
On February 19 that Barrick had signed an agreement to end the dispute, which is awaiting approval from the Malian government, according to the report.
The two sides had been negotiating to resolve the dispute. The dispute is expected to be resolved as early as next week.
The operations at the Loulo-Gounkoto complex had been temporarily halted due to a governmental seizure of approximately three metric tons of gold stock in January.
The government’s justification for this seizure was the company’s alleged failure to meet its tax obligations.
It is important to note that this specific tax dispute is distinct from the one that resulted in the recent office closure, as indicated by one of the sources in the report.
Temporary transfers
The Malian government, which assumed control following a series of coups in 2020 and 2021, had implemented a blockade on Barrick’s gold exports starting from early November.
This action severely impacted the company’s operations and financial stability, as it was unable to generate revenue from its gold mining activities.
The blockade also strained the relationship between the company and the Malian government, potentially leading to further complications and disruptions in the future.
Around 40 Malian employees from the Loulo-Gounkoto complex are being transferred, at least temporarily, to Barrick’s Kibali mine in the Democratic Republic of Congo.
This is only the first wave of transfers; a total of 100 Malian staff have been identified for relocation, which suggests that operations at the Loulo-Gounkoto complex are unlikely to restart in the near future.
The post Why Malian government is shutting down Barrick’s Bamako office? appeared first on Invezz