Imbroglio over mineral permit forces B2Gold to take Mali Govt. to international court

Clive Johnson, CEO, B2Gold

CANADIAN gold miner B2Gold will start international arbitration proceedings against the Mali government after it was informed it would not be granted a one-year extension of a mining permit situated near its Fekola gold mine.

The permit in question is for access to the Menankoto part of the Anaconda deposit, about 20km from Fekola. B2Gold has so far spent $27m in exploration on the prospect during the last seven years and had earmarked a further $8.4m for exploration this year – roughly a third of its $26.4m exploration budget for Mali.

Based on B2Gold’s statement, issued on Thursday, the company appears to be caught in the cross-hairs of Mali’s political foment currently. Following the resignation of President Ibrahim Boubacar Keita in August last year, the country has been ruled by a military junta ahead of democratic elections next year.

However, these plans were thrown askance when its interim prime minister, Bah N’daw, and his prime minister were arrested. The junta has since recommitted to its timetable for elections, but the dispute with B2Gold hints at institutional lapse.

According to B2Gold, its Menankoto permit is subject to the country’s Mining Convention and stability clauses in the 2012 Mining Code. It nonetheless filed the permit extension in terms of the 2019 Mining Code but was subsequently informed part of the exploration area had been granted to a third party.

This action was reversed in March 2021 about eight months after B2Gold’s initial application, but then on June 18, the claim of the third party was reinstituted. This latter decision was, the Mali interim government argued, based on B2Gold’s subsidiary company – Menankoto S.a.r.l. – having been on the end of an unfavourable court decision related to the permit.

B2Gold’s riposte on Thursday was to say the court action referred to by the interim government was a function of its legal response to the initial rejection of the Menankoto permit extension, and that the court had not ruled in any case.

B2Gold said it would continue to engage with the Mali government. It reiterated its bona fides having generated $300m in state revenue as a result of Fekola’s production which comprised 27% of Mali’s industrial gold production in 2020 and employing about 2,200 people in Mali of which the majority were Malian.

Potential reserves and resources in the Menankoto permit were not part of Fekola’s current life of mine or production estimates – forecast to be 530,000 to 560,000 oz in 2021 – but failure to access the property could dent Fekola’s mineral potential.

Speaking in February, CEO Clive Johnson told a conference:

“When we bought Fekola we believed there was significant potential for more Fekola-style mineralisation in an area about 20km to the north called Anaconda which had already been identified by Papillon,” he told delegates at the Investment in Africa Mining Indaba.

“Last year, drilling operations there hit some significant sulphide intercepts below the mineralised saprolite zone and those intercepts are giving us the same kind of grades as the ones we saw in the early days on the main Fekola deposit when Papillon was drilling it.