BARRICK Gold CEO Mark Bristow said there was scope for negotiation with Mali’s military junta regarding its recently promulgated Mining Code. “It all hinges around dialogue,” said Bristow in an interview today.
On August 29, Mali’s interim President Assimi Goita signed into law a new mining code which will enable the state and local investors to take stakes in mining projects as high as 35% compared with 20% previously. This would more than double the sector’s contribution to Mali’s gross domestic product to around 20% and allow Mali to address a shortfall in production revenues, the government has said.
However, Bristow said recent discussions had shown the government its revenue targets were not entirely viable. “One of first comments from the government is that they are looking to increase revenues by more than total revenue before costs.
“We have had this conversation and consequence of that is that we walked back some of the components of mining code,” he said.
“One of them was the retroactive effects of the code. Until your current conventions expire you can operate under the existing code,” Bristow said.
There were other unaddressed issues with the code, however. One was the pressure on certain taxes that are not protected in the code. “We are working on that, but at the end of the day it is an education.”
Bristow said he’s told the junta that future mining projects might not fly if the code was applied in its current form. Barrick said in October that Loulo-Gounkoto had identified a number of new “priority targets” for exploration after recently confirming a 10-year life for the complex based on existing economic reserves.
“It takes time for people to really comprehend that because these are not economists or miners, but military people. They are all colonels. You have to take time to understand the model,” he said.
“My view is that we have got time to talk and to find a solution while at same time [appreciating that] Mali is constantly on the look out for support and better tax revenue.”
“Mining needs ongoing capital investment and Mali always been a place where the country has respected it owns laws. This is a change in law, but it is still respecting the law of the past. What we have to do is find ways as to what will be better for the government, and equally supportive of growing the industry and enabling it to replace reserves it’s mining.”
Bristow was commenting following the release of Barrick’s third quarter results in which it reported a quarter-on-quarter increase in net earnings of 21 US cents a share (Q2: 17c/share) and adjusted net earnings of 24c/share (19c/share).
Net debt as of end-September totalled $514m compared to $617m at the end of June.
Gold production was relatively flat at 1.04 million ounces for the quarter but Barrick said it would probably undershoot the lower end of guidance for the year.