TENSIONS between Barrick Gold and Mali were turned up a notch after the Canadian miner on Thursday denied government allegations it failed to honour an agreement aimed at ending a dispute between the parties.
L’Essor, a French-language daily in Mali, published a letter signed by Mali’s minister of economy and finances and minister of mines in which Barrick is criticised for not living up to commitments it made in an agreement on September 30, said The Globe and Mail.
The allegations were centred around Barrick’s social and environmental footprint. The ministers said there are “serious risks” related to Barrick operating in Mali, the paper said.
The September agreement, described by Barrick as “a framework” is, in essence, aimed at settling Mali’s claims of unpaid tax, according to a report by Reuters earlier this month. Mali is seeking at least $512m in outstanding taxes and dividends from Barrick, said the newswire citing three sources. The claims cover taxes owed from 2020, 2021 and 2022.
Commenting on the agreement today, Barrick said it was “intended to settle outstanding differences and to establish the principles that would guide Barrick’s partnership with the government in future, including an increase in the state’s share of the economic benefits generated by the Loulo-Gounkoto complex,” referring to Barrick’s 80%-owned, flagship 510,000 to 560,000 ounce a year mine.
Barrick added it had paid $85m in early October to Mali “in the context of the ongoing negotiations”. Citing an unnamed source, Reuters said Barrick was preparing to make a $300m to $350m payment to the government.
The broader context for the dispute goes back to political foment in Mali between 2020 (when President Ibrahim Boubacar Keita was overthrown) and 2021 with the ‘coup within a coup’ saw the current military junta installed.
Since then, Mali has been attempting to secure more revenue from mining companies involving, from time to time, to certain strong-arm tactics including the arrest of Mali-based employees of mining companies. Malians employed by Barrick were arrested last month.
Mali introduced a new mining code in 2023, increasing its ownership to 35% (from 20% under the old code) in new ventures, and sought to collect more taxes from mining companies. As part of this move, the junta rolled out an audit of existing mining contracts, including the possibility of discovering unpaid taxes.
In Barrick’s 2023 annual report, the firm said it received tax collection notices at the end of November 2023 for around $417m relating to VAT credit balances that had offset taxes and royalties but were subsequently disallowed by Malian authorities.
In September, another Canadian miner operating in the country, B2Gold, resolved a dispute with Mali enabling it to proceed with the extension of its Fekola gold mine.
