Monday, December 16, 2024

Barrick faces challenges in Mali negotiations

TORONTO, Canada

Barrick Gold Corporation, the mining giant with a market capitalization of $29.36 billion and an overall great financial health score according to InvestingPro, today reported ongoing disputes with the Government of Mali regarding the Loulo-Gounkoto mining complex, despite efforts to reach a resolution.

According to a press release made available  today, Barrick has made numerous attempts over the past year to negotiate a Memorandum of Agreement with the junta government, offering significant concessions, but the proposals have been rejected.

The Government of Mali, which owns a 20% stake in Loulo-Gounkoto, has been receiving the majority of the economic benefits from the mine.

Despite this, the government is applying the 2023 Mining Code to the complex, which Barrick says should not apply to existing operations. 

Barrick said in the statement that local operating conditions have worsened, with unwarranted imprisonment of Barrick employees and blocked gold shipments. 

"If these blockades continue, Barrick may have to suspend operations, threatening the economic contribution the mine provides to Mali." It said.

Over its 29-year presence in Mali, Barrick has invested over $10 billion, with the mines contributing between 5% to 10% of the country's GDP annually. 

In 2023 alone, Barrick's contribution exceeded $1 billion. The company maintains strong operational efficiency with revenue of $12.34 billion in the last twelve months and operates with moderate debt levels. 

InvestingPro analysis reveals the company has maintained dividend payments for 38 consecutive years, demonstrating long-term financial stability. 

The Loulo-Gounkoto complex is one of Mali's largest taxpayers and employers, with a workforce of 8,000, 97% of whom are Malian nationals. The Malian state has garnered more than 70% of the economic benefits from the complex to date.

Recent actions against Barrick's Malian management team, including imprisonment on unfounded charges and the reported issuance of an arrest warrant against Barrick's President and CEO, have raised serious concerns about the misuse of the criminal justice system in Mali.

Mark Bristow, Barrick's President and CEO, emphasized the company's commitment to Mali and its openness to constructive engagement with the government.

However, he also noted that recent developments have eroded investor confidence and could deter future investment in Mali's mining sector.

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