Barrick challenges Mali's attempt to control Loulo-Gounkoto gold mine

TORONTO, Canada

Canadian gold giant Barrick (TSX: ABX; NYSE: B) is pushing back against an attempt by the Malian government to wrest control of the Loulo-Gounkoto mine complex away from the company.

Mali earlier this month formally asked a local court to impose provisional administration over the site – a request that Barrick opposes. A ruling by the president of the Bamako Commercial Tribunal following submissions made on May 22 is due June 2, Barrick said Monday in a statement.

Barrick suspended operations at Loulo-Gounkoto, its largest African asset, in January after Mali’s government seized around three tonnes of gold over alleged unpaid taxes.

Four Barrick employees have been held for over five months, a move that the company calls “unlawful,” and authorities have been blocking the company’s gold exports since November.

“There is no basis – either in law or in practice – for the day-to-day operations at Loulo-Gounkoto to be handed over to a court appointed interim administrator,” Barrick said in the statement.

“The attempt to interfere with Loulo-Gounkoto’s operations is without precedent or lawful justification.

It disregards Barrick’s rights under both Malian law and binding agreements, and it is inconsistent with the principles of due process and mutual respect that should underpin partnerships between governments and long-term investors.”

Barrick is paying about $15 million a month in upkeep and salaries while losing $1.24 billion a year revenue.

The company, which called the suspension “reluctant,” has removed the complex from its production forecasts until 2028.

As recently as last week, Barrick wrote to the Malian Minister of Economy and Finances to reiterate its availability to resume talks on the terms of a satisfactory agreement allowing for the release of the detained employees and the resumption of activities.

Discussions with the regime have been stymied by lack of mining expertise on the government’s side, according to Barrick CEO Mark Bristow.

“The numbers are all very muddled, because there are the settlement payments that we’ve been arguing about – it’s just a knockdown, somebody came up with a number – and then there’s legitimate tax revenues that, of course, you would pay and, and just to put it in context, if we had been operating all year to date, we would have paid a lot more than that in taxes,” Bristow told The Northern Miner in an interview earlier this month.

Barrick has been operating in Mali for nearly three decades. The company doesn’t want to put the site into full care and maintenance even though it would be at half the cost, Bristow said.