Mali’s government has begun seizing gold stockpiled at Barrick Gold’s (TSX:ABX,NYSE:GOLD) Loulo-Gounkoto mine, enforcing a provisional order issued last week amid a dispute over changes to the nation’s mining rules.
The seizure was confirmed by Barrick in a memo to staff, according to a Monday (January 13) Reuters report. The military-led government continues to claim a greater share of mining revenues from foreign operators.
The enforcement began on Saturday (January 11), as per Barrick’s memo, which notes that the company may be compelled to suspend operations at the site if the issue remains unresolved.
Loulo-Gounkoto contributes significantly to Barrick’s global production, and is set to account for about 14 percent of its gold output for 2025. Barrick has an 80 percent stake, with the Malian government owning the remaining 20 percent.
While Barrick has not disclosed the exact volume of gold affected, internal estimates suggest that around 4 metric tons of gold, valued at approximately US$380 million based on the current spot price, are at stake.
Multiple sources told Reuters on Monday that around 3 metric tons had already been seized from the site by helicopter as of Saturday, with one source valuing the seized gold at US$245 billion.
The move comes amid ongoing tensions over the Malian government’s claims of unpaid taxes and dividends. Mali claims the company owes US$512 million in unpaid taxes and dividends, a claim Barrick has rejected.
On January 6, the company warned it would have to halt operations if the government continued to restrict gold shipments. Barrick is seeking arbitration through the International Center for the Settlement of Investment Disputes.
The conflict has led to multiple detentions of Barrick executives, with the most recent occurring in November, after negotiations between broke down. In early December, the country issued an arrest warrant for CEO Mark Bristow.
Mali changes mining code post-coup
Gold is Mali’s primary export, contributing over 80 percent of the country’s total export revenues in 2023. The West African country’s government has been led by the military since a 2021 coup.
In 2023, Mali introduced a new mining code that aims to raise its stake in mining operations from 20 to 35 percent. It also allows the government to collect 7.5 percent of sales revenue when the gold price exceeds US$1,500 per ounce.
Last year, following an audit into the mining sector, Mali began pursuing alleged back taxes and dividends owed by international mining companies working in the country.
Finance Minister Alousseni Sanou said Mali expects to collect 750 billion CFA francs, about US$1.2 billion, from miners in the first quarter of 2025, following a similar collection of 500 billion CFA francs in late 2024.
Some companies have already come to agreements with the Malian government. For example, B2Gold (TSX:BTO,NYSEAMERICAN:BTG) reached a new agreement last September for its Fekola operations. It includes financial settlements and a commitment from Mali to expedite permitting for the Fekola underground mine.
Australia’s Resolute Mining (ASX:RSG,LSE:RSG) resolved a tax dispute with the government in November 2024 by agreeing to pay US$160 million after its CEO and two other executives were detained in Mali.
Barrick’s dispute remains unresolved at this time.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
