Barrick Gold (NYSE:GOLD)(TSX:ABX) has given Mali a week to remove gold exports limits and resolve a dispute over its Loulo-Gounkoto mining complex, in response to the country extending its shipping ban to include the site鈥檚 on-hand stock of the precious metal.
The fresh restriction, the world鈥檚 second-largest gold miner ,聽further disrupts operations and casts uncertainty over the future of one ofthe most significant mining ventures in Mali, which is ruled by a military government.
Barrick鈥檚 president and chief executive, Mark Bristow, voiced strong opposition to the order, deeming it 鈥渦nwarranted鈥� and contrary to the dispute resolution mechanisms agreed upon with the Malian government.
The Canadian miner has been embroiled for months in a dispute with the government over the division of economic benefits from the Loulo-Gounkoto complex, which in 2023 produced nearly 700,000 ounces of gold. Shipments of gold have been restricted since聽early December.
鈥淭he inability to ship gold not only affects operations but has broader implications for the local economy, the 8,000 employees, and the many local service providers,鈥� Bristow said in a statement.
He warned that if the issue is not resolved within a week, Barrick will be forced to temporarily suspend operations鈥� a move he described as 鈥渄eeply regrettable but necessary.鈥�
Barrick submitted in December a request for arbitration through the International Centre for the Settlement of Investment Disputes (ICSID), while seeking to negotiate a memorandum of agreement with the Malian government. The document aims to resolve disputes, redefine their partnership, and increase the state鈥檚 share of the benefits from Loulo-Gounkoto.
Despite these efforts, tensions remain high. The situation is further complicated by the continued detention of several of Barrick鈥檚 Malian employees on what the company describes as 鈥渦nfounded charges.鈥�
Shaky ground
The blockade of gold shipments and the tense standoff with authorities come at a critical time for Mali鈥檚 mining industry. As the country navigates the complexities of political instability and a revamped regulatory framework, the fate of one of its most significant economic drivers hangs in the balance.
Barrick鈥檚 Loulo-Gounkoto complex, developed during Bristow鈥檚 tenure as CEO of Randgold before its acquisition by Barrick in 2018, is a cornerstone of Mali鈥檚 economy. Over the past 29 years, the company has invested more than $10 billion in the country, contributing between 5% and 10% of Mali鈥檚 GDP annually. Last year alone, Barrick injected over $1 billion into the local economy.
The mine complex is also one of Mali鈥檚 largest taxpayers and employers, with 97% of its 8,000-strong workforce being Malian nationals. According to Barrick, more than 70% of the economic benefits from the complex have gone directly to the Malian state.
鈥淲e are committed to dialogue and finding a mutually acceptable resolution that allows us to secure the future of Loulo-Gounkoto as a vital economic contributor to Mali,鈥� Bristow reiterated.