Barrick Gold’s CEO Mark Bristow reflects on past disputes with African governments amidst a recent $438 million settlement with Mali to resolve a nearly two-year mining operations suspension. The agreement followed allegations of unpaid dues and shifted the dynamics of Western mining operations as African states push for greater resource control. Mali’s junta’s tightening grip on the sector, alongside broader regional trends, indicates a significant shift in the mining landscape towards nationalism and geopolitical realignment.
Mark Bristow, the CEO of Barrick Gold, known for navigating disputes with African governments, addressed past conflicts with Tanzanian and Congolese leaders during an interview at an African mining conference in Cape Town. He described an arrest warrant from Mali accusing him of money laundering as a typical risk of operating in challenging markets, emphasizing that dialogue is crucial in resolving such disagreements. “Mining is a long-term game,” he stated.
Following negotiations, Barrick and the Malian government agreed on a solution to a two-year dispute that had suspended mining operations critical to Mali’s economy. The government had accused Barrick of unpaid dues, initially demanding $500 million that swelled to $5.5 billion. The final agreement resulted in Barrick paying $438 million, while the Malian government released detained employees and returned confiscated gold ore.
The agreement underscores the growing challenges faced by Western mining companies in Africa as governments revise mining codes to extract higher revenues and ownership stakes. Multiple African nations, driven by increased demand for minerals, are realigning their policies. In Mali, Burkina Faso, and Niger—collectively termed Africa’s coup belt—this resource nationalism is particularly prominent, as these nations are aligning themselves with Russia and distancing from Western influence.
Mali’s junta, which came to power in 2020, has enacted tighter controls over its mining sector. The junta conducted an audit that claimed a near $1 billion revenue loss, leading to a revised mining code that increased state ownership in mining projects dramatically. This new code, controversially applied retroactively, aims to enforce stricter compliance, while Mali has also amassed significant tax payments from mining firms ahead of the Barrick agreement.
The neighboring countries have taken similar steps; Niger revoked Orano’s mining license amid ongoing legal issues, and Burkina Faso nationalized two mines while seizing gold from a Canadian company. Concerns have surfaced regarding these juntas’ motivations, characterized by increased hostilities toward Western nations and a pivot toward Russian support. The influence of countries like Russia, China, and Turkey is rising, presenting a complex dynamic in mining relations.
While geopolitical motives are present, financial imperatives remain critical. The economies of Mali, Burkina Faso, and Niger face significant challenges requiring increased revenue. Mali has introduced new taxes and faced public frustration over rising tax burdens. Local economist Modibo Mao Makalou acknowledged that reforms to benefit the government’s fiscal health were necessary despite potential downsides.
The Malian government’s strategies may have adverse long-term effects on its economy. A reported decline in gold production suggests hesitance from major investors like Barrick and reflective caution from smaller firms. Robex Resources announced plans to divest from its mining operations in the region, signaling potential risk to an economy heavily reliant on mining. “You can destroy it in a heartbeat,” cautioned Bristow.
Despite tensions, many Western mining firms continue operations in the Sahel, as evidenced by positive relations between Canadian miners and Burkina Faso’s junta. Barrick remains committed to negotiations that could align state interests with operational viability, demonstrating a willingness to discover mutually beneficial financial arrangements. “I am very happy to search for ways for the state to get more of the [tax] take,” Bristow stated.
In summary, Barrick Gold’s recent agreement with Mali’s government reflects the intricate dynamics of mining operations in Africa amidst rising nationalism and geopolitical shifts. The Malian junta’s increased control over the mining sector poses challenges for foreign investors but illustrates the delicate balance between state interests and economic stability. The future of mining in the region relies on effective dialogue and cooperation between governments and mining companies.
Original Source: www.techinafrica.com
