Barrick Warns About Destabilization In Mali, Could Halt One Of Its Largest Mines

Barrick Gold Corp GOLD has warned it may suspend operations in Mali if the government continues to block gold shipments from its Loulo-Gounkoto mining complex, one of its largest operational gold mines.

Over the past months, the situation in Mali has escalated as the ruling military junta pushed for higher mining royalties. The Canadian miner described the situation as a "significant deterioration" in local conditions, citing the unjust imprisonment of employees and stalled negotiations.

"If shipments remain suspended, Barrick will be compelled to halt operations, further impacting the viability of this critical economic driver for Mali," the company said in a statement. Barrick has sought resolution through months of negotiations, offering concessions and engaging with Mali's government and advisors. Despite these efforts, no agreement has been reached.

Since Nov. 25, senior members of Barrick's Malian management team have been imprisoned, with CEO Mark Bristow facing an arrest warrant over alleged tax disputes. At the same time, Resolute Mining's RMGGY CEO was detained for 12 days before the parties reached a settlement.

Barrick's Lolo-Gounkoto is one of the top assets in its portfolio and produces nearly 700,000 ounces annually. Over the past 29 years, the company has invested more than $10 billion in Mali, contributing between 5% and 10% of its GDP annually. The complex also employs 8,000 workers, 97% of whom are Malian nationals, and generates over 70% of its economic benefits for the Malian state.

Besides Barrick and Resolute, notable foreign miners include B2Gold Corp BTG and Hummingbird Resources HUMRF. These companies contribute to Mali's position as one of Africa's largest gold producers, generating nearly 70 metric tons of gold yearly.

Bristow, famous for his diplomatic acumen, noted the company's commitment to Mali but pointed out that the ongoing crisis affects market sentiment.

"Recent developments further erode investor confidence in Mali's mining sector and will deter future investment. Nonetheless, in view of our long-standing commitment to the people of Mali, we remain open to constructive engagement with the government to resolve these issues while protecting the viability of this key economic driver for Mali," he said.

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