Mali Government Threatens Barrick's Loulo Mine Permit Over Disputes On Economic Benefit Sharing

Mali's military government has warned that it may let Barrick Gold Corp's GOLD Loulo mine concession expire in 2026, citing unresolved disputes over the division's economic benefits from the country's second-largest mine.

Following allegations that Barrick failed to honor terms of the September agreement, in an October 18 letter to Barrick CEO Mark Bristow, as seen by Bloomberg, Finance Minister Alousseni Sanou stated that Mali "reserves the right not to renew the operating permit" and called for discussions on the mine's "transition phase" later this month.

Barrick and Mali's government declined Bloomberg's request for further comment on the dispute.

Barrick, which operates the Loulo mine as part of the larger Loulo-Gounkoto complex, countered by stating that it does not "accept any claims of wrongdoing."

The government demanded $512 million in back taxes and dividends, of which Barrick has paid $85 million, in the context of ongoing negotiations.

Following a 2020 military coup, Mali experienced a disruption in foreign aid and regional funding. The governing military junta updated the mining code, raising the state's potential stake in mining projects to 35% from 20%, shortening mining licenses to 10 years, and encouraging more Malian nationals in senior roles at foreign companies.

Barrick, which has operated in Mali for 30 years, asserts that it aims to continue negotiations with the government to reach a fair settlement on profit-sharing and other aspects of their partnership.

So far, the government has rejected their proposal to divide the economic benefit from the complex at 55-45 in the country's favor.

Meanwhile, the domestic political climate remained turbulent through 2024, with heightened instability in northern regions due to conflict involving various rebel groups, al-Qaeda-linked factions, and foreign mercenaries.

Though these conflicts have yet to affect the Loulo-Gounkoto complex due to its location near Senegal's border, Barrick CEO Mark Bristow has made multiple trips to the country to address the rising tensions and ensure stable operations.

Loulo-Gounkoto is one of the top tier 1 gold mines globally. It is critical to Barrick's portfolio and is projected to be its largest gold-producing site in 2024, reaching 510,000 to 560,000 ounces at a cost of $1,150 to $1,250 per ounce.

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