Barrick Gold Corp. ABX-T is facing mounting pressure in Mali as the country’s military regime seeks to boost its control of the multibillion-dollar mining sector at a time of growing Russian influence over its economy.
Mali’s junta, which seized power in a coup in 2021 and later forged an alliance with Russian troops, has been targeting the mining sector for more than a year with a controversial audit of the industry and a new mining code to authorize greater state control of mining companies.
Now there are reports that the regime could be seeking to expropriate a key Barrick mining complex, Loulo-Gounkoto, one of the world’s biggest gold-producing mines. Toronto-based Barrick is declining to comment.
The reports coincide with renewed efforts by the regime to tighten its grip on the country. Last week, it suspended the activities of all political parties and banned any media coverage of political organizations.
Two publications, the Africa Report newsmagazine and the U.S. military publication Africa Defense Forum, have suggested that Mali’s military junta is targeting the Loulo-Gounkoto complex, which Barrick says has contributed more than US$1-billion to Mali’s economy over the past year.
The Malian government is closely allied with the Russian military, which provides thousands of soldiers to several countries in the region. Russian troops have been heavily involved in seizing mining sites in Mali and the Central African Republic in recent years, and the U.S. government has accused Russia of using African mining revenue to help finance its global military operations.
Barrick has already been grappling with Mali’s new mining code, which allows higher state ownership of some mines, and a new law requiring local content in the mining sector. Barrick says the code would not apply to pre-existing mining titles.
The government has also ordered an audit of the gold mining industry, leading to findings that Barrick has disputed. The government said last year that it will seek to recover hundreds of millions of dollars from the mining industry as a result of the review by government-appointed auditors.
In its annual report for 2023, Barrick criticized the findings of the draft report by the auditors, describing it as “legally and factually flawed and without merit.”
In earnings calls over the past eight months, Barrick chief executive officer Mark Bristow has repeatedly acknowledged that the company is facing unspecified “challenges” in its Mali operations.
Mr. Bristow has visited Mali twice since late January this year, always emphasizing the company’s huge contributions to state revenue.
In his January visit, he said Barrick’s mines have contributed a total of almost US$10-billion to Mali in the form of taxes, royalties, salaries and payments to local suppliers, providing 5 per cent to 10 per cent of the country’s GDP. Over its lifetime, more than 70 per cent of Loulo-Gounkoto’s economic benefits have gone to the government, he said.
In media presentations, Barrick says it contributed US$380-million to Mali’s government last year in taxes, royalties and dividends, compared to US$260-million in the previous year. Its gold production was about 684,000 ounces in both years, according to the presentations.
Africa Defense Forum, published by the Africa Command of the U.S. military, reported last week that Barrick’s gold mining complex in Mali is “in Russia’s crosshairs.” Citing the Africa Report article, it said the Mali authorities want to expropriate the Loulo-Gounkoto mine and remove Barrick from the mine. Both reports suggested that Barrick was the main target of a government attempt to renegotiate contracts with foreign mining companies after the recent audit.
The Globe and Mail sought a response from Barrick spokesperson Kathy du Plessis, but she declined to comment.
Liam Morrissey, a mining security analyst, said he is skeptical that Mali’s military officials would seize the Barrick mine. “They know that if there is major change imposed on the mining sector there will be an overnight collapse,” he told The Globe.
In January, Russian soldiers took control of the Intahaka gold mine, the largest artisanal mine site in northern Mali. The government has also signed an agreement with Russia to build a gold refinery in the capital, Bamako, with a capacity of 200 tonnes a year. And it signed a separate deal with Russia to allow its state nuclear company, Rosatom, to explore for minerals and produce nuclear energy.
Russian mercenaries, employed by the Kremlin-linked Wagner Group, captured a Canadian-owned mine in the Central African Republic in 2020. The mine later became a key source of revenue for Russia’s international military operations, according to the U.S. Treasury Department, which imposed sanctions on a Russian mining company in the country. Vancouver-based Axmin Inc. is seeking compensation for the loss of what was its biggest African gold mine.
Human-rights researchers, in a report in December called the Blood Gold Report, said Barrick is indirectly helping to finance the Russian soldiers in Mali. The military regime is paying a reported US$10-million a month for the Russian military assistance.
Mr. Bristow, in an exchange of letters with the researchers, said Barrick does not engage directly with the Russians, and there are no sanctions to prevent it operating in Mali. “We do not get involved with geopolitics,” he said.
With a report by Niall McGee in Toronto
Geoffrey York