Barrick's Top Gold Mine Placed Under State Control

Mali's Bamako Commercial Court on Monday placed the Loulo-Gounkoto gold complex, one of Barrick Mining's B largest assets, into state control for six months. After a prolonged standoff over taxation, Mali appointed former health minister Suomana Makadji as provisional administrator.

"Justice was neither heard, nor served," Issaka Keita, one of Barrick's lawyers, said after the ruling, according to Reuters.

The Loulo-Gounkoto complex represents one of the largest mining operations in Mali and is a crucial component of Barrick's portfolio in Africa.

In 2024, it was responsible for 14% of Barrick's total gold production globally and generated $949 million in revenue during the first three quarters of that year.

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Barrick has subsequently excluded its Mali forecast from the production guidance due to the persistent uncertainty. The ongoing dispute between Barrick and the military-led government of Mali has been in effect since 2023, originating from the enforcement of a new mining code.

The revised legislation increases state participation in mining ventures and imposes higher taxes, with Mali seeking to increase royalties from 20% to 35%. While Barrick contends that it has honored its obligations under previous agreements, the government insists that renegotiation is necessary under the new legal framework.

Tensions escalated in late 2024 when officials prohibited gold exports and confiscated three metric tons of gold from Barrick's subsidiaries. In retaliation, Barrick halted operations in January.

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Despite both parties engaging in negotiations, Mali's decision to appoint a provisional administrator suggests its intention to resume mining operations, albeit under its own terms. 

Barrick has challenged the government's actions as "unjustified" and has stated its intention to appeal the court's decision. In the meantime, it is seeking international arbitration via the International Centre for Settlement of Investment Disputes.

"It requires a foundation of mutual respect, sound governance, and long-term partnership," the company said in its latest statement, while also condemning the detention of its employees as leverage in the negotiations.

Mali has struggled to maintain production levels as Africa's third-largest gold producer. Gold production in 2024 fell by 23% to 51 metric tons from 66.5 metric tons in 2023.

Price Watch: Barrick closed at $21.41, dropping 0.83% for the day. The stock is up 38.4% year-to-date.

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