For all the gold in Mali

In early January, three metric tonnes of bullion extracted by Canadian company Barrick Gold were seized by the Malian authorities. The value of gold has skyrocketed on world markets. There are likely to be significant reserves throughout the region. And tensions between miners and authorities are at boiling point. The aim is to improve profit distribution. It remains to be seen who stands to gain.

After months of conflict with Barrick Gold executives, the Malian authorities have opted for a strong-arm approach to recover what they consider to be their due. On Saturday 11 January 2024, at the Loulo-Gounkoto mining complex in the west of the country, two air force helicopters came to forcibly remove around three metric tonnes of gold extracted in recent months by the Canadian company, which owns 80% of the deposit. Several sources speaking to Reuters have estimated the cargo to be worth around 245 million dollars. On Monday 13th, Barrick announced that it was ‘temporarily suspending’ its mining operations in the country. The authorities have announced that the seized gold has been deposited at the Malian Solidarity Bank (BMS).

This socially-oriented institution was established in 2002 to combat poverty and support micro-enterprises. The message from the transitional president, Assimi Goïta, is clear: in accordance with the credo of the putschist colonel, the state is taking from foreign multinationals in order to return to the people their ‘regained sovereignty’. “An important warning,” emphasises mining sector expert Christian Mion, senior partner at Ernst & Young. An anonymous source close to the case tells us, however, that he has ‘hardly any illusions’ about the final destination of the funds deposited at the BMS, more likely to go ‘to the great washing machine of Dubai’, where most of the African gold transits, than to really benefit the Malian population. In a report published in May 2024, the NGO Swissaid estimates that, on average, more than a tonne of gold – 40% of the continent's production! – leaves Africa every day without being legally declared, most often transiting through Dubai before being shipped back to Switzerland. This seizure came as no surprise: tensions had been mounting for months between the Malian state and the Canadian company. Bamako is demanding that the Canadian company apply the new national mining code.

In 2022, the government commissioned an audit report from Iventus Mining, a consulting firm, to ensure that ‘gold shines for all Malians’ and that the country takes full advantage of this resource, a safe haven whose price has more than doubled in fifteen years. Delivered in March 2023, the audit assesses the shortfall in earnings at between 300 and 600 billion CFA francs (450 to 900 million euros) for Mali, ranked 188th out of 193 countries by the United Nations in terms of its human development index (HDI). Until colonisation, gold had ensured the country's prosperity: legend has it that in 1324, the extremely wealthy mansa (emperor) Moussa spent so much of this yellow metal during his pilgrimage to Mecca that he destabilised the entire economy of the region! With 66.5 tonnes mined in 2023, Mali is the continent's third largest producer, behind South Africa (92 tonnes in 2022) and Ghana (105 tonnes). This resource accounts for 70% of its exports, 25% of its tax revenue and 10% of its GDP. These figures do not take into account the smuggling of an estimated 26 tonnes of gold per year extracted from artisanal mines, particularly the Intahaka mine. Thousands of gold miners, sometimes coming from as far away as Sudan, work tirelessly with pickaxes in precarious tunnels, before - for the lucky ones - reselling flakes and nuggets to dubious middlemen.

MORE BALANCED CONTRACTS

All of West Africa is experiencing a veritable gold rush, with its procession of Wild West-style evils - smuggling, pollution, landslides (dozens of deaths and disappearances on 29 January in Koulikoro, a year after a similar accident that claimed 74 lives in January 2024 in the same region), gangs, prostitution, etc. Although West African gold production is still far behind the global giants (370 tonnes in 2023 for China, 310 tonnes for Australia and Russia, 200 tonnes for Canada, 170 tonnes for the United States, etc.), the region has significant deposits, whether in Burkina Faso, Guinea, Côte d'Ivoire, Niger, Senegal, etc. In Côte d'Ivoire, Canadian company Montage Gold estimates the ‘Koné project’ veins, from its mine located in the Woroba district in the west of the country, at 155 tonnes. Senegal loses out because its deposits in the Kédougou region, which borders Mali and Guinea, are located on the border: 12.4 tonnes were extracted in 2024 from the Sabodala-Massawa mine, but Swissaid estimates that in ten years, ‘between 36 and 41 tonnes’ have been illegally exported from the hundreds of artisanal wells!

Unable to control the smuggling, Mali, faced with declining production (only 57.3 tonnes estimated in 2024, due to lower yield from the veins), intends to at least wrest a rebalancing of the contracts from the multinationals. Hence this overhaul of the mining code. “A country's mining code is often set in stone,” explains Christian Mion. “It is a body of regulatory texts and guidelines written to last ten years, fifteen years or more. Mining codes therefore do not take into account geopolitical developments or changes in the price of raw materials, such as the surge in the price of an ounce of gold or, conversely, the plummeting price of cobalt. These mining codes are not imaginative or disruptive enough to put in place mechanisms that would provide, for example, for an update every three years.” In August 2023, the country therefore voted for a revised document based on the audit's recommendations. The new text benefits the public authorities and local communities more: foreign operators of the country's gold mines must now give up 10% of their shares to the Malian State free of charge, which can buy an additional 20% if necessary. Local investors are guaranteed a 5% share in the project, and the operating company must pay a contribution to the Malian Local Mining Development Fund equivalent to 0.75% of the mine's quarterly turnover. In addition, tax exemptions have been abolished, profits must be transferred to bank accounts domiciled in Mali, exploration licences are now issued for nine years and operating licences for twelve years.

A LEGAL TUG-OF-WAR

Bamako intends to ensure that this new code is applied by all mining companies operating in the country, with the aim of increasing state revenues by more than 500 billion CFA francs. Most of them have complied with the new regulatory framework. In September 2024, the Canadian company Robex, for example, reached an agreement to settle its arrears (taxes and customs duties) by paying the tax authorities 10 billion CFA francs and waiving the reimbursement of 5 billion CFA francs of VAT credit. It has also announced that it wants to sell its Malian mine in Nampala (6.5 tonnes of gold extracted since 2017) to focus on the Kiniéro site in Guinea, a move that looks very much like an abandonment of the site. Others have been subjected to intense pressure and intimidation: in November 2024, the CEO of Australia's Resolute Mining, Terence Holohan, and two of his employees were arrested in Bamako for ‘alleged forgery and damage to public property’ and were subsequently imprisoned for twelve days. The company decided to pay 160 million euros to the Malian state. Meanwhile, the CEO of Canadian company B2Gold, Clive Johnson, has just presented a 10 million dollar investment plan for exploration of the Fekola gold site, after reaching an agreement with the authorities and settling the required tax arrears. A well-informed source estimates that the state has managed to obtain no less than 1,000 billion CFA francs (1.5 billion euros) from the mining sector in recent months.

However, the Barrick Gold case is more complex. This gold and copper mining giant, born of the 2018 merger of South Africa's Randgold with Canada's Barrick and listed on the New York Stock Exchange, extracted some 20 tonnes from the Loulo-Gounkoto mine in 2023, representing almost a third of Mali's gold production. Confident of his power and rights, the boss, Mark Bristow, a 66-year-old South African, refuses to comply with the new mining code. In a press release issued in September 2024, the group was confident of its ‘thirty-year mutually beneficial relationship’ with the Malian authorities, ‘despite occasional differences’, which were ‘all resolved amicably’. The payment of 85 million dollars to the state was not enough: on 23 October, Bamako accused the Canadian group of ‘not honouring its commitments’, demanded 300 billion CFA francs (512 million euros) in taxes and dividends, and banned it from exporting its gold. “The government continues to work towards a mineral resource industry that takes into account the interests of the population and workers,” commented the authorities. In November 2024, four Barrick Gold employees were arrested and imprisoned in Bamako, while an arrest warrant removed its CEO from Malian territory. In December, the company filed an appeal with an international arbitration body linked to the World Bank, the ICSID (International Centre for Settlement of Investment Disputes). But on 2 January 2025, Judge Boubacar Moussa Diarra ordered the seizure of Barrick's gold stocks, arguing that the Canadian company owed Mali a whopping 5.5 billion dollars (ten times the amount estimated in October 2024). “Mark Bristow knows how to negotiate with people who have the same codes as him, who play by the same rules. But when faced with the junta, he is at a loss,” a well-informed source told us. “Bristow is relying on the law, on the contracts signed prior to the new mining code adopted in 2023. This is the legal principle of the non-retroactivity of laws. But these legal subtleties are of little importance to the military junta that staged the coup.”

PENDING A DECISION

There is a personal aspect exacerbating this commercial dispute. Iventus Mining's auditors, whose report inspired the new mining code, are old acquaintances of the South African mining magnate. Mamou Touré and Samba Touré (not related) had worked for Randgold and left Mark Bristow on bad terms... Samba Touré is also head of Sorem, the Malian mineral research and mining company, a holding company created in 2022 to manage the state's holdings in the mines. Between Iventus and Sorem, ‘the risk of a conflict of interest is blatant’, according to this observer. “The wolf is in the sheepfold, because regulation has been entrusted to a player interested in the profits.” Sorem notably manages two recently nationalised mines: Yatela, sold in October 2024 by South Africa's AngloGold Ashanti and Canada's Iamgold, and Morila, sold in May of the same year by Australia's Firefinch. However, in Bamako, the stranglehold on the mining dossier of the two Tourés and the Minister of Economy and Finance, Alousséni Sanou, is becoming a source of irritation: the Minister of Mines, Professor Amadou Keita, is said to be ‘frustrated because he has become a mere spectator’ in the face of the prerogatives of Sanou, ‘a childhood friend of Colonel Goïta’. “There are opposing factions within the government, which should not be imagined as a monolithic block,” the source said. In desperation, Barrick Gold filed an appeal with the ICSID in December 2024, a body renowned for its defence of investors and regularly criticised by several NGOs for its lack of consideration for the interests of states and local communities as well as for social and environmental issues. The neoliberal and pro-business culture of the ICSID makes arbitration in favour of the Canadian multinational very likely. But in recent years, states such as Evo Morales' Bolivia and Chavist Venezuela have withdrawn from the Washington Convention which, since 1965, linked them to the international body, perceived by their socialist governments as an instrument of ‘imperialism’; there is no guarantee that Mali, which advocates ‘regained sovereignty’, will agree to submit to unfavourable arbitration imposed in an office in Washington... “It is notoriously difficult to enforce an ICSID ruling against a sovereign African state,” emphasised Tiffany Wognaih, senior associate specialising in Africa at the British law firm J.S. Held.

The real concern for Bamako is that such an arbitration procedure could drag on for years, causing the Loulo-Gounkoto mining complex to fall into a state of lethargy. “No serious mining player will take the risk of replacing Barrick at Loulo while awaiting the verdict, as they would be sanctioned,” warns a source close to the case. “Mali is very important for Barrick Gold, but by the same token Barrick Gold is very important for Mali,” continued the source. In the event of a prolonged stalemate, “the balance of power, which currently favours the junta, could tip in Barrick's favour. Because if Barrick does not return, there is a risk of ‘killing the goose that lays the golden egg’.” According to this source, “the junta is blinded by its success against Barrick. The victory was easier than expected and is paying off politically because it responds to the frustrations of the population. But beware, if Barrick Gold leaves Mali, problems will arise in the medium and long term: export taxes, royalties, not to mention the 7,000 to 8,000 employees and service providers at its Malian mines. The Malian tax authorities are already concerned about this.”

INTEREST FROM ASIA

There is also a risk of scaring off foreign investors. “For a state, the use of strong coercive measures can indeed frighten FDI (foreign direct investments),” emphasises Christian Mion. In this regard, he points out that “international insurers scrutinise all events that take place in a country. For example, Tanzania is struggling to restore its image after its mining policy of 2017”. However, he says he is confident that Mali and Barrick will eventually find a solution, as the stakes and the risks of loss are high for both of them. “This appeal filed with the ICSID can always be withdrawn. In the chess game between Barrick and the state, it is a pawn on the board,” he says. On 28 January, Barrick and the junta effectively resumed their talks under the aegis, according to Reuters, of ‘two former employees’. Bamako is reportedly demanding payment of 199 million dollars in exchange for the return of the 3 tonnes of gold seized in early January.

Could Russia, Mali's main ally since the 2020 and 2021 coups, take advantage of the weakened position of Canadian, Australian and South African mining companies? In its 17 January 2025 edition, Le Monde reported that Sergei Laktionov, the Wagner paramilitary group's chief geologist, had ‘clearly expressed his views on the Loulo-Gounkoto mining licence to the Malian authorities’ as early as 2022. Sorem will also prospect the Intahaka artisanal site, which is operated under chaotic conditions by illegal gold miners and is of interest to Wagner. The gold mined by Wagner-linked companies in the Central African Republic, Sudan and Mali is estimated to have earned Russia 2.5 billion dollars in less than two years, according to a report by the independent expert group The Blood Gold. Christian Mion, who is well acquainted with the Guinean mining sector, where Russian companies have historically had a strong presence, is nevertheless “not convinced that Mali wants to favour Russia's mining interests. In geopolitical terms, it is always more prudent to preserve what has been achieved”. He therefore doubts that “Mali is embarking on a delicate adventure”. Chinese players, on the other hand, are interested in Burkina Faso's mines. After having long been one of Taiwan's last partners on the continent, Burkina turned to Beijing in 2018. Chinese investor Li Yubao, who became a naturalised Burkinabe citizen in 2022, was appointed ‘special advisor in charge of investment and resource mobilisation’ to the president in June 2024. In a recent interview with the newspaper Sidwaya, he stated that he wanted to invest in the gold deposits of his adopted country, aiming for ‘a production of 150 tonnes of gold’, three times more than at present, to ‘enable the population to benefit from the spin-offs’.

In a multipolar world in crisis, gold is a true safe haven, attracting the ambitions of a growing number of players. For Mali, as for other African countries with a wealth of gold deposits, the challenge over the next few years will be to establish their economic sovereignty – with all that this implies in terms of tax revenues and local development – without scaring off investors, by guaranteeing them profitability and security. “A fair balance must be found, and more subtle negotiation is required,” emphasises one observer. “Botswana, with its diamonds, and Gabon, for its oil, are cases that demonstrate that it is possible to pursue a sovereignist policy while respecting the law.” “When you go to the market, you compare offers,” concludes Christian Mion. “Each of the 54 countries on the African continent positions itself with its own culture, history and background, to claim its place at the big table.”