Mali’s government has begun seizing gold stockpiled at Barrick Gold’s (TSX:ABX,NYSE:GOLD) Loulo-Gounkoto mine, enforcing a provisional order issued last week amid a dispute over changes to the nation’s mining rules.
The enforcement began on Saturday (January 11), as per Barrick’s memo, which notes that the company may be compelled to suspend operations at the site if the issue remains unresolved.
Loulo-Gounkoto contributes significantly to Barrick’s global production, and is set to account for about 14 percent of its gold output for 2025. Barrick has an 80 percent stake, with the Malian government owning the remaining 20 percent.
While Barrick has not disclosed the exact volume of gold affected, internal estimates suggest that around 4 metric tons of gold, valued at approximately US$380 million based on the current spot price, are at stake.
The move comes amid ongoing tensions over the Malian government’s claims of unpaid taxes and dividends. Mali claims the company owes US$512 million in unpaid taxes and dividends, a claim Barrick has rejected.
Gold is Mali’s primary export, contributing over 80 percent of the country’s total export revenues in 2023. The West African country’s government has been led by the military since a 2021 coup.
In 2023, Mali introduced a new mining code that aims to raise its stake in mining operations from 20 to 35 percent. It also allows the government to collect 7.5 percent of sales revenue when the gold price exceeds US$1,500 per ounce.
Last year, following an audit into the mining sector, Mali began pursuing alleged back taxes and dividends owed by international mining companies working in the country.
Barrick’s dispute remains unresolved at this time.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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