Barrick Reaches $430 Million Deal to End Mali Gold Mine Standoff
Canadian mining giant Barrick Mining Corp. has finalized a substantial settlement with the West African nation of Mali, agreeing to pay 244 billion CFA francs (US$430 million) to resolve a contentious two-year dispute that had forced the closure of one of its most critical gold operations. The agreement, confirmed by sources familiar with the matter, marks a significant step toward normalizing relations and resuming full-scale production.
Breaking Down the Financial Terms
According to the detailed settlement, Barrick is obligated to make an immediate payment of 144 billion CFA francs within just six days of formally signing the agreement with the Malian government. A further 50 billion CFA francs will be settled through VAT-credit offsets. Notably, an instalment of the same size, 50 billion CFA francs, was already paid by the company last year, bringing the total financial resolution to the stated amount.
Operational Control Restored and Legal Battles Cease
As a direct result of this deal, Barrick will regain full operational control over the prolific Loulo-Gounkoto gold mine complex. In exchange, the Toronto-based company has agreed to withdraw all its arbitration claims against Mali. The Malian government, for its part, has committed to dropping all charges it had filed against Barrick. Crucially, the state will take the necessary legal steps to secure the release of four Barrick employees who were jailed during the height of the conflict.
Furthermore, Barrick has consented to operate under Mali's 2023 mining code, a key point of contention that originally sparked the dispute. This new code increases royalties and state stakes in mining projects. In a major win for the company, the operating permit for the Loulo gold mine, which was scheduled to expire in February, will be renewed for an additional ten years. The agreement also terminates the state's temporary control of the mine, clearing the path for Barrick to immediately resume full operations.
Market Reaction and Future Projections
The financial markets responded positively to the news of the resolution. Barrick's shares surged 8.5 per cent on the day the agreement was announced, reaching a 13-year high. This investor confidence is underpinned by the mine's significant production potential. Analysts from BMO Capital Markets projected that if operations restart swiftly, the mine could yield approximately 670,000 ounces of gold next year. This output is estimated to generate a substantial US$1.5 billion in operating cash flow for the company.
The dispute began when Barrick resisted the implementation of Mali's new 2023 mining code. In retaliation, Malian authorities demanded back taxes, detained company staff, issued an arrest warrant for former CEO Mark Bristow, and ultimately seized control of the mines. With this comprehensive settlement, both parties are moving forward, with Mali expecting to receive significant annual dividends, royalties, and stakes as outlined in the new mining code.
