Barrick sees deal with Mali over new mining code before year-end

By Divya Rajagopal and Felix NjiniNovember 7, 2024

Souvenir luggage tags are displayed at a Barrick Gold Corp at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. 

REUTERS/Chris Helgren/File Photo 

Summary

Companies
Barrick has offered 55% economic interest in Loulo-Gounkoto

CEO says talks with Mali's government continue

Government has demanded alleged unpaid taxes, sources say

TORONTO, Nov 7 (Reuters) - Barrick Gold (ABX.TO), opens new tab, the world's No. 2 gold miner, is confident of concluding talks for a new mining code with Mali's junta-led government before the end of the year, CEO Mark Bristow told Reuters on Thursday.
Talks between Toronto-based Barrick and the authorities in Mali on how to implement new mining rules governing its Loulo-Gounkoto mining complex, one the biggest gold mines in Mali, have dragged on for months.

an country is demanding about $500 million in unpaid taxes from Barrick, Reuters has reported, citing sources, as the government tries to wring more income from the sector, which is dominated by gold miners, to shore up state revenues as prices of the precious metal rally.

Mali has been negotiating with miners in the country on how to apply new mining rules in which the state and local private investors must own a 35% interest in mining projects, up from 20% currently.

Bristow said Barrick had offered Mali 55% of the economic benefits from the Loulo-Gounkoto operation, in a deal that he said bore similarities to an agreement the miner reached with Tanzania about five years ago. The CEO declined to comment on Mali's cash demands and allegations of unpaid back taxes and fines.

"We are prepared to give them more of the economic benefits," Bristow said in an interview. "The key is you don't want to damage the long lasting value of the asset. The biggest sufferer will be the country, and any increase in basic cost has an impact on how long the projects will run."

While Barrick and Canadian miner B2Gold (BTO.TO), opens new tab are among Mali's biggest gold producers, they have recently faced pressure from the junta over unpaid back taxes following an audit of the sector.

B2Gold said in statement on Thursday it made a one-time tax payment of $30 million after an audit and the company would also advance an output expansion at its flagship Fekola mine.

B2Gold said in September the company would keep its 80% stake in Fekola, while the government holds the remainder.

While Barrick has offered a larger share of "economic benefits" to Mali, the company would continue to "carry the capital risk which we have always done", Bristow said, adding that talks were ongoing.

The CEO reiterated that Barrick would target to grow 30% organically, without the need for M&A, which would give it space to look at "external opportunities for the few (deals) that the company may need to have value creation criteria".