Mali’s state takes ownership of the gold complex owned by Barrick Mining

Canada’s Barrick Mining (ABX.TO) has had its Loulo-Gounkoto gold complex in Mali placed under state control by a court on Monday, marking a significant escalation in a dispute regarding taxes and ownership.

The presiding judge announced that Soumana Makadji, a former Malian health minister, will assume the role of provisional administrator for a duration of six months.

Barrick announced its intention to appeal the decision.

The decision comes in response to the Malian government’s measures to halt gold exports and confiscate gold reserves owned by Barrick’s subsidiaries.

Barrick stated that it considers the actions leading to the temporary suspension of its operations to be unjustified.

“Justice was neither heard nor served,” stated Issaka Keita, one of Barrick’s lawyers, in an interview with Reuters. The Loulo-Gounkoto complex, responsible for 14% of the company’s output, has been on hold since January due to a standoff between the company and the government regarding taxes and ownership issues.

In May, the government, which holds shares in the mining complex, requested the Bamako Commercial Court to appoint an administrator, indicating its intention to reopen the complex in light of record-high global gold prices.

Barrick shares experienced a decline of 0.7% during early trading on Monday in Toronto.

A representative from Mali’s mines ministry chose not to provide any comments.

Should the mine be reopened, it has the potential to generate revenue of at least $1 billion in the coming year, based on estimates from Reuters, as gold prices continue to rise.

The standoff poses a risk of deterring potential investors in Mali, and Barrick’s shares have underperformed compared to its peers.

Negotiations between the two sides have been ongoing since 2023 regarding the implementation of a new mining code that increases taxes and allocates a larger share of the gold mines to the government.

They are working towards reaching an agreement on a new contract that aligns with the recent legislation.

According to sources with knowledge of the situation, Barrick’s mining licence in Mali is scheduled to expire in February 2026.

The company, previously known as Barrick Gold, halted operations at the complex in mid-January following the seizure of three metric tons of its gold stock by authorities. In November 2024, the government blocked its exports.

Barrick has subsequently excluded the complex from its total output forecast for 2025.

Negotiations between the two sides are ongoing outside of court. Mali has consented to permit Barrick to transfer 20% of its earnings into an international bank account, a privilege not extended to other foreign miners, according to two individuals knowledgeable about the situation.