(Bloomberg) -- Barrick Gold Corp. said it’s suspending mining operations in Mali after the government started removing gold from the nation’s biggest mine in the latest escalation of a months-long dispute.
The world’s No. 2 gold producer is stopping activity at the vast Loulo-Gounkoto complex, the firm said in a statement on Tuesday. The move comes about a week after the company warned it would be forced to take such action if the authorities in the West African country continued to restrict exports and disrupt operations.
Shares of Barrick were little changed, trading at $15.45 at 10:10 a.m. in New York. The company’s stock has fallen more than 20% since Mali first threatened Barrick in October.
Barrick and Mali’s military rulers are locked in a standoff over the distribution of revenue from an asset that’s key for both the company and the government. The state has blocked Barrick from shipping the precious metal out of the country since November, started seizing gold stockpiled at the mine and put out an arrest warrant for Chief Executive Officer Mark Bristow. The miner has begun arbitration proceedings against Mali.
“Barrick has regrettably initiated the temporary suspension of operations while it continues to work towards a resolution,” the statement said.
Loulo-Gounkoto is one of the largest gold mines on the planet and only Barrick’s flagship Carlin asset in Nevada provides the Toronto-based firm with more output and income. In 2023, the mine accounted for more than a third of Mali’s formal gold exports and made payments of 278 billion CFA francs ($433 million) to the cash-strapped state, according to the Extractive Industries Transparency Initiative.
The government has begun executing a seizure order against the mine and moved “existing gold stock” to a custodial bank, according to Barrick’s statement. The company said on Jan. 6 that an “interim attachment order” had been issued for gold on site at Loulo-Gounkoto.
Mali Pressure
The Malian junta has been pressuring mining investors to renegotiate the economic terms of contracts with the state ever since commissioning a sector-wide audit in 2022 and introducing new legislation for the industry last year.
The government’s position is that Barrick owes back taxes and should accept the updated mining code. The company has said the audit’s findings are “flawed” and the revised law should have “no application” to existing mines.
Whereas gold production in the country is dominated by western operators, companies active in the nascent lithium mining sector are either owned or financed by Chinese firms.
Other large gold producers in Mali – including B2Gold Corp. – have already announced settlements with the government that involve large payments to the state and higher royalty rates. Barrick previously offered to pay about $370 million to bring the dispute to an end.
--With assistance from Jacob Lorinc.
(Updates shares in third paragraph.)
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