BARRICK Gold has submitted an arbitration request to the International Centre for Settlement of Investment Disputes (ICSID) to resolve a mounting dispute with Mali over its Loulo-Gounkoto gold mine complex. The Canadian mining giant, which holds 80 percent ownership of the mine, is in conflict with Mali’s junta over a new mining contract that has escalated since 2023.
Escalating tensions between Barrick and Mali
The dispute has led to several confrontations, including the issuance of an arrest warrant for Barrick CEO Mark Bristow by Mali this month. The Mali government holds a 20 percent stake in the Loulo-Gounkoto complex, but tensions have surged over the country’s revised mining regulations. Barrick’s warning this week about potentially suspending operations in Mali adds further weight to the growing standoff.
Operational impact and financial concerns
If Barrick were to suspend operations at Loulo-Gounkoto, analysts warn it could cut the company’s earnings before interest, taxes, and amortisation (EBITDA) by 11 percent in 2024. Despite these risks, Barrick remains firm in its decision to pursue arbitration, having previously used it as a means to reach mutually acceptable solutions with governments.
Arrests and deteriorating conditions in Mali
The conflict has led to the arrest of four Barrick executives in Mali, with reports confirming they are still detained. Although gold exports from Loulo-Gounkoto have stalled, the mine itself remains operational. For Barrick, the mine is a significant asset, contributing $949 million to its revenue for the nine months ending September 30.
Mali’s push for greater control over mining revenues
Under interim President Assimi Goita, Mali has increased pressure on Western mining companies, seeking a higher share of revenues from the country’s gold sector. The junta has detained multiple foreign executives and workers for alleged tax evasion, with the rising gold prices only intensifying the stakes.
Legal strategy signals confidence
Despite the tension, Barrick’s legal move indicates a confident stance, with international arbitration being seen as a reliable mechanism for resolving such disputes. Timothy L. Foden, a lawyer experienced in mining arbitration, noted that Barrick’s decision to engage ICSID signals thorough preparation and strong belief in its position.
As the situation unfolds, all eyes are on how the arbitration process will affect both Barrick’s operations in Mali and the broader mining sector in the region.
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