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Highlights
- CEO and executives of Resolute Mining detained over Mali royalties disagreement
- Detentions follow recent efforts by Mali to renegotiate mining contracts under new code
- Foreign mining firms facing increased scrutiny from Malian military government
In Mali, a military-led government has detained executives from the Australian gold mining company Resolute Mining (ASX:RSG) over a royalties dispute tied to the company’s mining operations. Terry Holohan, CEO of Resolute Mining, along with two other executives, was taken into custody in the capital city, Bamako, after a meeting with local authorities. The executives, detained in a hotel, remain in regular contact with Resolute, which has stated that they are safe and well.
Resolute’s CEO, who had traveled to Bamako for discussions with mining and tax authorities, was addressing issues related to the company’s ongoing operations in the region. These talks were also intended to address claims previously raised against Resolute’s business practices, which the company maintains are unsubstantiated. Despite the detention, Resolute Mining has emphasized its commitment to adhering to all official procedures and providing detailed responses to Malian authorities.
Resolute Mining, with listings on both the Australian and UK stock exchanges, is in active discussions with Mali’s government to secure a long-term future for the Syama gold mine. The company has a majority interest in the Syama mine, holding an 80% stake, while the Malian government holds the remaining 20%. In a statement, Resolute noted that while the safety and well-being of its staff are top priorities, it is also working towards a constructive settlement with the government to ensure the mine’s continuity. The detained executives are receiving support from the United Kingdom and other international embassies in Mali.
This incident comes amid broader regulatory pressure on foreign mining companies operating in Mali. The Malian government, under the leadership of President Assimi Goita, introduced a new mining code allowing the government to acquire up to 30% of foreign-operated mining projects. The code also mandates that existing contracts with foreign companies must be renegotiated. This change has significantly impacted the operations of foreign companies like Resolute Mining in the region.
The recent arrests in Mali mark the second instance of foreign mining executives being detained in the country within a short period. In September, employees of Barrick Gold (ASX:ABX) were also detained by Malian authorities due to an alleged payment dispute. Following negotiations, Barrick resolved the matter by agreeing to pay 50 billion CFA francs to Mali’s government. This move highlights the increasingly tense relationship between Mali and foreign mining operators, as the government seeks to gain greater revenue from its natural resources.
Shares of Resolute Mining experienced a sharp decline of nearly 29% following news of the detentions, reflecting investor concerns over the stability of foreign operations in the country.
