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Highlights
- Resolute Mining agrees to a $247 million settlement with the Malian government.
- CEO and two employees remain detained in Mali amid ongoing procedural steps for their release.
- Mali enforces stricter regulations, impacting multiple foreign mining companies, including Barrick Gold.
Resolute Mining (ASX:RSG), a gold miner listed on the Australian Securities Exchange, has reached a $247 million settlement with the Malian government to resolve an ongoing tax dispute. This agreement follows the detention of its chief executive and two other staff members in Mali, reportedly held for over a week. The arrested executives, including CEO Terence Holohan, are British nationals. Resolute has confirmed they are in regular contact with the company and international embassies while procedural steps for their release are underway.
The settlement includes an immediate payment of $80 million, with a second $80 million installment to follow in the coming months. Resolute stated this will resolve all outstanding claims from the Malian government, including issues related to tax, customs levies, and management of offshore accounts.
Mali’s ruling junta, in power since a 2021 coup, has implemented significant changes to its mining regulations, compelling foreign companies to renegotiate contracts and settle back taxes. The country’s revised mining code increased the government’s project ownership rights from 20% to 35%, alongside the abolition of certain tax breaks.
Resolute’s Syama gold mine in southern Mali, near the Côte d’Ivoire border, has been at the center of the dispute. The mine, 80% owned by Resolute, is projected to produce over 200,000 ounces of gold in 2024. Mali’s government owns the remaining 20% of the operation. Resolute also manages the Mako gold mine in Senegal.
The incident highlights a broader trend in the region. Toronto-based Barrick Gold (ASX:ABX) recently paid $85 million to secure the release of its executives detained in Mali over back tax demands. Other miners, such as Allied Gold, B2Gold (ASX:BTO), and Robex Resources, have also renegotiated agreements in the country.
Resolute’s Australian-listed shares experienced a significant decline, falling from 67 cents to 40 cents before being suspended. Upon resuming trading, shares fell further to 39 cents. The company’s market capitalization dropped by over $600 million during this period.
Amid rising gold prices, West African governments, including Mali, are increasing pressure on mining companies to contribute more revenue. This situation underscores the shifting dynamics in the region, further complicated by Mali’s growing ties with Russia and the withdrawal of European military forces and the United Nations peacekeeping mission.
