Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
Shares of gold producer Resolute Mining plunged greater than 30 per cent on Monday after the corporate mentioned its chief government Terence Holohan and two different staff had been detained in Mali.
The executives had been within the capital Bamako to debate with officers “open claims made in opposition to Resolute” that the group “maintains are unsubstantiated”, mentioned Resolute, which is listed in Sydney and London.
In its 2022 monetary report, the miner mentioned it was contesting calls for from Mali tax authorities for extra funds price greater than $100mn on taxes between 2015 and 2021.
The information comes because the Malian authorities is growing strain on mining corporations to renegotiate their contracts. Barrick Gold and B2Gold are among the many corporations that function gold mines in Mali.
Mali, a nation of 23mn folks within the Sahel, the semi-arid strip south of the Sahara, commissioned an audit into all mining contracts in 2022 and rewrote the mining code to extract greater income from mining corporations.
The brand new code permits the federal government to take 10 per cent of initiatives and provides it the choice to take a further 20 per cent stake inside the first two years of business manufacturing. Firms are obliged to cede one other 5 per cent stake to the federal government, which then has the choice to promote to personal Malian traders at an unspecified date.
Barrick Gold has additionally been in troublesome negotiations with the Malian authorities over the brand new phrases. In September, 4 Barrick executives had been detained for 4 days. Final month Barrick Gold paid the federal government $85mn “within the context of the continued negotiations”.
A number of different miners working in Mali, akin to Toronto-listed Robex Sources and Allied Gold, have not too long ago signed offers with the federal government which embody one-off funds in addition to greater royalties, based on Peter Mallin-Jones, mining analyst at Peel Hunt.
“It seems just like the junta is getting out the large follow attempt to encourage the laggards to rush up, and signal,” mentioned Mallin-Jones, referring to the detention of Resolute officers. “The actions are more likely to increase a fair bigger pink flag over teams with operations or initiatives in Mali.”
Resolute’s greatest mine is the Syama mine in Mali, of which the corporate owns 80 per cent and the federal government holds the remaining 20 per cent.
The corporate has been investing in a brand new manufacturing plant on the mine, which is able to enhance gold manufacturing from as a lot as 215,000 ounces this 12 months, to 250,000 ounces subsequent 12 months.
Governments within the coup-hit central Sahelian states of Burkina Faso, Niger and Mali, all dominated by navy juntas, have taken a more durable line on mining teams working of their nations, searching for to attract better income from them.
Listed gold miners have recorded robust features this 12 months as the dear metallic hits all-time high valuations. Shares of Resolute had been up greater than 90 per cent for the 12 months earlier than Monday’s plunge.
