What's Happening?
The Government of Mali has granted a ten-year extension to Barrick Mining's permit for the Loulo project, following the resolution of a prolonged dispute over profit-sharing and control of the Loulo-Gounkoto gold mining complex. This conflict arose due
to Mali's 2023 mining code, which imposed higher taxes and increased the state's stake in mining projects. As part of the agreement, Barrick has agreed to withdraw its arbitration case with the World Bank's dispute tribunal. In return, Mali will drop all legal charges against Barrick and its subsidiaries, release detained employees, and restore full operational control of the complex to Barrick. The Loulo-Gounkoto complex is a significant contributor to Mali's economy, generating nearly $900 million in revenue in 2024.
Why It's Important?
The extension of Barrick's permit is crucial for both Mali and Barrick. For Mali, the resolution of the dispute and the continuation of operations at the Loulo-Gounkoto complex ensure ongoing economic benefits, including job creation and revenue generation. For Barrick, the agreement allows the company to maintain its position as a leading gold producer in Mali, contributing significantly to its financial performance. The resolution also highlights the importance of stable regulatory environments for international investments in the mining sector, which can be sensitive to changes in government policies.
What's Next?
With the permit extension, Barrick plans to proceed with a new feasibility study that supports six years of open-pit mining and 16 years of underground operations. The projected annual gold production is estimated at 420,920 ounces. This development is likely to attract further investments in Mali's mining sector, as it demonstrates the potential for resolving disputes through negotiation. Additionally, Barrick's recent sale of the Hemlo Gold Mine in Canada indicates a strategic focus on optimizing its portfolio, which may lead to further asset sales or acquisitions in the future.
