Mali says Barrick Gold owes $500 million in taxes, fines - sources
08/10/2024 15:27
By David Lewis, Giulia Paravicini and Divya Rajagopal
Oct 8 (Reuters) - Mali's military government is seeking
at least 300 billion CFA ($512 million) in outstanding taxes and
dividends from Barrick Gold, three sources said, a move that is
part of a push by the country to collect more revenue from
mining companies.
Authorities in Mali last month briefly detained four Malian
staff working for Barrick, the world's second-largest gold
miner, and the Canadian company said on Sept. 30 it had agreed
with the government to solve existing claims and disputes.
The demands on Barrick follow an audit of mining contracts
last year and a subsequent push by Mali to renegotiate existing
agreements with mining firms, including Bing2GOLD, Resolute
Mining and Allied Gold, to channel a greater share of revenues
into state coffers through a new mining code.
Under the new code - which comes as governments across
Africa seek more revenues from their mines producing gold and
the critical minerals needed for global energy transition -
Malian state and private interests in projects could rise to 35%
from 20% now. The law also seeks to slash tax breaks and
increase the number of Malians in management roles.
Three sources with direct knowledge of the talks between the
government and mining companies said Barrick, which runs the
Loulo-Gounkoto mines in western Mali with an 80% stake, had been
presented a bill for at least 300 billion CFA.
One of the sources, a consultant working with mining
companies in Mali, said the bill was mainly for retroactive tax
adjustments and unpaid dividends.
Another source, who works with mining companies and the
Malian government, confirmed the figure, saying the bill would
cover taxes owed from 2020, 2021 and 2022.
A third source, a senior official with another mining
company in the country, said Mali believes Barrick owes as much
as 500 billion CFA and the claim is also linked to the
non-repatriation of funds.
All the sources spoke anonymously due to the sensitivity of
the issue in Mali.
Asked to comment, a spokesperson for Barrick said: "We
are still in the process of negotiation and will let you know
once the agreement is settled".
In Barrick's 2023 annual report, the firm said it received
tax collection notices at the end of November 2023 for around
$417 million relating to VAT credit balances that had offset
taxes and royalties but were subsequently disallowed by Malian
authorities.
Barrick said the tax bills were "without merit" but that it
had paid $17 million as part of a six month stay on enforcement
on them.
It was not immediately clear why the amount provided by
the sources was some $100 million higher than the figure
provided by Barrick. One of the sources said the amount Mali
says Barrick owes has increased as authorities deepened
investigations.
A fourth source, also a senior official with another mining
company, said they had heard Barrick was preparing to make a
$300-$350 million payment to the government. The source did not
have further details. Barrick declined to comment.
Malian government officials did not respond to requests for
comment. In August 2023, the mining ministry said the audit had
revealed the government was missing 300 billion to 600 billion
CFA francs in revenues that it intended to recover from
companies.
TALKS AND ARRESTS
Mali is not alone in seeking a bigger share of revenues from
the race for Africa's minerals. In neighbouring Burkina Faso,
the junta-led government said this month it planned to strip
some foreign firms of permits. Niger's military government has
also revoked permits.
Sources close to the talks in Mali said the junta is using a
mixture of coercion, including arrests of local staff, and the
potential threat of mining licences being revoked, as they
squeeze the mainly Western firms for more cash.
Mali's government declined to comment. President Assimi
Goita said last year investors had the choice of accepting
Mali's new mining rules or leaving the country.
On Sept. 21, Alousseni Sanou, Mali's minister for mining
and economy, said B2GOLD, Allied Gold and Robex had signed new
contracts that will bring in an additional 245 billion CFA a
year for the state.
Ever since Mali called on Russia for military support in its
fight against Islamist militants, there has been intense
speculation that any permits stripped off existing operators
might be handed to Russian firms. So far, this has not happened.
"The purchase of Barrick assets in Mali is not on the
table," one source familiar with the issue told Reuters.
($1 = 586.0000 CFA francs)
(Additional reporting by Jessica Donati in Dakar; Tiemoko
Diallo in Bamako; Felix Njinji in Johannesburg; editing by David
Evans)
((mailto:david.lewis2@thomsonreuters.com; Dakar Newsroom +221
338645076; Reuters Messaging:
rm://david.lewis2.thomsonreuters.com@reuters.com/))