The Malian government continues to shake up the mining sector by reaffirming its sovereignty over the exploitation of its natural resources. Resolute Mining Ltd, one of the main foreign mining companies operating in the country, announced in a press release the $160 million settlement with Bamako, after its CEO, Terry Holohan, and two executives were arrested on November 9 in Bamako. This agreement marks a new stage in the overhaul of the Malian mining code, which now imposes much stricter rules on foreign operators.
A $160 million deal to ease tensions
Resolute Mining, owner of the strategic Syama mine, has opted for a financial settlement to avoid an escalation with the Malian government. The Australian company has already paid $80 million in cash, with the balance expected in the coming months. This regulation, described as “ necessary » by the company, aims to extinguish the accusations against it, while allowing the upcoming release of the three employees detained in Bamako.
In its press release published on the Sydney Stock Exchange, Resolute confirmed that its executives, although still detained, are in good health and benefiting from consular assistance. This announcement comes as the company had recently revised its production forecasts for 2024 downwards, to 200,000 ounces of gold compared to 345,000 previously.
A mining sector under increased state control
This episode is part of a series of radical reforms initiated by the military junta in power in Bamako since 2021. The new mining code adopted last year requires foreign operators to renegotiate their contracts to include increased state participation, now increased from 20% to 35%, while removing tax advantages deemed excessive. Companies must also retroactively repay these benefits, a measure that has already cost giants like Barrick Gold, ordered to pay $512 million in arrears.
For the Malian authorities, these reforms aim to maximize local economic benefits, by promoting the employment of nationals and strengthening control over mineral wealth. The message is clear: foreign operators must comply with the new rules or leave the territory.
A climate of uncertainty for foreign investors
The junta's drastic measures, although applauded by the population, worry international investors. The reform of the Malian mining sector is seen as a strong signal of a desire for economic sovereignty, but it is accompanied by increased risks for foreign companies.
In this context, speculation is emerging on a possible entry of Russian actors into the mining sector, reinforced by security ties between Bamako and Moscow. Although nothing has yet been made official, this prospect accentuates uncertainty for Mali's traditional partners, particularly in the West.
An example for the region?
Mali, through this recovery of its mining sector, is part of a dynamic observed in several countries in the region, such as Burkina Faso and Niger. These nations, facing major security and economic challenges, are adopting similar policies to make better use of their natural resources.
With this agreement concluded between Resolute Mining and Bamako, Mali sends a clear message: the era of unbalanced contracts for the benefit of multinationals is over. However, the sustainability of this strategy will depend on the government's ability to maintain the balance between economic sovereignty and attractiveness for foreign investors.
