Playing Hardball

Listen to Today's Edition:

Australian goldmining company Resolute Mining agreed to pay Mali’s military government $160 million to settle tax and customs disputes, part of a campaign undertaken by the country’s ruling junta to tighten control over the nation’s lucrative gold mining sector, the Associated Press reported.

The settlement comes nearly two weeks after Malian authorities detained three of the company’s British employees, including its CEO, in the capital Bamako, after meeting with government officials to discuss the disputes.

On Monday, the mining firm confirmed that the detainees are “safe and well” and are receiving support from UK consular officials. Resolute has paid the first $80 million of the settlement from its $157 million cash reserves, with another $80 million due in the coming months.

The agreement resolves all claims by Malian authorities, including those involving taxes, customs levies, and offshore account management.

Resolute has been working for years in Mali and holds an 80 percent stake at the Syama gold mine in the southwest, while the government holds 20 percent. That is a situation the government wants to change.

Meanwhile, the arrests of Resolute’s staff are part of a broader trend: In September, Mali detained four employees of Canada’s Barrick Gold, with analysts describing the detainment as “hostage taking,” the Guardian noted.

Gold is Mali’s biggest export and the West African country is one of Africa’s top five gold producers.

But the country has been plagued by a years-long insurgency fueled by jihadist groups, Tuareg rebels and political instability. In 2021, it saw its third military coup in a decade.

The current junta has imposed stricter policies on foreign mining firms. In 2022, the government revised mining laws to increase its mandatory ownership stake in mining projects from 20 percent to 30 percent and required companies to sell an additional five percent stake to Malian investors.

In October, the junta nationalized the dormant Yatela mine, previously held by AngloGold Ashanti and Iamgold.

Observers said the government is relying heavily on mining revenues, especially as international donors and NGOs have withdrawn because of Mali’s growing ties with Russia and its use of Russian mercenaries.

They cautioned that the policies could deter future investments.