THE BOSS of Barrick Gold, a Canadian mega-miner and the world’s second-largest gold producer, isn’t any stranger to bust-ups with African governments.
Earlier this month, in Cape City, Mark Bristow recalled previous wrangles with leaders in Tanzania and Congo like a retiring boxer reminiscing over outdated bouts. He shrugged off an arrest warrant, issued by the federal government of Mali in December and accusing him of money-laundering and violating monetary rules (allegations he denies), as the price of doing enterprise in exceptionally powerful locations. “Mining is a long-term sport,” says Mr Bristow. “One of the simplest ways to resolve misunderstandings or disagreements is thru dialogue.”
His optimism appears to have paid off. On February nineteenth Reuters reported that Barrick and Mali had agreed to finish a dispute that had lasted virtually two years and led to the suspension of mining operations accounting for between 5% and 10% of Mali’s GDP. The Malian authorities had demanded $500m in again taxes—a sum the finance ministry lately bumped as much as a huge $5.5bn.
In response to the brand new settlement, Barrick pays $438m. In return, the federal government is to launch 4 senior native workers in jail on prices of money-laundering and financing terrorism (prices that Barrick has maintained are “unfounded”). It is going to additionally return tons of of thousands and thousands of {dollars}’ value of gold ore, which the state started seizing final 12 months.
The saga, nonetheless amicable its conclusion, illustrates the rising challenges going through Western miners within the area. African governments, from Ivory Coast to Zambia, are revising mining codes in pursuit of upper rents and larger possession stakes. They’ve been prompted by surging international demand for minerals starting from gold—the value of which is at an all-time excessive—to copper and lithium, that are vital for the inexperienced transition.
The development in the direction of useful resource nationalism is most superior in Mali, Burkina Faso and Niger, the center of Africa’s “coup belt” and a zone more and more aligned with Russia and hostile to the West. These Sahelian states are among the many continent’s richest in minerals, particularly gold and uranium. However due to the capricious and heavy-handed strategy navy governments have taken to squeezing international buyers, the Sahel can be the place the nationalist flip is most definitely to backfire.
Mali’s junta, which took energy in 2020, is the pioneer. A state-commissioned audit of the mining sector, which Mr Bristow brushes off as “incorrect”, claimed the federal government was lacking out on revenues of practically $1bn. The revised mining code, launched in 2023, eliminated tax and customs exemptions and elevated the share of a mission the state can personal from 10% to 30%. Controversially, the junta insisted on making use of it retroactively to present operations, reasonably than simply future ones. To implement compliance, it has “incrementally elevated calls for and procedural stress”, notes Beverly Ochieng of Management Dangers, a consultancy. Even earlier than the cope with Barrick, Mali had obtained or been promised over $635m in extra tax funds, in keeping with Reuters.
Mali’s neighbours have taken word. Final 12 months Niger’s authorities cancelled the mining licence held by Orano, a state-owned French nuclear-fuel firm. Within the face of authorized proceedings it has blocked uranium exports and promised to return the mines “to the general public area of the state”. The federal government of Burkina Faso has nationalised two mines and seized gold extracted by a Canadian agency. Sarama Assets, an Australia-based gold miner, has launched into an arbitration battle in protest towards the withdrawal of one in every of its exploration permits.
Some fret that the juntas are motivated primarily by hostility to the West. Up to now few years the trio have all expelled Western—primarily French—troops, and as an alternative employed Russian mercenaries to assist them struggle jihadists. Niger’s showdown with Orano, particularly, is clearly pushed by geopolitics. Russia, China and Turkey stand to learn from the brand new orientation in Mali and Burkina Faso. “We see companions being most well-liked on the premise of nationality,” complains a Western diplomat in Bamoko, Mali’s capital. In December Ganfeng Lithium, China’s largest lithium producer, opened an enormous mine in Mali.
However there are limits to the geopolitical shift. Of the three international locations, solely Burkina Faso has a Russian-owned industrial mine. “I don’t suppose they really need to break the connection with Western multinationals,” says Ulf Laessing of Germany’s Konrad Adenauer Basis in Bamako.
Cash appears to be extra essential than ideology. The economies of all three states are within the doldrums. 4 mines in Burkina Faso have closed because the military took energy in 2022. Mali’s junta is reportedly struggling to pay for the providers of Wagner Group, a Russian mercenary outfit it employed in 2021. The search for extra income shouldn’t be restricted to Western miners. This month the federal government started taxing cellphone calls and mobile-money transactions. Final 12 months it made Maroc Telecom pay a price of $272m to resume its licence.
Native businesspeople in Bamako complain about more and more onerous tax calls for. “All the things has gone up,” grumbles Yusuf Diarra, a water-tank salesman. The shakedown of international firms, in contrast, seems broadly in style. Even Malians vital of the junta agree that earlier mining codes have been too beneficiant to miners. “Altering the 2019 code took guts, and needed to be performed,” says Modibo Mao Makalou, a distinguished economist.
However the authorities’s strategy appears more likely to jeopardise Mali’s economic system in the long term. Annual gold manufacturing fell by practically 1 / 4 in 2024, in keeping with the nation’s mines ministry. Even when huge miners like Barrick—one of many nation’s largest personal employers—keep put in Mali, they could suppose twice earlier than committing extra capital. “Mining is by far the inspiration of that economic system, and you may destroy it in a heartbeat,” Mr Bristow warns.
For now few Western mining corporations are speeding to go away the Sahel. Mr Bristow suggests Barrick would refuse any calls for which could threaten the financial viability of its initiatives in Mali. However he additionally says he’s “very completely happy to seek for methods for the state to get extra of the [tax] take”. Governments and mining firms nonetheless have highly effective incentives to get alongside.
© 2025, The Economist Newspaper Ltd. All rights reserved. From The Economist, revealed beneath licence. The unique content material might be discovered on www.economist.com
