Barrick Gold seeks arbitration over Mali gold mine dispute
Adds Barrick comment in paragraph four, details about Mali operations and arrests in paragraphs 5-6, comment from an arbitration lawyer in paragraph 8, details about Mali mining situation in paragraphs 9-10
By Divya Rajagopal and Vallari Srivastava
Dec 18 (Reuters) -Canadian miner Barrick Gold ABX.TO said on Wednesday it had submitted an arbitration request to the International Centre for Settlement of Investment Disputes, to settle a disagreement with Mali over its Loulo-Gounkoto gold mine complex.
Barrick, the world's second-largest gold miner based on production, and the Mali junta have been in dispute since 2023 over a contract for Barrick based on the country's new mining rules. The fight has led to several levels of escalation, including Mali issuing an arrest warrant for Barrick CEO Mark Bristow this month. Barrick owns 80% of Loulo-Gounkoto, with the Mali government owning 20%.
The miner this week threatened to suspend operations in Mali over deteriorating mine conditions. Jefferies analysts wrote in a note this week that closure of the mine would reduce Barrick's earnings before interest, taxes, and amortization by 11% next year.
Barrick said arbitration has previously been an effective tool in finding mutually acceptable solutions.
The company did not respond to a query about whether it has already suspended operations in Mali or whether the junta has threatened to cancel its mining license.
Four Barrick executives were arrested in Mali in November, the company has said. A person with knowledge of the issue said on Wednesday they were still detained. Another source said the mine continues to operate, although gold exports have stalled.
For the nine months ending Sept. 30, the Loulo-Gounkoto mine contributed $949 million to Barrick's revenues.
"Barrick under its current leadership seems reticent to resort to arbitration, so this shows they’ve done their due diligence and are confident in their claim," said Timothy L. Foden, a lawyer involved in international arbitration of mining disputes.
Mali, under interim President Assimi Goita, has increased pressure on western miners in a bid to raise its revenue share from gold mines. In the last two months, the junta has detained senior executives of western miners, including employees of these companies for alleged non-payment of mining taxes.
The increased pressure from Mali comes as gold prices hit record highs.
Reporting by Divya Rajagopal in Toronto,Tiemoko Diallo in Bamako and Vallari Srivastava in Bengaluru; Editing by Devika Syamnath and Rod Nickel
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