Mark Bristow has spent three decades navigating civil wars and coups to build some of Africa’s richest gold mines, but now Barrick Gold Corp.’s boss is being strong-armed by a Mali junta desperate for cash.
Mark Bristow, president and chief executive officer at Barrick Gold, discusses the company’s Q3 earnings, and says they are on track for a strong Q4.
It’s a prize worth fighting for: not only is Mali the continent’s second-largest gold producer, but Barrick’s Loulo-Gounkoto is a low-cost mine producing more than half a million ounces a year, putting it in a select group of so-called tier one assets. Bristow’s previous attempts to win over African leaders have yielded mixed outcomes. Soon after taking charge of Barrick, the outspoken South African swiftly ended a long-running row with the Tanzanian authorities during which a subsidiary was hit with a $190 billion tax bill and exports were banned. However, as head of Randgold, his efforts to lobby the then Congolese president to reverse aspects of a new mining code proved ineffective.
The government is also pushing companies with existing operations to move toward a mining code adopted last year, which gives the state larger stakes in their assets, while reducing the duration of licenses and hiking royalties.Resolute Mining Ltd. CEO Terry Holohan was released from detention in the capital, Bamako, last month, after the Australian company announced it would pay $160 million to Mali and migrate its Syama asset to the updated mining law. B2Gold Corp. and Allied Gold Corp.
“It looks like a shakedown,” said Peter Leon, Africa-chair at London-headquartered law firm Herbert Smith Freehills LLP. Mali’s approach “is also short-sighted as it is not going to promote investment in the country,” he said. Bristow said Barrick — which along with Randgold has invested more than $10 billion in Mali over 29 years — is committed to an outcome that preserves the “long-term viability” of Loulo-Gounkoto. The company has proposed raising the government’s share of economic benefits from the complex to 55% and has already paid the first $85 million installment of the settlement that’s being discussed.
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