The arrest of mining executives in Mali, threats by Burkina Faso’s junta to strip permits and the seizure of a French-run uranium site in Niger have unsettled Western miners operating in West Africa and could limit further investments.
Day-to-day production in Mali and Burkina Faso has so far been largely unaffected.
The escalation is expected, however, to hit firms seeking finance and insurance – curbing supply growth in Africa’s engine of gold output, more than a dozen people, including mining employees, financiers, insurance providers and government sources, told Reuters.
The push by Mali, Burkina Faso and Niger’s military governments to renegotiate terms with mining companies and gain a bigger share of revenues has coincided with a surge in gold and uranium prices.
It has also followed a series of coups, starting with Mali in 2020, and the three countries’ shift towards Russia and away from their traditional backers France, the United States and the United Nations.
Moscow has strengthened its military and diplomatic presence in the region. There is no evidence yet Russian companies have positioned themselves to take over mining assets, but analysts said that could not be ruled out.
“We wouldn’t invest in Mali now,” a Western fund manager told Reuters, adding record gold prices had made miners operating in the Sahel an obvious target for juntas. The fund manager asked not to be named.
Over the last decade, companies keen to profit from West African gold countered the spreading threats posed by Islamist militants expanding from their initial stronghold in northern Mali by working with governments to beef up security.
But relations have soured since the coups.
Mali, Africa’s second biggest gold producer last year, according to the World Gold Council (WGC), carried out an audit of operations and rolled out a new mining code, triggering talks over new agreements and outstanding tax bills.
Arrests of staff from Australia’s Resolute Mining (RSG.AX), opens new tab and Canada’s Barrick Gold (ABX.TO), opens new tab by military authorities have gathered pace since September. Mali issued an arrest warrant for Barrick CEO Mark Bristow last week.
The country has so far received or been promised over $635 million in additional tax payments from various companies, Reuters calculations show.
Four Barrick Gold employees are detained in Mali’s capital Bamako pending trial. Barrick, the world’s No.2 gold miner, said in November it was seeking to strike a deal.
Barrick did not reply to requests for comment for this story.
Reuters
