By Alexandra Wexler in Johannesburg, Rhiannon Hoyle in Adelaide, Australia and Benoit Faucon in London
Mali's Russia-allied military government has found a new tactic to wrest more revenue from Western mining companies: detain their employees.
Australian company Resolute Mining, which owns a gold mine in Mali, this week agreed to pay the Malian government a total of $160 million, just over a week after authorities in the West African nation detained the company's chief executive and two other employees. Resolute didn't specify the purpose of the payments, but said they would settle any outstanding claims related to "tax, customs levies, maintenance and management of offshore accounts."
The company's CEO, Terry Holohan, had traveled to the capital Bamako earlier this month for meetings with Malian mining and tax authorities to make progress on what the company said were "open claims made against Resolute." Following those meetings on Nov. 8, Holohan and the two other employees, whom the company didn't name, were detained and held at the Economic and Financial Centre of Bamako, an anticorruption agency, Resolute said at the time.
Last month, Canadian miner Barrick Gold said it had paid Mali's government $85 million to "resolve outstanding disputes" with authorities there. The payment followed the brief detention in September of four Barrick's employees in Bamako by Malian authorities, according to two European security officials. The officials said that the Barrick staff were only released after the company had agreed to the payment.
A Barrick spokeswoman declined to comment on whether any of its staff had been detained in Mali. The Malian mining ministry didn't immediately respond to an email seeking comment on the detentions. A spokesman for the Malian defense forces declined to comment.
Mali's ruling junta, which came to power following two military coups in 2020 and 2021, adopted a new mining code in August 2023 that covered both existing and new projects. The law requires foreign mining companies to give the Malian government and local investors a 35% stake in all mining projects in the country, up from 20% previously, and abolished certain tax exemptions.
The vast desert nation that has been battling a widening jihadist insurgency and has some of the largest gold reserves in Africa -- the yellow metal accounts for 96% of its export earnings. Its military leaders have kicked out U.S., French and other Western counterterrorism troops and hired Russian mercenaries instead.
The spats with foreign mining companies have coincided with a sharp rise in global gold prices. Before announcing their respective payments, both Resolute and Barrick had disputed that they owed money to authorities in Mali, one of Africa's poorest countries.
The European security officials said that the Malian junta has been facing a cash crunch amid international sanctions imposed after the coups, with even the main airport running short of kerosene.
In a statement published Monday, Resolute said it was working with the Malian government on "procedural steps" to secure the release of Holohan and its two other employees, adding that they were safe and well. The company said it had already paid Malian authorities around $80 million from existing cash reserves and would pay around $80 million more in the coming months.
Resolute reported revenue of $631 million in 2023, with a profit after tax of $65.6 million.
In an interview with The Wall Street Journal in May, Holohan said he was confident that Resolute could continue doing business in Mali despite Russia's expanding presence.
"They really need people like us to generate revenue and pay taxes," he said at the time.
Write to Alexandra Wexler at alexandra.wexler@wsj.com, Rhiannon Hoyle at rhiannon.hoyle@wsj.com and Benoit Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
November 19, 2024 11:18 ET (16:18 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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