Mali Detains Australian Gold Mining Company CEO and Executives

In a dramatic escalation of tensions in Mali’s mining industry, the country’s military junta has detained the CEO of Resolute Mining, Terence Holohan, along with two other senior employees. The Australian gold mining company confirmed the detentions on Sunday, noting that the executives were held following a series of discussions in the capital, Bamako, regarding ongoing business operations and disputes.

The Arrests: A Turning Point for Foreign Mining Companies in Mali

Resolute Mining, which operates the Syama gold mine in southern Mali, confirmed that the three executives were unexpectedly detained last Friday after talks about unresolved claims made against the company. While the company maintains that these claims are “unsubstantiated,” the detentions come amid growing pressure from the Malian government to renegotiate contracts and secure higher revenues from foreign mining firms.

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This is not the first such incident. In September, four employees of Barrick Gold were detained for several days, and the Canadian firm has also been embroiled in disputes with the Malian government over tax and contractual issues.

Mali’s Mining Industry Under Scrutiny

Mali is one of Africa’s top gold producers, and its mining sector has been under increasing scrutiny by the military-led government since the 2020 coup. The government has implemented a new mining code that allows it to claim larger stakes in mining projects. Under the revised code, the Malian government can acquire up to 35% of mining projects, a significant increase from the previous 20%. This move is part of a broader effort by the junta to extract more revenue from the country’s vast mineral wealth.

Resolute Mining, which holds an 80% stake in the Syama mine with the Malian government owning the remaining 20%, has been caught in the crosshairs of these new policies. The company is currently contesting claims for additional taxes amounting to over $100 million for the period between 2015 and 2021. In response, Resolute has reiterated that it has followed all official processes in Mali and provided the authorities with detailed responses to the claims.

The Impact of Detentions on Resolute Mining

The detentions of Resolute’s executives have had a major impact on the company’s stock performance. Shares of the Australian-listed company plummeted by over 30% on Monday, marking its worst trading day in over 16 years. The company, which had been experiencing a significant rise in stock value earlier this year due to the soaring price of gold, saw its market capitalisation take a sharp hit.

The detentions also highlight the growing challenges faced by foreign mining companies operating in Mali, where the government is increasingly asserting control over the sector. Other major mining firms, including Barrick Gold and B2Gold, have also been facing pressure from the Malian authorities to renegotiate their agreements.

Mali’s Push for Greater Control and Revenue

The broader context of these developments is Mali’s effort to increase state revenue from its mining sector. The government’s push to renegotiate contracts with foreign companies has been met with resistance, but the junta has made it clear that it will not back down. The new mining code, coupled with the detentions of executives, sends a clear signal to foreign firms that Mali is determined to secure a greater share of the profits from its mineral resources.

What’s Next for Resolute Mining and Mali’s Gold Industry?

As the situation unfolds, Resolute Mining is working with foreign embassies in Mali, including the British Embassy, to resolve the matter and ensure the safety of its detained employees. The company has emphasised that the wellbeing of its staff remains its top priority. Resolute is also continuing efforts to settle the disputes surrounding the Syama mine to secure its long-term future in the country.

Despite the uncertainty, Resolute is continuing to invest in the Syama mine, which is expected to produce between 205,000 to 215,000 ounces of gold in 2024. However, the company’s future in Mali depends largely on how it navigates the increasing pressure from the government and how the broader political landscape in the Sahel region develops.

Conclusion: Mali’s Mining Sector in the Spotlight

The detentions of Resolute Mining’s CEO and executives are a reflection of the larger geopolitical and economic forces shaping Mali’s mining industry. With the government pushing for higher revenues and foreign companies facing increasing scrutiny, the future of Mali’s mining sector is uncertain. As the military junta continues to assert its authority, foreign firms operating in the country will need to adjust to a new reality where the government is determined to extract more from the industry, which has long been the country’s economic backbone.