The Malian government is reportedly moving to sell $107 million worth of seized gold from Barrick Mining's (NYSE:B) Loulo-Gounkoto mine complex to fund the site's restart following a nearly six-month suspension of operations.
According to sources cited by Reuters, court-appointed administrator Soumana Makadji plans to sell one metric ton of stored gold to cover essential expenses, including salaries, fuel, and contractor payments.
The development follows a prolonged escalation between the leading gold miner and Mali's military-led government. The conflict began after Mali implemented a new mining code in 2023, seeking higher royalties from foreign miners.
Barrick refused to adopt the changes, citing violations of existing mining conventions. In response, the government blocked gold exports in late 2024 and requested a court-appointed administrator, a move formalized last month.
"The state has not acted in good faith," Barrick CEO Mark Bristow said. "We will use every legal measure at our disposal to hold the state and the individuals involved accountable for these unlawful actions."
Loulo-Gounkoto, located in western Mali near the Senegal border, is one of Africa's largest gold operations and was among Barrick's top-performing assets, contributing 578,000 ounces in 2024 (roughly 15% of the company's annual production) before its suspension.
The site has nearly 20 million ounces in reserves, but with all-in-sustaining costs totaling about $100 million per quarter, the administrator's decision to sell the gold is unsurprising. However, the government's capability to operate such a project is debatable.
Bristow expressed skepticism, warning that such an endeavor could lead to "severe damage to the long-term prospects of the mine." Sources familiar with the matter stated that it could take at least four months to restore normal production levels and likely much longer under provisional state management due to the absence of skilled expatriate staff and the disruption of critical systems.
According to the latest update, Barrick has confirmed that the arbitration process with the International Centre for Settlement of Investment Disputes is now fully underway.
The company has requested provisional measures to prevent further escalation and safeguard its legal rights.
Mali's changes to the mining code have negatively contributed to the country's output. The country produced 51 metric tons of gold in 2024, representing a 23% decline from the 66.5 tons produced in 2023.
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