MALI is demanding that Australian gold producer Resolute Mining Ltd. pay approximately $160 million to resolve a tax dispute after the company’s chief executive, Terry Holohan, and two colleagues were detained in the capital, Bamako. The CEO had travelled to the country for meetings with local tax and mining authorities when the detention took place late last week.
Tax dispute over alleged back payments
Mali’s government claims that Resolute, which operates the Syama gold mine, owes CFA100bn (around $162 million) in taxes, mainly related to back payments following an audit of the mining sector. Negotiations have been ongoing, with discussions about the possibility of Resolute paying half of the sum upfront and the remainder at a later date.
Despite the tense situation, Resolute’s shares fell by 4.1 percent in Sydney on Thursday, contributing to a 35 percent drop in its market value since the detention became public. The company’s current market capitalisation stands at approximately A$884 million ($574 million).
Resolute denies ‘unsubstantiated’ claims
Resolute Mining, based in Perth, has yet to make a formal comment, but the company previously denied the claims, calling them ‘unsubstantiated.’ A spokesperson stated that they are continuing discussions with the Malian government to reach a resolution. However, Mali’s mines and finance ministries have not responded to requests for comment.
Increasing pressure on mining companies
This dispute comes amid growing pressure from Mali’s military rulers on mining companies to renegotiate their agreements. Since the junta’s rise to power in 2020, following a coup led by Colonel Assimi Goita, the government has introduced tougher legislation, which increases the state’s share of the economic benefits from mining operations.
This hardline stance coincides with a surge in global gold prices, which have jumped by 25 percent this year. The Malian government has also threatened to revoke Barrick Gold’s Loulo mine permit when it expires in 2026.
In response, several other mining companies have made similar agreements with the government. Allied Gold Corp. and B2Gold Corp. have recently finalised deals for their operations in the country, agreeing to pay $116 million and $204 million, respectively, to Mali.
Military rule and economic uncertainty
Since Mali has been under military rule, it has faced increasing international isolation, with Russian mercenaries from the Wagner Group replacing European forces and UN peacekeepers. The government’s tough approach towards foreign businesses reflects its broader efforts to restructure the nation’s economy amid growing security challenges.
The situation highlights the difficult balance Mali is trying to strike as it seeks greater control over its natural resources while navigating the complexities of foreign investment and economic reform.
