Mali’s detention of Resolute executives part of strong-arm ‘formula’ to squeeze miners
Mining executives say the reported detention of Resolute Mining chief executive Terry Holohan and other expatriate staff in Mali is part of an increasingly hard-line campaign by the African country’s military government aimed at squeezing more out of foreign-owned miners.
Mali insiders said on Sunday the military junta had no compunction about targeting staff at offshore miners operating in the impoverished nation in order to bring their companies into line with a new mining code that provides more financial benefits to the country.
“It’s a formula now,” said one company boss operating in West Africa who did not want to be identified.
“The writing has been on the wall in Mali now for some time, and it’s red, it’s large and it’s concerning,” said another who has worked in the country.
At the risk of losing mining licence, most miners are bowing to the Junta-led Government’s demands, agreeing to renegotiated operating terms that provide for increased Mali ownership of their mines or additional multi-million dollar payments to the Government.
However, Mali’s strong-arm tactics will only increase investor reservations about the sovereign risk of backing companies with operations in broader West Africa.
Founded in WA, dual-listed Resolute maintains an office and local directors in Perth – Sabina Shugg, Adrienne Parker and Lawrence Jackson – but its management has relocated to London in recent years.
The chair, Briton Andrew Wray, lives in the British capital.
Mr Holohan, another Briton, resides in Hungary, according to the company’s filings with the Australian corporate regulator.
It was suggested on Sunday by companies operating in Mali that Resolute had been dragging its heels on a new mining deal for its flagship Syama underground and open cut mining complex as part of a revised mining code introduced last year, telling investors it expected the country to honour previous commitments out until 2029.
“You renegotiate if you want to remain in Mali, it’s that simple,” one executive said.
Two months ago, the junta briefly jailed four of Barrick’s local executives over alleged “financial crimes” amid long-running talks on the implementation of new rules governing its Loulo-Gounkoto project, one of Mali’s biggest gold mines.
The new mining code provides for State and local private investors to own 35 per cent of any Mali mine, up from 20 per cent previously.
Barrick has since said it is working with the Government to reach a resolution after it was reported Mali was seeking $US500 million in unpaid taxes from the group as it looks to increase revenue from the mining sector, its biggest earner.
However, there have been a rush of announcements from other miners, including Canada’s B2Gold and Apollo Minerals, who are now working to revised deals.
Most of Mali’s miners are focused on gold. But the country’s emerging lithium miners are also being hit up.
London-listed Kodal Minerals, managed from Perth, last week announced it and Chinese partner Hainan would pay $US15m to the Government as part of a deal transferring its mining licence to a joint venture company 35 per cent owned by Mali.
Kodal and Hainan are developing the Bougouni lithium project in southern Mali with the aim of beginning production in the first quarter of 2025.
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