A court in Bamako has ordered the temporary transfer of operational control of Barrick Mining’s (TSX:ABX,NYSE:B) Loulo-Gounkoto gold-mining complex to a state-appointed administrator for six months.
The ruling, handed down on Tuesday (June 17) by the Tribunal de Commerce, empowers former health minister and certified accountant Soumana Makadji to run one of Barrick’s most lucrative global assets.
The company has described the move as “unjustified” and “unprecedented.”
According to Judge Issa Aguibou Diallo, the ruling was made under Article 160-1 of the OHADA corporate law framework, which allows a court to appoint a provisional administrator when the regular functioning of a company becomes impossible. The administrator, Makadji, is tasked with reopening the mine site, participating in negotiations with Barrick and reporting to the court on a quarterly basis — though not to the government.
Makadji is seen in Bamako as a technocrat with strong ethical credentials. His appointment is intended to stabilize operations at Loulo-Gounkoto, which Barrick suspended in January 2024 after the Malian government physically removed unsold gold from the mine and froze the company’s ability to export.
Despite the administrative change, Barrick maintains that its subsidiaries remain the legal owners of the mine.
In a statement released on Monday (June 16), the company emphasized that its “ongoing efforts to reach a constructive and sustainable resolution” have been met with escalatory actions by the state.
“While the company has made a number of good-faith concessions in the spirit of partnership, it cannot accept terms that would compromise the legal integrity or long-term viability of the operations,” Barrick said.
Arbitration and legal fallout
Barrick has already launched international arbitration proceedings at the World Bank’s International Center for Settlement of Investment Disputes, as per a May 29 Reuters article.
The company has asked the tribunal to declare that its Malian subsidiaries are protected under longstanding mining conventions, which it argues are not subject to retroactive legislative changes. Mali, however, contends that the convention covering Loulo expired in April 2023, subjecting it to the updated mining code.
The arbitration tribunal has now been formally constituted, and Barrick has filed a request for provisional measures to prevent Mali from further intervening until the dispute is resolved.
A disputed settlement
In February 2024, a tentative settlement appeared close. According to Jeune Afrique, Barrick had agreed in principle to pay 225 billion West African CFA francs (roughly US$396 million) in instalments, recognize the new 2023 mining code and convert Mali’s 20 percent equity stake in Loulo-Gounkoto into “priority shares.”
The government would in turn release the seized gold and free the detained executives.
But the deal collapsed. A Malian negotiator later claimed Barrick had signed the “wrong” agreement and warned the government had “the right to take control of the mines” if the company failed to resume operations.
The ruling junta, led by Colonel Assimi Goïta, has made resource nationalism a hallmark of its post-coup economic strategy. Since coming to power in 2020, the military-led regime has shown a willingness to pressure foreign firms to comply with state priorities, especially in strategic sectors like mining.
The Loulo-Gounkoto dispute is now emblematic of the wider uncertainty surrounding foreign investment in Mali, a country where gold accounts for over 70 percent of export earnings.
Future implications
Loulo-Gounkoto is a cornerstone of Barrick’s global portfolio.
In 2023, the complex produced 723,000 ounces of gold, second only to Barrick’s Carlin mine in Nevada. It boasts remaining reserves of 7.3 million ounces, making it one of the largest high-grade gold systems in the world.
The financial implications of the shutdown are significant. Analysts warned in December that continued disruptions at the site could cut 11 percent from Barrick’s projected 2025 EBITDA.
Morningstar had earlier projected that Loulo-Gounkoto would contribute 250,000 ounces to Barrick’s output this year — an estimate now scrapped from the company’s 2025 guidance.
Further complicating matters, the permit for the Loulo section of the complex is set to expire in February 2025, just weeks after the six month provisional administration period ends. Barrick said it applied for a renewal four months ago, but has received no response from the government. The Gounkoto permit remains valid for another 17 years.
Barrick has said it remains committed to reaching a “mutually acceptable solution” and has appealed the court’s decision. But with no public comment from the Malian government and the provisional administrator now in place, a quick resolution appears unlikely.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
