Barrick Mining (TSX:ABX,NYSE:B) has taken a major step toward ending its months-long standoff with Mali, confirming a deal that will restore its control over one of Africa’s most productive gold operations.
After reports that the two sides had reached an agreement in principle circulated last week, Barrick confirmed on Monday (November 24), it will withdraw its arbitration claim at the World Bank’s dispute-resolution center.
In a more recent development, people familiar with the matter told Bloomberg that the deal includes a 244 billion CFA francs (US$430 million) settlement.
Under the terms described by those sources, Barrick is expected to pay 144 billion CFA francs within six days of signing, with an additional 50 billion CFA francs to be covered through VAT-credit offsets.
Another 50 billion CFA francs had already been paid last year, the sources said, though Barrick declined to comment on whether the deal included a settlement component.
In return, Mali will drop its charges against the company, end state control of the Loulo-Gounkoto complex, and take legal steps to release the four detained employees. The government also confirmed that Barrick’s permit for the Loulo mine, which was set to expire in February, will be renewed for another decade.
The deal is also conditioned with the company accepting the country’s 2023 mining code, the very issue that triggered the confrontation.
Tensions spiked in January when Mali’s military government halted gold exports, detained senior Barrick personnel and seized several tonnes of gold from the site.
A local court later appointed former health minister Soumana Makadji to run the operation under state oversight, effectively pushing Barrick out of a mine it has long managed through a joint venture.
The agreement marks a significant reversal of that intervention and paves the way for Loulo-Gounkoto to return to normal operations.
Production only resumed in late October after a separate deal to restart payments to local contractors, though at that time Barrick did not comment publicly on the arrangement.
Monday’s settlement with the government now sets the stage for a full restoration of the joint venture.
The breakthrough also comes as the company faces intensifying pressure on multiple fronts, as activist investor Elliott Investment Management has recently acquired a major stake worth at least US$700 million in the company.
Elliott is known for forcing corporate overhauls in the mining sector, and its arrival has sharpened scrutiny of Barrick’s performance after a year marked by falling production and rising costs.
The company has lagged peers despite record-high gold prices, with analysts citing the setbacks in Mali, ongoing concerns around the massive Reko Diq project in Pakistan, and turbulence in the executive ranks.
That turbulence erupted publicly in September with the abrupt exit of longtime chief executive Mark Bristow, whose relationship with Barrick chair John Thornton had reportedly deteriorated after years of missed guidance and strategic disagreements.
Sources told the Financial Times the two had barely been speaking by the time headhunters were commissioned to evaluate successors.
Interim chief executive Mark Hill has been trying to stabilize the company with a sweeping reorganization. In an internal memo reviewed by Bloomberg, he said Barrick would fold the Pueblo Viejo mine into its North American division and merge its Latin America and Asia Pacific operations.
He also announced leadership changes to sharpen the focus on Barrick’s Nevada mines, one of the company’s most valuable assets but also the site of serious safety lapses this year.
The restructuring has revived speculation about whether Barrick could eventually split its portfolio into separate companies or become a takeover target.
Currently, the company trades at a lower valuation multiple than rivals, making its assets particularly attractive if separated into a North America-focused unit and other housing operations in Africa, Latin America and the Asia Pacific region.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.