By William Clowes and Katarina Höije
Mali is demanding Australian gold producer Resolute Mining pay about $US160 million ($250 million) to resolve a tax dispute after the government detained its chief executive, according to people familiar with the matter.
CEO Terry Holohan and two colleagues have been held in the capital, Bamako, since late last week after the Resolute boss travelled to the city for meetings with the nation’s tax and mining authorities. The detention comes as the military rulers of Africa’s third-largest gold producer ratchet up pressure on mining companies to renegotiate economic terms.
Resolute Mining chief executive Terry Holohan is detained in a hotel in Bamako.Credit: Resolute website
The government’s position is that Resolute – which operates the Syama gold mine – should pay the state 100 billion CFA francs ($249.9 million) to settle a dispute mainly concerning alleged back taxes following a sector-wide audit, the people said, asking not to be named as the matters were private.
The parties have been discussing a potential agreement that would see the company pay half that sum now and half at a later date, one of the people said.
Resolute declined to comment on Wednesday. The claims against the firm were “unsubstantiated,” the Perth-based miner said in a statement on November 11. “The company is continuing to work with the government on a resolution.”
Mali’s mines and finance ministries didn’t respond to requests for comment.
Government negotiations
Resolute previously negotiated a so-called convention for its Syama asset that runs until 2029, but the nation’s junta have upped pressure on firms with operating gold projects in the country after passing legislation last year that increases the state’s share of economic benefits from mining projects. Their toughening stance also coincides with a 25 per cent jump in the price of bullion this year.
Resolute’s shares have slumped more than 35 per cent this week since news of Holohan’s detention became public, cutting its market value to $916 million.
The authorities have also threatened to reclaim Barrick Gold’s Loulo mine permit when it expires in 2026. Mark Bristow, CEO of the world’s no. 2 gold producer, said last week that his company is discussing a “mutually acceptable outcome” with Mali’s leaders.
Leader of Mali’s ruling junta, Lieutenant Colonel Assimi Goita (centre), at a military parade in Bamako, Mali in 2022.Credit: AP
Allied Gold and B2Gold have recently announced agreements that will govern the future operations of their Sadiola and Fekola projects in the country. They will pay about $US116 million and $US204 million respectively to the state under the deals, according to company statements.
Mali has been under military rule since 2020, when interim leader Colonel Assimi Goita ousted the West African nation’s elected president, citing the previous regime’s failure to repel the Islamist insurgents.
Since then, mercenaries from the Kremlin-backed Wagner Group have been deployed to the country, while European forces and a United Nations peacekeeping mission were forced to withdraw.
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