International mining companies are at the mercy of the “terrible” tactics of military regimes in Africa’s Sahel region, whose leaders use legal disputes, nationalizations and arrests to seize critical minerals such as gold and uranium. They advocate strengthening management.
Barrick Gold announced on Tuesday that it would close its operations in Mali after Mali’s government began seizing gold from its mines, weeks after the country issued an arrest warrant for CEO Mark Bristow. There was a pause. Separately, authorities detained Terence Holohan, the chief executive of Australian gold mining company Resolute, for nearly two weeks.
Niger also stripped French state-run nuclear producer Orano of mining rights to one of the world’s largest uranium reserves, while Australia-based gold miner Salama Resources said the junta had canceled exploration permits for the project. As a result, arbitration proceedings against Burkina Faso have begun.
The three countries are part of what is known as Africa’s “coup belt” after being occupied by military governments from 2020 to 2023.
People familiar with the administration’s thinking say their more interventionist stance is aimed at contracts that have been dominated by Western miners for decades and that the new rulers see as tilted in favor of companies. It is said that this stems from a desire to assert national sovereignty after becoming a nation.
They are pushing for reforms to mining laws, demanding higher taxes and greater stake in the industry, but they are also resorting to restricting operations, issuing arrest warrants and detaining workers.
“It’s scary to do business with the (Malian) regime,” said one person involved in the negotiations, speaking on condition of anonymity. “They are filing arbitrary lawsuits against companies to force them to negotiate and threatening them with arrest.”
Niger’s government has announced that the Orano mine will be returned to “national public land.” Burkina Faso’s military junta leader Ibrahim Traore said in October: “We know how to mine gold, so I don’t understand why we would want multinational companies to come and mine it.”
This pressure tactic poses a major problem for the global mining industry, as companies around the world seek to secure long-term supplies of uranium and increase production of gold, whose price has soared to record highs.
These countries are part of the semi-arid sub-Saharan region known as the Sahel, one of the world’s poorest countries but rich in mineral resources.
According to the World Gold Council, Burkina Faso and Mali produced more than 200 tonnes of gold in 2023, with the latter ranking second on the continent. Niger has one of the world’s largest uranium reserves, supplying a quarter of the EU’s uranium needs.
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They were seized by military leaders after suffering more than a decade of violent Islamist insurgency. This led to a broader geopolitical realignment, with each regime severing longstanding ties with former colonial power France and the West in favor of closer ties with Russia.
While all three countries have expelled French troops, Mali and Niger have hired mercenaries from the Russian Defense Ministry’s Afrika Korps (formerly the private Wagner Group). U.S. forces withdrew from Niger last year.
Some companies, including Toronto-listed B2 Gold, Allied Gold and Robex Resources, are negotiating deals with the government, but industry insiders say the situation is likely to get worse.
Canada’s Barrick, the world’s second-largest gold miner by market capitalization, lost control of Lulo, the company’s second-highest gold producer in 2023, after seven weeks of off-site shipping restrictions.・The Gounkoto mining complex was closed. Mali had also begun extracting precious metals from the mine on Saturday following an interim court order, according to a letter obtained by the Financial Times.
The Malian government also hired external advisors to lead negotiations on its behalf. Mamou Touré is leading the agency, people familiar with the process said. The veteran executive spent 10 years at London-listed mining company Randgold, which merged with Barrick in 2018 before co-founding his own mining consultancy.
Touré confirmed he was working on negotiations, but declined to comment further. Western mining executives said Mr. Touré convinced Mali’s military junta that he could extract more money and concessions from the mining group.
Finance Minister Arseni Sanu told parliament last week that Mali is expected to receive $1.2 billion in revenue in the first quarter of this year following changes to its mining laws.
New opportunities exist for international organizations whose governments are allied with Sahel countries. Ganfeng Lithium, China’s largest lithium producer and the world’s third largest, opened a mine in southern Mali last month. Junta leader Assimi Goita described China as a “strategic and sincere” partner.
Barrick’s decision to begin legal proceedings, despite his reluctance to file for arbitration in recent years, “shows how bad things are,” one lawyer said.
However, the plight of Orano, whose largest shareholder is the French government, encapsulates the intertwining of big business and geopolitics in the Sahel region.
As relations between France and Niger deteriorate, Mr. Orano has been embroiled in a series of complications since soldiers of the Presidential Guard ousted pro-Western former president Mohamed Bazoum in a 2023 coup. France criticized Bazoum’s ouster, and junta leader General Omar Chiani accused Paris of trying to overthrow the new government.
“The French state, through its head of state, has declared that it does not recognize the current authorities in Niger,” Niger’s mining minister, Colonel Abarki Ousmane, told Russian state news agency RIA Novosti. “Do you think it is possible for us in Niger state to allow French companies to continue extracting our natural resources?”
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Orano reported a loss of 133 million euros in the first half of 2024 due to problems with uranium production in Niger. In June, the company was stripped of its mining rights at the country’s Imouralen mine, and in October it was forced to suspend production at the Arlit mine due to financial difficulties. Since the coup, Niger has suspended debt payments as a joint venture partner and blocked uranium exports.
The company said it “intends to protect its rights together with the competent authorities” and that “only a desire shared by all stakeholders to re-establish a stable and sustainable mode of operation will enable a peaceful resumption of operations.” “I will.” Last month, Mr. Olano began arbitration proceedings against Niger.
Mukahid Durmaz, an analyst at risk intelligence firm Verisk Maplecroft, said despite the government’s “increasingly hardline approach”, the cash-strapped junta was telling miners to “pack up and leave”. Rather than forcing it, he said he was looking at it as a “lucrative” source of additional income. ”.
But companies will need to get used to these tougher tactics, he added. “We expect this wave of nationalist behavior to become the norm in Sahel countries.”
Data visualization and mapping with Aditi Bhandari
