Mining company Barrick Gold has suspended operations in Mali after the military government seized gold stocks from the company’s Loulo-Gounkoto complex and flew them out by helicopter on 11 January.

According to Reuters, three metric tonnes of gold, valued at around $245m, was taken on Saturday.

Why was the gold seized?

The seizure is the culmination of the ongoing spat between Mali’s military government and several gold mining companies in the country over contracts and revenue sharing between the government and foreign mining companies.

Since coming to power in 2021, Mali’s junta has implemented a number of changes to mining regulations, reflecting a shift toward resource nationalism and a push for greater state control over the country’s mineral wealth.

Mali’s revised mining code published in September 2023 increased the government’s stake in mining projects to up to 35% and removed tax exemption for mining companies.

While contracts between the government and some of the smaller mining companies in the country have been renegotiated, those with larger mining companies, including Barrick, are still ongoing, with the Malian government stating that some are in breach of the new terms.

Which mining companies have been affected?

Mali’s government has intensified pressure on international mining companies, detaining senior executives and seizing gold when firms allegedly fail to comply with new regulations.

In October last year, Mali accused Barrick Gold of failing to honour its commitments and arrested four Barrick employees who remain in detention while they await trial. On 5 December, Mali’s government issued an arrest warrant for Barrick’s CEO, Mark Bristow, on charges including money laundering.

Two weeks later, the company submitted a request for arbitration to the International Centre for the Settlement of Investment Disputes (ICSID) to resolve disputes with the Malian authorities.

Mining companies have invested hundreds of millions of dollars in massive mining projects; it will be difficult to pack up and leave

Since 6 January, the company has been banned from shipping gold from its Loulo-Gounkoto mining complex in Mali – gold was seized from the site just a few days later and the company suspended operations in the complex.

Barrick Gold has been present in Mali for the last 28 years, employing around 8,000 people and contributing nearly $10bn to the country’s economy over the last 10 years.

In November, CEO of Resolute Mining Terry Holohan and two other employees of the Australian mining company were detained following a tax dispute between the government and the mining company.

They were released after Resolute paid $80m to the authorities to resolve a tax dispute, with a promise to pay an additional $80m in the coming months.

How will the extra revenue be spent by the government?

According to Bloomberg, Mali is set to earn 750bn CFA francs ($1.2bn) from mining companies in the first quarter of 2025 as a result of the country’s interventionist stance. If channelled towards public services, this could allow for upgrades in infrastructure, education, healthcare and social programmes.

“But in reality, we have no real idea where the money will go,” says Bram Posthumus, an independent regional correspondent based in Abidjan. “But we can assume that much of it will be used to fund the ongoing war.”

Since 2012, Mali has been embroiled in a violent conflict fuelled by Islamist insurgents. In recent years, the government’s shift toward Russian mercenaries, particularly the Wagner Group, has further complicated efforts to stabilise the country and address both security and political challenges.

“Wagner mercenaries don’t come cheap at around $10m a month,” says Posthumus. “Given the fact that gold is the country’s only major income stream, I think it is fair to say that much of the income generated from these new contracts will go to pay Russian mercenaries.”

How will this change the gold mining industry in the Sahel?

Mali is not the only mineral-rich country in Africa reshaping mining regulations to secure a larger share of revenue. Niger and Burkina Faso, both governed by military juntas, are also moving to renegotiate contracts and gain greater control over their natural resources.

But despite the treatment of international companies to date, few companies have pulled out of the region and instead have had to agree to deals with the military juntas to continue mining, says Tristan Gueret, senior analyst at Control Risk, based in Paris.

“So far, we haven’t seen any mass divestment out of the region despite some of the extreme measure[s] place[d] on the companies to comply with new regulations and sign up to new contracts,” says Gueret.

“I think one of the biggest reasons for this is the sunken cost. Mining companies have invested hundreds of millions of dollars in massive mining projects; it will be difficult to pack up and leave,” he says.

But how far can the Sahel’s military juntas push the boundaries before international mining companies are forced out? “If these companies leave, the gold stops flowing, revenue dries up and they lose the ability to fund the war effort,” says Posthumus.

While Barrick has suspended operations other companies have conceded to Mali’s new terms. “Indeed, seizing gold stock and detaining people are pretty radical moves and that hasn’t pushed them out as yet,” says Posthumus. “It will be difficult to predict what will happen.”