AUSTRALIAN gold miner Resolute Mining announced on Monday it will pay $160 million to Mali’s government to resolve a tax dispute. The agreement follows the detention of Resolute’s CEO, Terence Holohan, and two other employees earlier this month.
Resolute confirmed an initial payment of $80 million has been made using existing cash reserves. The remaining $80 million will be paid in instalments over the coming months, sourced from the company’s liquidity resources.
The dispute has unsettled investors, with Resolute’s shares tumbling by as much as 14.3 percent on Monday morning to A$0.345, the lowest level since March.
The detained employees, including CEO Terence Holohan, were in Mali’s capital, Bamako, engaging with mining and tax officials over the company’s business practices. Despite the arrests, Resolute has reassured stakeholders that the staff remain ‘safe and well’ and are receiving support from UK and international embassies.
Efforts are ongoing to secure their release, the company said, as it continues negotiations with Malian authorities.
Mali, a top gold producer in Africa, has increasingly scrutinised mining companies to extract more revenue from the sector. This is not an isolated incident; similar detentions have recently targeted senior staff of other mining companies, including Canada’s Barrick Gold.
Resolute’s Syama gold mine, one of its two operational sites, plays a critical role in the company’s portfolio. The mine contributed nearly two-thirds of Resolute’s 2023 annual production of 329,061 ounces of gold. Resolute holds an 80 percent stake in Syama, with the remaining 20 percent owned by Mali’s government.
Despite the challenges, Resolute has confirmed that production at Syama remains uninterrupted. ‘The Company notes that operations on site continue as normal and have not been impacted,’ Resolute said in its statement.
This assurance comes as a relief to investors, underscoring the Malian government’s commitment to maintaining operational stability within its mining sector while addressing fiscal responsibilities. The increased scrutiny reflects Mali’s broader effort to ensure that foreign investments align with national development priorities, particularly in resource-rich regions.
Resolute’s case highlights the necessity for mining companies to operate transparently and adhere to local regulations in host countries. While foreign investors may perceive this as heightened risk, Mali’s actions signal a determination to secure equitable returns from its natural resources, ensuring benefits for its economy and citizens.
The settlement with Resolute not only stabilises the company’s immediate operations but also sets a precedent for constructive dialogue between the government and the mining sector. It reaffirms Mali’s stance on balancing investor interests with national sovereignty, a growing trend among resource-rich nations seeking fairer partnerships with global stakeholders.
