An Australian mining company said it would pay the military government of Mali $160 million after the authorities detained three of its executives for over a week in a dispute about taxes.
Terence Holohan, the chief executive of the company, Resolute Mining, was detained in the West African country’s capital, Bamako, on Nov. 8 with two other employees, after discussions with the mining and tax authorities. At the time, the company said claims the government had made against it were “unsubstantiated.”
But on Monday, Resolute Mining agreed to make the payment to the Malian government.
Beverly Ochieng, an analyst focused on the Sahel region of Africa for the security consulting firm Control Risks, said the government was moving toward nationalizing mining. But in the meantime, she said, it is facing a serious economic crisis as it tries to fight off rebels and terrorist groups, and is looking for ways to get cash.
“They need to fund the government and the intense military operation,” Ms. Ochieng said.
Resolute Mining said in a statement that it had “made an initial settlement payment of approximately U.S. $80 million to the government from existing cash reserves, with future payments of approximately U.S. $80 million to be made in the coming months.”
The company said that it was working with the Malian government toward the release of the detained three employees, and that they were all “safe and well.”
Since a coup overthrew Mali’s government in 2020, the country has become estranged from its Western partners and has drawn closer to Russia. The Russian government has sent weapons, helicopters and mercenaries from the Wagner group to help Mali fight Islamist insurgents and rebels.
Last year, Mali signed a deal with Russia to build a gold refinery in Bamako. Also that year, after an audit of mining contracts, the government said it was taking in too little revenue from the industry and that it was granting too many tax breaks to companies.
In August, Mali adopted a new mining code that allowed the state to collect more money and to have 35 percent stakes in new mining projects. Since then, it has been renegotiating contracts with mining companies, and in some cases it has presented companies with large bills for what it says are taxes owed.
The detention of Mr. Holohan and his colleagues followed an earlier case in which senior local staff members for a Canadian company, Barrick Gold, were held for a few days. Analysts said they expected that there might be more detentions ahead. “It seems this is a system the junta will continue using as a way of enforcing the mining code,” Ms. Ochieng said.
That could, however, prove risky for Mali’s fiscal health. “If they retreat,” Ms. Ochieng said about mining companies, “that might be detrimental for local employment, businesses and economic growth.”
Mali is one of Africa’s top producers of gold, which supplies it with most of its export earnings. It also has lithium and manganese, critical minerals necessary for technologies like electric cars.
Mali is one of several African countries pushing for a greater share of their valuable minerals in the past few years. Niger recently stripped a Canadian-owned company of its permit to mine uranium. And Burkina Faso’s president said foreign companies mining gold would have some of their permits revoked.
“We know how to mine our gold, and I don’t understand why we should let multinationals come and mine it,” the president, Ibrahim Traoré, said in a radio address last month.
Resolute is a longtime mining actor in West Africa. It has operated in the region for more than 30 years and acquired the Syama mine, 180 miles southeast of Bamako, in 2004. As of 2021, it was the fourth largest in Mali.
Like other major mining companies operating in Mali, Resolute has continued working with the government despite numerous accusations of human rights abuses by its military and its main security ally, the Wagner mercenary group.
It is unclear what the $160 million requested by Mali’s government was for, but it represents nearly four years of the taxes Resolute reports paying. Resolute paid $69 million to the Malian government in 2022, including $42 million in taxes, according to company’s documents.
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