Mali restarts Barrick's Loulo-Gounkoto gold mine without company’s consent; plans $107M gold sale as part of state-led operations. Barrick challenges move as illegal amid ongoing two-year dispute and regional push for greater control of mining revenues.

The court-appointed administrator overseeing Barrick Mining's Loulo-Gounkoto complex in Mali plans to sell one metric tonne of gold stored on-site, marking the resumption of activities following a nearly six-month halt in operations, according to two sources who spoke with Reuters.

Mining operations at the site were suspended in January when the Malian government confiscated gold from the Loulo-Gounkoto complex, prompting Canadian mining giant Barrick Gold to pause its activities. Last month, the government appointed former Health Minister Soumana Makadji as a temporary administrator. Two separate sources confirmed that Makadji enlisted Samba Toure, the current chair of the state mining company and a former Loulo-Gounkoto executive, to assist with restarting operations.

Prior to the suspension, the Loulo-Gounkoto complex contributed approximately 15% of Barrick's total gold production. Barrick is the world’s third-largest gold miner. The shutdown not only impacted Mali’s overall gold output but also highlighted escalating tensions between the country’s military-led administration and international mining firms.

Barrick has pushed back strongly against the new administrator’s reported plans. CEO Mark Bristow told Reuters that the company had only been informally notified about the site's reactivation and the gold shipment.

“If it is true, any plans by the administrator to restart operations and sell gold on the site in our view would be illegitimate,” Bristow said.

The plant resumed operations on Monday for the first time since January, as confirmed by three other sources. However, neither Makadji nor Mali’s Ministry of Mines responded to Reuters’ requests for comment. Efforts to reach Samba Toure were also unsuccessful.

Barrick had initially suspended operations following a series of moves by the government, including blocking gold exports, detaining executives, and seizing bullion. The company subsequently launched international arbitration proceedings to address the ongoing dispute.

The restart of the complex follows a two-year standoff between Barrick and Mali’s government, largely stemming from alleged tax issues and Barrick’s resistance to adopting a new mining code aimed at boosting state revenue in light of rising gold prices. This regulatory pressure reflects a broader trend across West Africa, where military regimes in Mali, Burkina Faso, and Niger are demanding a greater share of the wealth generated by their natural resources.

Gold prices have surged by 25% since the beginning of the year, peaking at $3,500 per ounce in April, according to Reuters data.

The proposed sale of one tonne of gold, which has remained in the site’s gold room since operations were halted and is separate from the three tonnes seized in January, would be among Makadji’s first major decisions since taking control. The Loulo-Gounkoto operation is the largest gold mine in Mali and the third-largest in Africa.

Proceeds from the planned gold sale, estimated at around $107 million, are reportedly intended to fund operational costs such as salaries, fuel, and outstanding contractor payments. Industry observers note that restarting the mine without Barrick’s involvement could establish a precedent for direct state intervention in the region’s mining sector.

In response, Barrick has pledged legal action against what it considers unlawful actions by the Malian authorities.

“We will use every legal measure at our disposal to hold the state and the individuals involved accountable for these unlawful actions to protect our people and to defend our investments,” Bristow said. He accused Mali’s government of acting in bad faith.

Three sources present at meetings with Makadji confirmed he had reassured Barrick employees, union representatives, and subcontractors that he intended to maintain operations and ensure the continuation of salaries.

Despite these assurances, insiders described major operational hurdles facing the new administration. Six individuals familiar with the situation indicated that the mine’s sheer scale presents significant challenges.

“Even if production starts, we would need at least four months to get back to normal pace – and four months was the scenario with Barrick Gold, but now it’s the provisional administration, so it will probably be more,” one source noted.

Barrick has since revised its 2025 production forecast downward. Bristow expressed skepticism about the provisional administration’s ability to manage the complex effectively.

“We do not believe that the administrator and his advisers can run this mine,” he said. “We are concerned that such attempts will cause severe damage to the long-term prospects of the complex.”

In the quarter ending December 2024, the Loulo-Gounkoto mine had an all-in sustaining cost of $100 million, a common metric used in the mining industry to assess the total cost of producing an ounce of gold.

Since losing operational control of the mine, Barrick has restricted email and intranet access for Mali-based staff. Only employees based in Bamako received salaries for June; workers on-site were not paid, according to three sources.

Bristow stated that the administrator was now responsible for paying June wages and that Barrick had provided a comprehensive handover document. Two sources noted that bringing back critical expatriate staff would be difficult, citing the example of Australian jumbo drill operators who have not returned since January.

The exodus of expatriates began last year after the Malian government detained the CEO of Resolute Mining during discussions around the new mining code and issued an arrest warrant for Bristow. Some local staff have since been reassigned to overseas postings, others have resigned, and many contractors—who have not been paid since January—have either suspended activities or laid off employees in Mali.