Latest News

Mali arrests, Niger site seizure rattle Western miners

The arrest of mining executives in Mali, dangers by Burkina Faso's junta to strip permits and the seizure of a Frenchrun uranium website in Niger have unsettled Western miners running in West Africa and could limit even more investments.

Day-to-day production in Mali and Burkina Faso has up until now been mostly unaffected.

The escalation is anticipated, nevertheless, to hit companies seeking financing and insurance coverage - curbing supply growth in Africa's engine of gold output, more than a lots individuals, including mining staff members, financiers, insurance providers and federal government sources, told Reuters.

The push by Mali, Burkina Faso and Niger's military governments to renegotiate terms with mining companies and gain a bigger share of revenues has actually coincided with a rise in gold and uranium rates.

It has also followed a series of coups, starting with Mali in 2020, and the three countries' shift towards Russia and away from their standard backers France, the United States and the United Nations.

Moscow has enhanced its military and diplomatic presence in the region. There is no proof yet Russian companies have positioned themselves to take over mining possessions, however analysts stated that might not be dismissed.

We wouldn't purchase Mali now, a Western fund manager told Reuters, including record gold prices had actually made miners running in the Sahel an apparent target for juntas. The fund supervisor asked not to be named.

Over the last years, business keen to profit from West African gold countered the spreading hazards posed by Islamist militants broadening from their initial stronghold in northern Mali by working with federal governments to boost security.

However relations have actually soured since the coups.

Mali, Africa's second greatest gold producer in 2015, according to the World Gold Council (WGC), performed an audit of operations and rolled out a new mining code, activating talks over new agreements and outstanding tax bills.

Arrests of personnel from Australia's Resolute Mining and Canada's Barrick Gold by military authorities have collected pace because September. Mali issued an arrest warrant for Barrick CEO Mark Bristow recently.

The country has actually up until now gotten or been guaranteed over $635. million in additional tax payments from different companies,. Reuters computations show.

Four Barrick Gold staff members are apprehended in Mali's capital. Bamako pending trial. Barrick, the world's No. 2 gold miner, stated. in November it was seeking to strike a deal.

Barrick did not respond to requests for remark for this. story.

ALTERED EQUATION

Home to huge, untapped gold reserves, mining financial investment in. West Africa has actually risen in the last 15 years, though Mali, Niger. and Burkina stay amongst the world's poorest countries.

Mali's gold output has more than doubled to 105 metric loads. since in 2015 from 2010 levels, WGC information show. With Burkina. Faso and Niger, it accounts for a quarter of the continent's. gold production.

Mali's junta pledged to review mining agreements in 2020. Some companies, including B2Gold, signed brand-new agreements with the. government. Last month, Resolute Mining made $100 million in. payments to Mali after its chief executive was detained during a. see. Mali implicates Barrick of owing as much as $500 million, which. Barrick rejects.

A Malian government source said the brand-new mining code. seeks to deal with inequalities in agreements with business. without killing the industry. Mali's mines ministry did not. immediately respond to a request for comment.

In an indication of worry over Mali, Canada's Robex Resources. said in September it was seeking to sell its Nampala. mine in Mali but it had not gotten any reasonable deal.

Due to the geopolitical context for investments in Mali,. the marketplace of potential purchasers is presently very restricted. Robex. did not react to requests for more comment.

Insurance companies are more mindful about the risks they underwrite,. stated Gallagher's Racheal Tumelty, head of Political Threat. Australia, who has formerly brokered insurance for tasks in. Mali and other West African countries.

Premiums for some West African countries had nearly trebled. as of late 2023 compared to 2019, she stated.

TAKING BACK PERMITS

Challenges in the Sahel did not apply to the larger area of. West Africa, Jeff Quartermaine, CEO of Perseus Mining,. stated, so events in Mali had no influence on the Australian-listed. miner's operations in seaside Ivory Coast or Ghana.

However others see alerting indications for the industry.

In Niger, where the junta tore up a defence contract with. previous colonial power France quickly after concerning power last. year, authorities have actually taken control of French nuclear fuels. company Orano's Somair uranium mine, the company stated recently.

London-listed Endeavour Mining sold two of its gold. mines to the Burkina Faso federal government for $60 million, having. flagged a preliminary arrangement of $300 million, business declarations. revealed. Endeavour declined to comment about the discrepancy.

Burkina Faso junta leader Ibrahim Traore said in July he. would withdraw licenses from miners headquartered in nations. that did not supply military devices.

A senior main working for a mining business in West. Africa stated the authorities were implicitly informing Western. miners that they could now turn to Moscow if they needed other. mining partners.

Short-term, experts stated they expected juntas to continue. squeezing the business currently in the area.

I don't believe the miners are reassured. A number of years. down the line, they might find themselves being told, 'that is. not enough', stated Vincent Rouget, an analyst at global risk. consultancy Control Threats, which encourages miners in the region.

(source: Reuters)