Resolute pays US$50M to Mali junta amid tax spat

Resolute Mining (ASX: RSG; LSE: RSG) has made the second settlement payment of about US$50 million to the Malian government to help resolve a tax dispute, the company said Friday.

The Australian miner expects to pay a further US$30 million by the end of the year from liquidity sources. Resolute last week paid US$80 million before the military government released three company executives, including CEO Terence Holohan, who had been detained since Nov. 8 concerning payments for Resolute’s Syama gold mine.

The company agreed to pay a total of around US$160 million under a memorandum of understanding, or protocol, signed with authorities on Nov. 18. It lays out a framework on the long-term future of its operations in the west African country.

Barrick staff detained

The latest payment comes amid ongoing tensions between foreign miners and the junta, in power since a 2020 military coup. It’s working to impose a new mining code passed last year with higher state compensation. Four employees from Barrick Gold’s (TSX: ABX; NYSE: GOLD) Loulo-Gounkoto mine were arrested and detained on Tuesday, while a trial is pending.

Barrick has refuted the charges and said it would keep engaging with the government to reach a settlement. Four other Barrick employees were  detained in October in a dispute over US$500 million in taxes for the Loulo-Gounkoto mine, and then released after Barrick paid an initial US$85 million. The company said it expects to complete negotiations by year’s end.

Resolute shares gained 4.8% to A44¢ apiece on Friday in Sydney, valuing the company at A$882.8 million ($805.2 million).

Resolute’s ongoing discussions with the government focus on the migration of company assets in Mali to the new mining code It allows the state to increase ownership of projects to 35% from 20%.

Operations at the Syama mine continue and haven’t been affected, Resolute said. The company holds an 80% stake in the mine, with the government at 20% for now, at least.