Gold sector in turmoil: Mali puts pressure on Resolute Mining

Shares of the Australian gold producer Resolute Mining experienced a drastic decline of over 30 percent after the company announced that CEO Terence Holohan and two other employees were detained in Mali. The executives of Resolute were in the Malian capital, Bamako, to negotiate with officials over "outstanding claims" that the company considers to be unfounded. In the 2022 financial report, Resolute stated that it was in a dispute with the Malian tax authorities over additional payments exceeding 100 million dollars for the period from 2015 to 2021. The company operates the Syama mine in Mali through a subsidiary in which it holds an 80 percent stake, while the state owns the remaining 20 percent. The news comes as the Malian government is increasingly exerting pressure on mining companies to force contract renegotiations. Other major gold producers such as Barrick Gold, AngloGold Ashanti, and Endeavour Mining also operate in Mali. In September, Barrick Gold managed to resolve a dispute after the Malian military government confronted the company with tax and duty claims exceeding 500 million dollars, which even led to the detention of four employees. In early October, Barrick Gold paid the government 85 million dollars as part of the ongoing negotiations. Mining analyst Richard Hatch of Berenberg emphasized that the arrest of Resolute Mining's managers is likely to further reinforce investors' cautious stance towards Mali. Despite a significant rise in gold producers' stock prices this year, driven by the record value of the precious metal, Resolute Mining's shares suffered a severe setback following this incident.