Resolute Mining Ltd., a prominent gold mining company, has found itself at the center of regulatory upheaval in West Africa following the detention of its CEO in Mali. Governments across the region, facing financial strain, are increasingly seeking to capture more revenue from their mineral resources, reshaping the landscape for foreign mining firms.
Mali’s military junta, affected by sanctions and cut off from Western aid, is leading this charge. The government has recently intensified pressure on foreign miners, including Resolute and Barrick Gold Corp., a Canadian mining giant. In recent months, Barrick has seen its employees detained and faced threats to key licenses. Neighboring nations like Niger, Burkina Faso, Senegal, and Ivory Coast are also implementing stricter mining policies, revoking permits, and launching sector-wide audits.
Chris Eger, Resolute’s Chief Financial Officer, recently highlighted this trend during an earnings call, stating, “We’re seeing it across Africa, especially in West Africa… As we’re generating more cash due to the gold price, unfortunately, governments are seeking a larger share.” This shift coincides with gold’s significant price increase, which has surged by 30% this year, reaching a peak of $2,790.10 per ounce amid rising geopolitical tensions.
The detention of Resolute’s CEO, Terry Holohan, follows Mali’s sweeping industry audit and the recent implementation of legislation that expands the state’s stake in mining projects. While companies like Resolute and Barrick had previously negotiated agreements with earlier governments, Mali’s junta has been revisiting these deals, tightening its mining laws to assert greater control over foreign operations.
This regulatory wave extends beyond Mali. Niger’s military government recently blocked France’s Orano SA from exporting uranium ore, fueling a rapid increase in uranium prices. Burkina Faso revised its mining code last year to increase royalties, Ivory Coast is revamping its tax structure for mining, and Senegal’s new government is conducting an audit of the sector dating back to 2017.
The market impact has been significant. Resolute’s shares dropped by a third on Monday, while other companies with Malian operations also felt the pressure. Kodal Minerals Plc, currently developing a lithium project in Mali, saw its shares fall by as much as 13%. These developments indicate a growing trend in West Africa, where governments are taking assertive steps to maximize their returns from mineral resources, reshaping the operating environment for foreign mining firms in the region.
