How to make cash in Africa’s coup belt

THE BOSS of Barrick Gold, a Canadian mega-miner and the world’s second-largest gold producer, is no stranger to bust-ups with African governments.

Earlier this month, in Cape Town, Mark Bristow recalled past wrangles with leaders in Tanzania and Congo like a retiring boxer reminiscing over old bouts. He shrugged off an arrest warrant, issued by the government of Mali in December and accusing him of money-laundering and violating financial regulations (allegations he denies), as the cost of doing business in exceptionally tough places. “Mining is a long-term game,” says Mr Bristow. “The best way to resolve misunderstandings or disagreements is through dialogue.”

His optimism seems to have paid off. On February 19th Reuters reported that Barrick and Mali had agreed to end a dispute that had lasted almost two years and led to the suspension of mining operations accounting for between 5% and 10% of Mali’s GDP. The Malian government had demanded $500m in back taxes—a sum the finance ministry recently bumped up to a gigantic $5.5bn.

According to the new agreement, Barrick will pay $438m. In return, the government is to release four senior local employees in prison on charges of money-laundering and financing terrorism (charges that Barrick has maintained are “unfounded”). It will also return hundreds of millions of dollars’ worth of gold ore, which the state began seizing last year.

The saga, however amicable its conclusion, illustrates the growing challenges facing Western miners in the region. African governments, from Ivory Coast to Zambia, are revising mining codes in pursuit of higher rents and bigger ownership stakes. They have been prompted by surging global demand for minerals ranging from gold—the price of which is at an all-time high—to copper and lithium, which are critical for the green transition.

The trend towards resource nationalism is most advanced in Mali, Burkina Faso and Niger, the heart of Africa’s “coup belt” and a zone increasingly aligned with Russia and hostile to the West. These Sahelian states are among the continent’s richest in minerals, especially gold and uranium. But because of the capricious and heavy-handed approach military governments have taken to squeezing foreign investors, the Sahel is also where the nationalist turn is most likely to backfire.

Mali’s junta, which took power in 2020, is the pioneer. A state-commissioned audit of the mining sector, which Mr Bristow brushes off as “incorrect”, claimed the government was missing out on revenues of nearly $1bn. The revised mining code, introduced in 2023, removed tax and customs exemptions and increased the share of a project the state can own from 10% to 30%. Controversially, the junta insisted on applying it retroactively to current operations, rather than just future ones. To enforce compliance, it has “incrementally increased demands and procedural pressure”, notes Beverly Ochieng of Control Risks, a consultancy. Even before the deal with Barrick, Mali had received or been promised over $635m in additional tax payments, according to Reuters.

Mali’s neighbours have taken note. Last year Niger’s government cancelled the mining licence held by Orano, a state-owned French nuclear-fuel company. In the face of legal proceedings it has blocked uranium exports and promised to return the mines “to the public domain of the state”. The government of Burkina Faso has nationalised two mines and seized gold extracted by a Canadian firm. Sarama Resources, an Australia-based gold miner, has embarked on an arbitration battle in protest against the withdrawal of one of its exploration permits.

Some fret that the juntas are motivated mainly by hostility to the West. In the past few years the trio have all expelled Western—primarily French—troops, and instead hired Russian mercenaries to help them fight jihadists. Niger’s showdown with Orano, in particular, is clearly driven by geopolitics. Russia, China and Turkey stand to benefit from the new orientation in Mali and Burkina Faso. “We see partners being preferred on the basis of nationality,” complains a Western diplomat in Bamoko, Mali’s capital. In December Ganfeng Lithium, China’s largest lithium producer, opened a giant mine in Mali.

But there are limits to the geopolitical shift. Of the three countries, only Burkina Faso has a Russian-owned industrial mine. “I don’t think they actually want to break the relationship with Western multinationals,” says Ulf Laessing of Germany’s Konrad Adenauer Foundation in Bamako.

Money seems to be more important than ideology. The economies of all three states are in the doldrums. Four mines in Burkina Faso have closed since the army took power in 2022. Mali’s junta is reportedly struggling to pay for the services of Wagner Group, a Russian mercenary outfit it hired in 2021. The quest for more revenue is not limited to Western miners. This month the government began taxing phone calls and mobile-money transactions. Last year it made Maroc Telecom pay a fee of $272m to renew its licence.

Local businesspeople in Bamako complain about increasingly onerous tax demands. “Everything has gone up,” grumbles Yusuf Diarra, a water-tank salesman. The shakedown of foreign companies, by contrast, appears broadly popular. Even Malians critical of the junta agree that previous mining codes were too generous to miners. “Changing the 2019 code took guts, and had to be done,” says Modibo Mao Makalou, a prominent economist.

But the government’s approach seems likely to jeopardise Mali’s economy in the long run. Annual gold production fell by nearly a quarter in 2024, according to the country’s mines ministry. Even if big miners like Barrick—one of the country’s largest private employers—stay put in Mali, they may think twice before committing more capital. “Mining is by far the foundation of that economy, and you can destroy it in a heartbeat,” Mr Bristow warns.

For now few Western mining firms are rushing to leave the Sahel. Mr Bristow suggests Barrick would refuse any demands which might threaten the economic viability of its projects in Mali. But he also says he is “very happy to search for ways for the state to get more of the [tax] take”. Governments and mining companies still have powerful incentives to get along.

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