Resolute Mining to Pay Mali $160 Million Over Tax Dispute
Resolute Mining Ltd. will pay the Mali government about $160 million as it seeks to resolve a tax dispute that’s seen its chief executive officer detained for more than a week.
The Australian miner has paid an initial settlement of $80 million and will disburse the balance from “existing liquidity sources” in the coming months, it said in a statement Monday.
The company’s shares slumped as much as 14% in Sydney on Monday. They’ve tumbled more than 40% since news of the detention of CEO Terry Holohan, along with two colleagues, broke around Nov. 10. Resolute is still working with the Mali government to secure the release of the employees, who remain “safe and well,” it said.
Holohan and his two colleagues have been held for more than a week after the Resolute head traveled to the country for meetings with the nation’s tax and mining authorities. The detention comes as the military rulers of Africa’s third-largest gold producer ratchet up pressure on mining companies to renegotiate contract terms.
Mali’s position is that Resolute – which operates the Syama gold mine – should pay the state 100 billion CFA francs ($161 million) to settle a dispute mainly concerning alleged back taxes following a sector-wide audit, people familiar with the matter said last week.
Resolute said Monday it had said a framework agreement with the government “regarding the long-term future of the operations in Mali, including migration of the company’s assets in Mali to the 2023 Mining Code and maintaining the safety of the company’s employees.”
The miner, which had net cash of $146 million at the end of September, said last week that the claims against it were “unsubstantiated” and it was “continuing to work with the government on a resolution.”
Mali has been under military rule since 2020, when interim leader Colonel Assimi Goita ousted the West African nation’s elected president, citing the previous regime’s failure to repel the Islamist insurgents. Since then, mercenaries from the Kremlin-backed Wagner Group have been deployed to the country, while European forces and a United Nations peacekeeping mission were forced to withdraw.
