Aussie gold miner faces $250m demand from Mali as CEO detained

Mali is demanding Australian gold producer Resolute Mining pay about $US160 million ($250 million) to resolve a tax dispute after the government detained its chief executive, according to people familiar with the matter.

CEO Terry Holohan and two colleagues have been held in the capital, Bamako, since late last week after the Resolute boss travelled to the city 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 economic terms.

The government’s position is that Resolute – which operates the Syama gold mine – should pay the state 100 billion CFA francs ($249.9 million) to settle a dispute mainly concerning alleged back taxes following a sector-wide audit, the people said, asking not to be named as the matters were private.

The parties have been discussing a potential agreement that would see the company pay half that sum now and half at a later date, one of the people said.

Resolute declined to comment on Wednesday. The claims against the firm were “unsubstantiated,” the Perth-based miner said in a statement on November 11. “The company is continuing to work with the government on a resolution.”

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Mali’s mines and finance ministries didn’t respond to requests for comment.

Government negotiations

Resolute previously negotiated a so-called convention for its Syama asset that runs until 2029, but the nation’s junta have upped pressure on firms with operating gold projects in the country after passing legislation last year that increases the state’s share of economic benefits from mining projects. Their toughening stance also coincides with a 25 per cent jump in the price of bullion this year.