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Shares of Australian gold miner Resolute Mining plunged more than 30 per cent on Monday after the company said its chief executive Terence Holohan and two other employees had been detained in Mali.
The Resolute executives were in the capital Bamako to discuss with officials “open claims made against Resolute” that the group “maintains are unsubstantiated”, Resolute said on Monday.
In its 2022 financial report, the miner said it was contesting demands from Mali tax authorities for additional payments worth more than $100mn on taxes between 2015 and 2021.
The company operates the Syama mine in Mali through a subsidiary of which it owns 80 per cent. The government holds the remaining 20 per cent.
The news comes as the Malian government is increasing pressure on mining companies to renegotiate their contracts. Barrick Gold, AngloGold Ashanti and Endeavour Mining all operate gold mines in Mali.
In September, Barrick Gold and the Mali government settled a dispute after the country’s military government said the company owed it more than $500mn in outstanding taxes and royalties and detained four company employees. In early October, Barrick Gold paid the government $85mn “in the context of the ongoing negotiations”.
Richard Hatch, mining analyst at Berenberg, said the detention of the Resolute executives would “add to more cautious investor sentiment about Mali”.
Listed gold miners have recorded strong gains this year as the precious metal hits all-time high valuations. Shares of Resolute Mining were up more than 90 per cent for the year prior to Monday’s plunge.
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