Resolute Mining: will get payment of A$77m

Resolute Mining (ASX: RSG), an Australian gold mining company, has announced it will pay $160 million to Mali’s military government to resolve a tax dispute. The payment follows the unexpected detention of the company’s British CEO, Terence Holohan, and two other employees in the West African country earlier this month. The initial payment of $80 million will be made immediately from existing cash reserves, with the remaining $80 million to be paid over the coming months.

The dispute began when Holohan and his colleagues were arrested while traveling to Bamako for what was expected to be routine negotiations with Malian authorities. The company has stated that the detained employees remain "safe and well" and are receiving support from the UK and international embassies. Resolute Mining emphasized that operations in Mali continue without disruption and that the payment is part of an ongoing effort to resolve the situation.

Mali is one of Africa’s top gold producers, and the company’s Syama mine in the country contributed nearly two-thirds of Resolute’s annual sales in 2023. Resolute holds an 80% stake in the project, with the remaining 20% owned by the Malian government. The company’s shares have been under pressure, falling as much as 14.3% in early trading following the announcement.

The payment to Mali’s government reflects a broader trend of increased scrutiny and financial demands from the country’s authorities toward mining companies. Similar incidents have occurred at other firms, including Canada’s Barrick Gold, highlighting the growing challenges for foreign investors in the region.

Resolute Mining’s decision to settle the dispute underscores the company’s commitment to maintaining operations in Mali while navigating the complex regulatory and political environment. The company will continue to work with Malian authorities to secure the release of its detained employees.