Resolute extraction (ASX:RSG) confirmed in an announcement this morning that CEO Terence Holohan and two other executives were arrested in Mali after discussions with government officials. Executives traveled to Bamako, the capital, to address questions about the company’s business practices and respond to allegations made by authorities, which Resolute says are unfounded. The detentions, which occurred on Friday 8 November 2024, highlight the growing challenges for foreign mining companies operating in the region.
The detentions follow a similar incident involving Barrick Gold Corp, a Canadian mining company, whose four senior Malian employees were arrested in September 2024 on financial crime charges. This occurred during lengthy negotiations regarding Barrick’s Loulo and Gounkoto mines. Malian authorities accused Barrick of failing to meet commitments relating to environmental standards, corporate social responsibility and foreign exchange regulations. Barrick, in response, denied these allegations and highlighted its cooperative efforts, including an $85 million payment made in early October.
These detentions are part of a broader initiative by Mali’s military-led government to renegotiate mining contracts in a bid to increase state revenue. Mali’s junta took power on August 18, 2020, following a coup that ousted then-president Ibrahim Boubacar Keïta. This was the country’s second coup in less than 10 years, following the 2012 coup.
The government’s new mining code, adopted in 2023, allows for an increase in state participation in mining projects to 35%, up from the previous 20%.
Industry experts suggest that Resolute has resisted pressure to renegotiate terms relating to its Syama gold mine, which operates under agreements set to last until 2029. The company reiterated that it has adhered to all official processes and provided detailed responses to the allegations against her. “Resolute’s priority remains the safety and well-being of its employees,” the company said, adding that the detained executives are being held at the Bamako Economic and Financial Center and receiving support from the UK and international consular services.
Prime Minister Roger Cook of Western Australia commented that Mr Holohan, a British citizen, was being treated well. “This highlights the risks of operating in certain jurisdictions,” Cook noted. “We hope for a quick and safe return.”
Resolute Mining shares fell sharply on Monday after the arrests were confirmed. They closed 32.84% lower at 45 cents, marking their steepest daily decline since 2008.
Resolute Mining holds an 80% stake in the Syama gold mine – a vital part of its operations – and is committed to continuing dialogue with the authorities to reach a solution.