If you thought the detention and subsequent release of Resolute Mining’s chief executive by the government of Mali last month was a one-off, you would have been wrong.
And as Resolute later paid the second, $50 million tranche (the first was $80 million) of a $160 million settlement to the west African country’s military junta, Canadian mining giant Barrick Gold announced that four of its employees in the country had also been detained. Mali claimed Barrick owed $500 million in back taxes while the company said it had already made an $85 million payment of an undisclosed sum. (Mali had demanded $380 million from Resolute in new tax assessments.)
However deplorable Mali’s actions may seem, companies should expect this kind of pressure in other parts of the African continent over the next few years as the philosophy that underpins what happened in Mali spreads. After decades of largely being sidelined while profits from their mineral resources accrued to foreign firms and kleptocratic local leaders, Africa’s new leaders, both democratic and autocratic, want a greater slice of the pie. Some want to achieve this at the negotiating table while others employ much rougher methods.
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