A Precarious Partnership: Mining, Security, and Governance in Mali

Barrick Gold Corporation, a Canadian mining firm and one of the world's largest gold mining companies, has recently decided to suspend its operations in Mali after the government seized the company’s gold stocks valued at CAD 245 million from the Loulo-Gounkoto mining complex. This situation highlights a pivotal moment in the relationship between foreign investors and Mali’s military-led administration. Policy changes from the military government may require businesses, as well as bilateral and multilateral partners, to adapt to new and unpredictable conditions.

While natural resources hold significant potential for development, the journey to prosperity can be challenging. Despite Mali's abundant natural resource wealth, including gold, which constitutes over 80% of its exports, the country continues to face widespread poverty and underdevelopment. The economic benefits of these resources have not resulted in improved living conditions for the majority of Malians. Instead, political instability, issues in governance, and security threats from jihadist groups have created an environment where sustainable economic growth remains challenging to achieve.

The presence of jihadist insurgencies and other non-state armed groups in Mali presents a serious threat to foreign mining operations, making security a top priority. Companies like Barrick Gold must navigate a complex security environment, often requiring cooperation with local authorities and the Malian government, which is responsible for ensuring citizens' safety and creating a trustworthy investment climate for businesses. However, the methods employed by the military-led government, including the recent seizure of gold stocks, have raised concerns about the rule of law and adherence to existing agreements. The Malian military's actions against Barrick Gold are part of a broader pattern, highlighted by the arrests of executives from other mining companies, such as those from an Australian firm, setting a troubling precedent. A stable and predictable legal framework is essential for attracting investment and fostering a sustainable mining sector that benefits all stakeholders, particularly local communities.

The Military-led Government and Foreign Policy Shifts

The change in leadership in Mali following a coup d'état in August 2020 poses a foreign policy challenge for Canada and other countries, including bilateral and multilateral partners. Since assuming power, the new administration has made major policy changes that have impacted the operating environment for foreign businesses. Specifically, their approach to renegotiating contracts and enforcing tax regulations has led to increased tensions with mining companies.

Canada’s Long-standing Development and Humanitarian Assistance to Mali  

Canada has been a committed partner in Mali's development, focusing on peace, security, and sustainable growth. In response to the 2020 coup, Canada suspended direct budgetary support to the Malian government while continuing to provide humanitarian assistance. Navigating this complex situation requires a nuanced strategy that respects and maintains Canadian values while encouraging constructive dialogue with Malian authorities.

Although Canada has withdrawn direct budgetary support to Mali following the military coup, it remains committed to promoting democracy and good governance. Canada's active and meaningful regional engagement allows it to maintain significant influence. It can strategically leverage its relationships with key regional allies and continue advancing its interests in Mali while avoiding a complete disengagement that could undermine years of investment in the Malian civilian population. This approach not only safeguards the valuable investments made in support of the Malian civilian population but also reinforces Canada's role as a constructive partner in promoting stability and development in the country.

From a Narrative of Exploitation to Shared Prosperity

To tackle the challenges facing Africa's resource sectors, it is crucial to reframe the narrative of resource exploitation to conversations that call for a more holistic approach that emphasizes ensuring that African countries maintain significant control over their resources and derive long-term benefits from them. This demands a multi-stakeholder strategy involving governments, local communities, civil society, and private investors, all collaborating to establish transparent, fair, and accountable frameworks for resource extraction. At the heart of this approach is the effective management and utilization of resource revenues to foster local development, empower communities, and create sustainable economic opportunities.

In the meantime,

Barrick Gold should:

• Commit to a non-transactional partnership and adopt a strategic, development-focused approach, particularly in corporate social responsibility initiatives. This strategy should emphasize a long-term, sustainable commitment to Mali’s economic and social growth, ensuring that investments align with the country's broader development objectives. Strengthening partnerships with local communities and enhancing transparency will be essential for fostering mutual trust and guaranteeing that corporate activities have a positive and enduring impact.

The Canadian Government should:

• Leverage its relationships with key allies in the region and engage in back-channel diplomacy. This should include cautiously exploring avenues of influence on Mali through the African Union, recognizing Mali's skepticism towards such institutions following its announced withdrawal from ECOWAS.

• Develop a long-term strategy prioritizing support for Malian civil society, particularly national-level labor unions in the mining sector, to promote good governance and accountability.

The Malian Military-Government should:

• Engage in good-faith negotiation with Barrick Gold and prioritize establishing a stable and predictable legal framework for the mining sector in Mali.

The situation in Mali highlights the complex challenges and opportunities associated with resource wealth. With a commitment from all stakeholders, Canada can maintain its values while collaborating with the Malian authorities and Barrick Gold to protect Canadian business interests abroad and promote economic growth, security, and human development for the Malian population.