By Leon Louw founder and editor of WhyAfrica
29 April 2021 – Despite the fragile political situation in Mali, Barrick Gold Corporation’s Loulo-Gounkoto complex continues delivering the ounces at a consistent rate. WhyAfrica’s Hawks Eye is on Barrick Gold’s Loulo-Gounkoto complex in Mali.
Barrick Gold and its legacy company Randgold Resources invested heavily in Mali. At its peak, Randgold’s Morila mine was one of the worlds most prolific gold producers. Barrick recently sold the operations to Australian listed Firefinch (previously Mali Lithium).
According to Barrick’s President and CEO Mark Bristow, Barrick and Randgold has, over the past 24 years, contributed close to USD7.7-billion to the Malian economy, of which close to USD3-billion went to the state in the form of dividends, taxes, and royalties. The political situation in Mali remains brittle almost a year after the then president, Ibrahim Boubacar Keïta was forced to resign in August 2020 after soldiers arrested him at gunpoint in a coup d’état. This move plunged the West African country, plagued for years by extremist violence, into a new phase of uncertainty. At the time, Bristow insisted that its Loulo-Gounkoto gold mine, situated in western Mali, bordering Senegal and adjacent to the Falémé River, was unaffected by the political turmoil. Despite the political tension Loulo-Gounkoto continued churning out the gold and the complex produced 193,014 ounces of gold in quarter one of 2021 and is on track to achieve its full-year guidance of 640,000 to 700,000 ounces.
Meanwhile, Mali’s transitional institutions are governing the country until elections are held in March 2022 to restore a democratically elected government. On 10 February, the interim parliament known as the National Transitional Council began its first session. However, the country remains fragile in the run-up to the elections. Although Barrick operates in a fragile political state, the company is well informed and aware of the risks associated with managing a large investment like Loulo-Gounkoto. The mine remains a pillar of the Malian economy as well as a driver of local economic development, despite the political battles of a country marred by uncertainty.
The Loulo-Gounkoto complex comprises two distinct mining permits, Loulo and Gounkoto. Société des Mines de Loulo SA (Loulo) owns the Loulo gold mine, and Société des Mines de Gounkoto (Gounkoto) owns the Gounkoto gold mine. Both Loulo and Gounkoto are owned by Barrick (80%), and the State of Mali (20%).
Last week Bristow announced that Loulo-Gounkoto third underground mine has reached its first mining level and is scheduled to start delivering ore tonnes to the plant during the current quarter. Bristow said during a press briefing that a prefeasibility study has started on two more mines on the Loulo permit: an underground operation at Loulo 3 and a large open pit at Yalea South. These, Bristow said, would add mining sources and improve feed flexibility, providing further support for the complex’s robust 10-year plan. “In addition, exploration programs designed to replace depleted reserves are continuing to deliver good results,” said Bristow.
Given its strong performance and the relatively high gold price, the joint venture board paid a combined dividend for the Loulo-Gounkoto complex of USD80-million in the quarter.
Bristow said the complex was continuing to invest in the development of the local community. One of its latest initiatives is the Accelerator program, which trains smaller suppliers and service providers in all aspects of business to enable them to grow and diversify. In addition, they are mentored by some of Loulo-Gounkoto’s larger, long-established suppliers and contractors. Since the program was introduced eight months ago, 63% of the participants have diversified their revenue streams and 80% now have five-year growth plans and long-term goals. “Our long partnership with the country and its people is a testament to how mutually beneficial a relationship of this kind can be,” Bristow said.
Leon Louw is the founder and editor of WhyAfrica. He specialises in natural resources and African affairs. WhyAfrica provides you with business intelligence that matters. Africa is our business, and we want it to be yours too. To subscribe to WhyAfrica’s free newsletter or digital magazine, and for more news on Africa, visit the website at www.whyafrica.co.za or send a direct message.