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Mali Arrests Four Canadian Mining Reps Over Tax Row
The military regime in Mali has arrested four senior employees of a Canadian mining company as it continues to detain workers to pressure companies in the West African mining sector to pay millions in additional taxes. Barrick Gold (NYSE:GOLD) has revealed that four employees of its Loulo-Gounkoto mining complex in Mali have beendetained pending trial, as a dispute over its local mining operations escalates. The giant gold miner says it will continue to engage with Mali’s government to find an amicable settlement and ensure sustainable operations in the West African country.
Previously, the Malian government claimed that Barrick had failed to honor its commitments made under an agreement for equitable distribution of mineral resources. CEO Mark Bristow has revealed that attempts to find a mutually acceptable resolution so far have been unsuccessful.
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Political instability remains a major challenge for foreign energy and mining companies operating in Africa. The oil and gas multinational divestment from the Niger Delta that kicked off over a decade has now hit fever pitch, with hordes of oil and gas majors exiting the Nigerian market. Last year, Norwegian oil and gas giant Equinor ASA (NYSE:EQNR) finalized the sale of Equinor Nigeria Energy Company (ENEC) to local firm, Chappal Energy. The sale brings to a close the company’s three-decade-long partnership with Africa’s largest oil producer, during which Equinor pumped more than a billion barrels of crude from the Agbami Field. Prior to that, Chinese company Addax sold its four oil blocks to Nigerian state oil company, NNPC.
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In the same year, U.S. oil and gas supermajor Exxon Mobil Corp. (NYSE:XOM) announced plans to sell its equity interest in Mobil Producing Nigeria Unlimited, which holds more than 90 shallow-water and onshore platforms as well as 300 producing wells, to Seplat Energy Plc. for approximately USD1.3 billion. Former President and Oil Minister Muhammadu Buhari initially approved the deal before reversing his decision.
Two decades ago, Angola championed the so-called “Angola model” wherein it received oil-backed loans from China to finance the building of roads, hydroelectric dams, railways, and the like. It didn’t last very long, though. The model worked just fine in the early years, with Angola borrowing a whopping $45 billion from China, and repaying some of it in oil. However, the Central African country struggled to attract investors to further develop its oilfields and boost infrastructure. And while initially there was a significant amount of excitement on the part of the oil majors for the country’s massive deposits, (think: BP, Exxon, Chevron), the deterrents remain, including unfriendly tax regimes, corruption and, in some cases, lack of security for assets.
By Alex Kimani for Oilprice.com
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