🔸 Just a reminder:

The conflict arose because of Mali's intention to increase government revenues from gold mining by introducing a new Mining code in 2023 with increased taxes and a greater government share in mining projects. The government began to review old contracts across the entire sector - and the entire sector was not against it, except for one Barrick.

➡️ The background

The crisis began at British Lonmin's Marikana mine, where miners where some of employees demanded a base salary increase from about $400 to $1,200. An important factor was the competition between two South African mining trade unions - the NUM trade union, which traditionally comprised the majority of Lonmin's workers, refused to support the goal, considering it unattainable. However, NUM was suspected of having ties to the state at that time, so the workers listened to their competitors from the AMCU trade union, who promised the miners a higher salary, aiming to score points for themselves.

🔸Equatorial Guinea does not impose an outright ban on exporting unprocessed oil or gas.

🔸Crude oil is exported without domestic refining, as the country historically lacked large refining capacity.

🔸Natural gas is exported mainly after processing into LNG or methanol, but this is done by necessity of transport, not due to a legal ban on raw gas exports.

🔸The state typically partners with private companies via Production Sharing Contracts (PSCs), under which the government claims a share of production depending on production volumes

🔸Equatorial Guinea’s laws provide for domestic supply obligations, although the local market is very small. The Hydrocarbons Law ensures the state can take oil or gas in kind to satisfy national consumption before exports.

🔸For crude oil, historically the domestic requirement was minimal (since there was no refinery).

🔸Under the Hydrocarbons Law and model contracts, the state, typically through GEPetrol (the national oil and gas company), is entitled to a free 20% equity stake

🔸Other local shareholders must hold equity interests in the relevant companies of at least 15% of their share capital

🔸There is no fixed percentage of contracts that must go to local companies, but the policy mandates a strong preference and requires additional justification if foreign contractors are engaged instead of locals.

🔸Expatriate-to-national workforce ratio indicates a maximum of 30% expatriates vs. 70% nationals in the workforce

🔸Companies must pay the state a royalty at a minimum rate of 13% of gross production for oil

🔸Bidders for new blocks are encouraged to propose higher or sliding royalties – the rate can escalate with higher daily output

🔸For gas, royalties also apply (often lower than oil’s rate, depending on contracts), but all such details are contract-specific.

🔸Extractive companies are legally obliged to fund local development, spending on social welfare projects each year as per their contract

🔸The government actively promotes domestic processing of its resources by investing alongside companies in downstream projects mainly through the state-owned SONAGAS and GEPetrol, offering tax incentives for value addition, and instituting policies (even regional bans) to encourage local beneficiation

🔸The government promotes a Gas Mega Hub initiative on EG's Bioko Island and the creation of local oil refinery

🔸Equatorial Guinea’s government maintains firm control over all its territory

🔸In the hydrocarbon sector, there have been no known instances of illegal oil production – all oil operations are offshore and tightly guarded by the state and international operators. Illegal bunkering or theft is not reported as a major issue.

“A very small minority refuse to move. Only 4 participants … were unwilling to support progress that the overwhelming majority, including all African participants, clearly endorsed.

The countries most historically tied to the trade, profit and legacy of what the world came to know as blood diamonds — countries that built reputations and fortunes while Africa paid the bill in blood and soil — are today the very ones slowing Africa’s attempt to turn that history into something better.”

Let’s break down who owes what to whom in the end:

🔸 Barrick will not pay $430 million, as reported in the media, but only about $254 million within six days of signing the settlement. This is not an “entry fee” but unpaid tax revenues, which partly triggered the original dispute. Media reports also mention around 88 million dollars in a “VAT credit offset,” which, in fact, represents tax credits that Bamako owed to Barrick. That debt will simply be forgiven, and no money will be paid to Mali.

🔸 Mali drops all criminal charges against Barrick, its subsidiaries, and its employees.

🔸 Full control over Mali’s largest gold deposit, Loulo–Gounkoto, returns to Barrick, and the state lifts the export restrictions on gold from the site.

🔸 Barrick withdraws its arbitration case at the World Bank’s ICSID tribunal and formally accepts Mali’s 2023 mining code.

🔸 Mali extends the mining license for Loulo for ten years after its scheduled expiry in February 2026.

🔸 Ownership of the complex remains 80% Barrick and 20% the Malian state.

🔸 Barrick accepts the terms of the new 2023 Mining Code, including higher taxes and royalty.