Herbert Smith Freehills partner and Africa co-chairperson Peter Leon
Photo by: Creamer Media's Donna Slater
Law firm Herbert Smith Freehills partner and Africa co-chairperson Peter Leon tells Mining Weekly that the August 19 coup in Mali, in which now-former President Ibrahim Boubacar Keita was allegedly arrested and forced to resign on State television by the country’s military, is very worrying, even if the opposition protests that started on June 5 (known as the June 5 Movement) appear to have supported it.
Of his alleged forced resignation, Keita said, “today, certain parts of the military have decided that intervention was necessary. Do I really have a choice? Because I do not wish blood to be shed.”
As one of the biggest gold producers in Africa’s, Mali faces growing unrest with sparse updates coming from the country, making it difficult to get a sense of where leadership is heading. This places strain on what was recently a seemingly favourable operating environment for miners.
The US has also condemned Mali’s military-led seizure of power, with US Secretary of State Mike Pompeo saying the US condemns any forcible seizure of power. “We join the Economic Community of West African States and African Union, as well as other international partners, in denouncing these actions.”
He adds that the freedom and safety of detained government officials and their families must be ensured.
Leon says the political unrest could make the overall security situation with Jihadists in the north even worse.
“The test will obviously be whether the military hands over power and allows free and fair elections as promised − given that this took 16 months after the last coup in 2012.”
Ironically, it was the 2012 coup that resulted in Keita being brought to power.
Miners in the region have reported no impacts to operations yet, but are monitoring the situation.
NYSE- and TSX-listed Barrick Gold is the latest miner to report that its operations remain unaffected. It reports that activities at its Loulo-Gounkoto mining complex are continuing as normal.
"The complex has an adequate inventory for its foreseeable requirements and management has taken steps to secure its supply lines. The company is monitoring the situations closely in consultation with local stakeholders," it has assured shareholders.
Resolute Mining, Hummingbird Resources, AngloGold Ashanti and Cora Gold have also reported that their operations remain unaffected.
However, Leon notes that the ongoing unrest is “clearly unwelcome news” for gold mining companies operating in the region – evidenced by a sharp market reaction.
Listed mining companies with a presence in Mali have experienced a slump in share price in line with news of the coup.
Further, Leon says the unrest will inevitably create greater geopolitical risk in the region where the Presidents of Guinea Alpha Conde and Côte d'ivoire Alassane Outtara are both making “unpopular third-term bids”.
“The US calls on all political and military actors to work towards a restoration of constitutional government. We urge all stakeholders in Mali to engage in peaceful dialogue, to respect Malians’ rights to freedom of expression and peaceful assembly, and to reject violence,” says Pompeo.