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Australian firm Resolute Mining agreed to pay Mali’s military government $160 million to settle a tax dispute. It follows the detention of its CEO Terrence Holohan and two other executives.
The company on Monday said it paid $80 million from its cash reserves and would pay a further $80 million in the coming months. It said it was working with the ruling junta to secure the release of the executives, who had been held for more than a week.
The government last year led a review of Mali’s mining code aimed at securing a greater share of revenues generated by mining companies in the gold-rich nation. Companies have feared long-term mining agreements could be terminated.
The payment is part of a broader agreement that includes committing to “detailed discussions” about transitioning to the mining code, Resolute said in a statement.
But the junta’s success in extracting a much-needed cash injection from Resolute could prove to be a Pyrrhic victory, say analysts who argue the move could deter future investors.
