Randgold seeks arbitration in Mali tax dispute
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Bamako - Africa-focused gold miner Randgold Resources is seeking international arbitration in a dispute over 23 billion CFA francs ($46.5 million) in taxes which Mali says the company owes the West African state, a company executive told Reuters.
Mahamadou Samaké, group regional manager for West Africa, said Randgold was contesting the bill as the taxes did not form part of the original mining agreement signed by the company.
“The government is asking us for a tax adjustment of 23 billion CFA francs, which we dispute,” he told Reuters.
The state had already reduced its claim from 43 billion CFA francs in the case, which concerns tax payments for 2008 to 2010 on the salaries of foreign employees, he said.
The company has taken the case to the International Center for Settlement of Investment Disputes (ICSID). There is no deadline for a decision, he said.
“The state should not see this as a hostile act,” Samake said.
He said the firm's mining convention stipulated that the company would only be liable to taxes included in that agreement.
“The problem is that there are taxes which have been created since the signing of the agreement... For us, based on our convention, we are not liable for what is being asked of us,” he said.
Mining Minister Amadou Baba Sy said Randgold had sought international arbitration after talks at a ministerial level had failed.
“Mali has lawyers which are going to defend its interests and Randgold also has its advisers... At the end of this international arbitration, we will have a verdict.”
Randgold announced a 62 percent fall in second-quarter profit last week to $54 million and pledged to cut costs, including at its Loulo-Gounkoto mine in Mali.
Samake said the company was seeking to reduce the cost of inputs such as energy but had sought to avoid laying off staff.
Precious metals mining companies are under intense pressure to cut costs after a 20-percent slump in gold this year sent prices to a near 3-year low. - Reuters