The political situation in Mali, the fourth largest producer in Africa, threatens the extraction of precious metal in the country and causes falls in the mining sector
The mining sector has encountered an unexpected obstacle to the rally that it is experiencing this year, motivated by the strong revaluation that gold has experienced in 2020.
Specifically, it is the coup in Mali, the fourth largest producer of this precious metal in Africa, which threatens extraction in the country and is punishing mining companies with exposure to the region (some of the most important in the world) .
Barrick Gold, among those affected
Barrick Gold, for example, left 3 percent on the stock market on Thursday, fearing that the mining complex it owns in Loulo-Gounkoto (Mali) will be affected by political uncertainty after the resignation of the country’s president.
In this way, Barrick Gold put a stop to a rally that has taken it to record highs after revaluing more than 55 percent so far this year (due to the revaluation of the precious metal, used as a safe-haven asset in the face of the increase in the uncertainty due to the coronavirus crisis).
For its part, Canadian miner B2Gold, which operates the Malian Fekola mine, dropped 7 percent on Wednesday, joining an additional 7 percent on Tuesday, also slowing another rally that has also taken it to record highs. after appreciating 57 percent in 2020.
But in addition to these two, there are other examples: Hummingbird Resources, whose only operating mine is in the country, lost 10 percent on Wednesday, joining the 5 percent that had already fallen on Tuesday, a significant setback that left the annual increases at 47 percent.
Likewise, Australian company Resolute Mining sold 17 percent of its market value on Wednesday, due to the mine it owns in Syama, in southeastern Mali.
All this occurs despite the statements of companies like Barrick Gold that have ensured that they continue to operate relatively normally in the country.
“The (Loulo-Gounkoto) complex has an adequate inventory to be able to fulfill the expected orders and the management team has taken the appropriate measures to secure the supply lines. The company monitors the situation closely, in communication with the local partners, “Barrick said in a statement.
A complicated political situation
However, the situation in Mali is complicated. President Ibrahim Boubacar Keita (in office since 2013) resigned on Wednesday, hours after being arrested by the Army military.
Keita argued that, with his decision, he wanted to avoid bloodshed in the face of a coup that follows weeks of protests over controversial elections, the rampant corruption and Islamist violence that continues to plague parts of the country.
The Army has assured that its plans are to establish a transitional government until the holding of new elections.