B2Gold – a Canadian gold mining company – has initiated arbitral proceedings against the Republic of Mali through its Malian subsidiary, Menankoto SARL. The arbitration will be administered by the International Centre for Settlement of Investment Disputes in Paris, France, pursuant to the arbitration clause set out in Section 31 of the Mali-Menankoto Mining Convention (or Establishment Agreement).
The proceedings concern the status of Menankoto’s exploration permit in the Anaconda area located near the Fekola mine license area. B2Gold claims that Mali breached its obligations under the Mali-Menankoto Mining Convention governed by the Malian 2012 Mining Code (see in particular Article 15*).
More specifically, Menankoto alleges it was denied a one-year extension of its exploration permit in March 2021 on the basis of the new 2019 Mining Code. At the same time, however, the government granted a new exploration permit to Little Mining – a domestic mining company – covering the perimeter of the Menankoto permit.
It should be recalled that, before his resignation, former Prime Minister Moctar Ouane issued a decree withdrawing Little Mining’s permit without reassigning a new one. This could explain B2Gold’s determination to take back the property that belonged to it for seven years and on which it claims to have invested about $27 million, says local news.
However, on 18 June 2021, the Ministry of Mines, Energy and Water rejected the Menankoto subsidiary’s application on the grounds that it had been the subject of a court decision against it.
Menankoto has indeed instituted two matters before the Malian Supreme Court. Yet, according to its parent company’s official statement, both proceedings remain non-substantial to the issuance of the permit.
B2Gold essentially alleges that operations at the Fekola mine are continuing normally as they were authorized under a different permit. B2Gold believes that its Malian subsidiary – Menankoto SARL – is entitled to have its permit renewed under applicable law. B2Gold is presently engaged in talks with the Malian government to resolve the matter, whilst simultaneously seeking legal remedies under the Establishment Agreement.
It seems B2Gold is determined to also pursue all available legal avenues, and may submit a further claim under the Agreement Between Canada and Mali for the Promotion and Protection of Investments (in particular, Section C - Settlement of Disputes between an Investor and the Host Party).
According to a statement issued by B2Gold, the Company has invested about $27 million exploring the Menankoto deposit over the last seven years, whilst its total investment in Mali to date exceeds US$1 billion – alongside 2,200 employees, of which more than 93% are Malian nationals.
* [Unofficial translation]: Chapter 4 - Establishment Agreement
Article15 - Except for exploration authorisations and mechanical artisanal exploitation authorisations, mining permits are accompanied by an Establishment Agreement setting out the rights and obligations of the State and of the holder of the mining permit.
The Establishment Agreement model is approved by decree of the Head of Government and annexed to the present Mining Code.