In 2024, Mali's government detained the chief executive of Resolute Mining and two of his staff. They got out just over a week later. The price was $160 million, paid by the company to settle tax and customs claims. Resolute says it isn't leaving. It has been in Mali for two decades, its current chief, Christopher Eger, told the Journal, and it's committed to the country.
That's the shape of the new gold rush, Alexandra Wexler reports in Tuesday's Journal. Gold is still high by history, closing at $4,139.00 an ounce Monday, Oct. 19. So miners have poured billions into West Africa. At least 17 new mines have started there since 2020, costing more than $4 billion, by S&P Global Energy's count. The region now digs about 15% of the world's gold, up from 10% ten years ago. “In Africa, there's still a lot of gold to be found,” Eger said. Drill rigs are getting hard to find. His company has 10 of them at one exploration site in Côte d'Ivoire. It also approved $516 million this year for a new mine in that country, due to start producing in 2028.
The governments want a bigger cut
The catch is who keeps the gold. Burkina Faso moved five mines to its state-owned miner this year. Ghana handed one of its largest mines to a local firm after refusing to renew a South African company's lease of more than two decades. Ghana also ruled that all surface mining must be done by 100% Ghanaian firms by the end of this year, and underground mines must be at least half locally owned. Its flat 5% royalty is gone. A sliding scale now climbs to 12% when prices rise. Guinea canceled 129 exploration permits last year. Barrick Mining paid $420 million last year to get its Mali mine back after two years of disputes. On top of all that, an armed insurgency has led to almost 10,000 deaths in Burkina Faso, Mali and Niger over the past year. That's the count of a Pentagon-funded research center.
The miners stay anyway. Executives point to rich deposits, skilled workers and faster permits than back home. Fortuna Mining plans to start building a $400 million mine in Senegal. At today's prices, the Journal says, it could pay back its cost within months. That's the trade. Big deposits, quick payback, and a government that can change the rules after the money is spent.
Our read
This is an Investments/Risk · IN04 story about the difference between gold and gold miners. We hold gold as insurance. The iShares Gold Trust (IAU) is in 46 of our model books, held at weight; nothing added. Gold is down 4.31% this year by the paper's own table. It touched $5,318.40 within the past year before falling back. Our miners are a smaller slice. Newmont (NEM) is in 15 books, Agnico Eagle (AEM) in 4, and the miners' fund (GDX) in 12, all at weight, nothing added. A bar of gold in a vault doesn't get a new royalty rate, a canceled permit or a detained CEO. A mining stock can face all three. That's why the metal is the core and the miners are the satellite.
Here's the check for your own plan. If you own gold, open the fund this week and read what it actually holds. A bullion fund like IAU holds metal. A gold fund with miners inside holds companies, and some of them dig in places like Mali and Ghana. The two don't act alike when a government rewrites the rules. Know which one you have, and whether it's sized as insurance or as a bet. If you're not sure, bring the holdings list to your next review and we'll sort it out together.