Mali's military government is demanding a $162 million tax settlement from Australia's Resolute Mining (OTC:RMGGY) following the detention of its CEO, Terry Holohan, during a visit to the country.

Holohan was detained in Bamako, Mali's capital, along with two colleagues after attending meetings with tax and mining authorities.

This action has escalated tensions between the country's military junta and foreign mining companies, a crucial source of tax revenue.

After shares fell more than 40%, the Australian Securities Exchange halted trading, pending further news from the company, per Bloomberg.

Mali, Africa's third-largest gold producer, significantly contributes to the global gold supply, attracting several prominent international mining companies. Alongside Resolute, which operates the Syama mine, other notable miners active in Mali include Barrick Gold (NYSE:GOLD), operator of the Loulo-Gounkoto complex, as well as Allied Gold Corp. and B2Gold Corp., which manage the Sadiola and Fekola mines.

Resolute reported producing approximately 331,000 ounces of gold across its African sites in 2023, with Syama as its flagship Malian project. Still, the company's fiscal position at the end of the last quarter included a net cash reserve of $146 million – which is less than what the junta demands.

Resolute's contract for the Syama, set to run through 2029, previously granted favorable operational terms. However, the junta, which has governed Mali since 2020, recently began pressuring mining companies to renegotiate economic terms in a bid to increase national revenue from resources.

This trend coincides with a surge in the global gold market, with prices rising by 28% year-to-date. In a recent statement, Resolute called the Malian government's tax claims "unsubstantiated" and expressed its intention to work with authorities toward a resolution.

The junta's demands on Resolute are not isolated. Barrick Gold has also come under scrutiny, with the government seeking $500 million in funds that it claims are owed.

Despite the tensions, Barrick CEO Mark Bristow indicated that his company is engaged in discussions with Malian authorities to achieve a "mutually acceptable outcome." He noted that the firm paid out $85 million in the context of ongoing negotiations.

Barrick's Loulo-Gounkoto complex remains one of its most productive assets, yielding 683,000 ounces in 2023 from its total production of 4.05 million ounces. A disruption of such Tier 1 operation would have a notable impact on the company and the broader market.