An Australian mining company, Resolute Mining, says it will pay Mali’s military government $160m (£126m) to settle a tax dispute, after the company’s British boss and two other staff were unexpectedly detained 10 days ago.

Reports say Terry Holohan and his colleagues were arrested while travelling to the capital city, Bamako, for what they were expecting to be routine negotiations.

Resolute, which owns a gold mine in Mali, said on Sunday it would pay $80m immediately from existing cash reserves, and the rest in the coming months.

Mali is one of Africa’s top gold producers.

It is is seeking to extract a greater share of income from foreign operators in the sector.

It is not yet clear when the three Resolute employees will be released.

Part of the conditions for their release were that they must sign the memorandum of understanding and complete the initial payment, according to a report by the French broadcaster RFI.

Mali’s military rulers detained the three Resolute executives on charges of forgery and damaging public property, seen as an attempt to blackmail the Australian company amid an ongoing state crackdown on foreign – mostly Western – mining companies in the West African country.

Since taking power in a coup in 2021, Mali’s junta has sought to reconfigure its political and trade relationships with international partners.

Last year, President Col Assimi Goïta signed into law a new mining code increasing the maximum stake for state and local investors from 20% to 35%.

Additional reporting by Natasha Booty