Mali (Common Wealth) _Mali has passed a new mining code that allows the government to own up to 30% of new mineral operations and receive more revenue from the critical industry.
Junta leader Assimi Goita signed the code into law on Monday (Aug. 28), his office said Tuesday (Aug. 29) on social media. Mali is one of Africa’s leading gold producers, accounting for 2% of global output, with China, Australia, Russia, and Canada being the largest producers.
According to GlobalData, Mali will be the world’s fifteenth-largest gold producer in 2022, with output down 3.83% from 2021. Mali output climbed at a CAGR of 7% over the five years to 2021 and is predicted to decrease at a CAGR of 1.06% between 2022 and 2026.In its West Africa Gold Mining to 2026 study, GlobalData employs proprietary data and analytics to present a comprehensive view of this market.
It also has manganese and lithium, two minerals that are important in the global energy shift, albeit they have not been thoroughly investigated. Lamine Seydou Traore, Mali’s then-mines minister, stated in March that the country would generate 72.2 tonnes of gold in 2022, with artisanal gold panners accounting for six tonnes.
According to him, gold accounts for 25% of the national budget, 75% of export revenues, and 10% of GDP. Foreign corporations dominate Mali’s mining sector, including Canadian firms Barrick Gold and B2Gold, Australian Resolute Mining, and British Hummingbird Resources.
Despite political instability and a rising terrorist insurgency, they have continued to operate. Mali’s junta, which took control in 2020, has prioritized sovereignty. According to Economy Minister Alousseni Sanou, the mining code amendment might increase the national budget by 500 billion CFA francs ($820 million). Amadou Keita, the new mines minister, stated that the state anticipated the mining industry would eventually contribute between 15 and 20% of GDP.
The reform permits the government to own up to 10% of new projects, with the potential of purchasing an additional 20% during the first two years of commercial production. It also permits the Malian private sector to retain up to 5%. The new legislation also eliminates tax breaks for mining businesses while they are operating.
Exemptions on petroleum items and equipment amount to approximately 60 billion CFA francs per year, according to the economy ministry. For months, the junta had championed the proposed reform, promising to make “gold shine for Malians.” He went on to say that the Malian administration is “walking a tightrope” and must be “wary not to scare away investors.”
Mali is one of Africa’s leading gold producers, with mining companies such as Barrick Gold (ABX.TO), B2GOLD (BTO.TO), Resolute Mining (RSG.AX), and Hummingbird Resources (HUMR.L) based there.AngloGold Ashanti is another major gold producer in Mali. During 2020-2021, B2Gold’s output increased by 4%, Barrick Gold’s output declined by 7%, and AngloGold Ashanti’s output decreased by 20%.
It was unclear whether the code would affect previous projects. Last week, a mining ministry official stated that this would be dependent on the implementing decrees, which have yet to be released.
Alousseni Sanou, Mali’s Finance Minister, stated on Monday evening that an assessment of the mining industry revealed that the government was missing 300 billion to 600 billion CFA francs ($497 million to $995 million).
According to Mining Minister Amadou Keita, some state losses have been caused by mining corporations transporting their gold ore to a different, tax-exempt mine to be processed, and the new rule would tighten down on this.
He also stated that the granting of mining titles would be given more attention. “From now on, for the sake of transparency and inclusiveness, mining titles will be signed by several ministers (finance, mining, environment, etc.),” he said on state television.
