Mali adopts new mining code to reap gold profits

Junta leader Assimi Goita signed the code into law on Monday, his office announced on social media Tuesday.

Mali, a poor Sahel country, is one of Africa's leading gold producers.

It also boasts manganese and lithium -- two minerals key to the global energy transition -- though these have not been extensively explored.

Mali produced 72.2 tonnes of gold in 2022, including six tonnes by artisanal gold panners, then-mines minister, Lamine Seydou Traore, said in March.

Gold accounts for 25 per cent of the national budget, 75 per cent of export earnings and 10 per cent of GDP, he added.

Mali's mining sector is dominated by foreign companies, including the Canadian firms Barrick Gold and B2Gold, Australia's Resolute Mining and the British Hummingbird Resources.

They have continued to operate despite political instability and an expanding jihadist insurgency.

Mali's junta, which seized power in 2020, has made sovereignty a key priority.

The mining code reform could boost the national budget by 500 billion CFA francs ($820 million), Economy Minister Alousseni Sanou said this month.

The new mines minister, Amadou Keita, said the state hoped the mining industry would eventually contribute to between 15 and 20 per cent of GDP.

The reform allows the government to hold up to 10 per cent equity in new projects with the option to buy an additional 20 per cent during the first two years of commercial production.

And it allows the Malian private sector to hold up to five per cent.

The new code also removes tax exemptions for mining companies during operations.

According to the economy minister, exemptions on petroleum products and equipment represent about 60 billion CFA francs a year.

The junta had for months championed the proposed reform, pledging to make "gold shine for Malians".

"Mali's demand for higher stakes in mining projects... reflects a wider trend across the continent where resource-rich countries, impacted by the knock-on effects of global shocks, aim to increase their control over the mining sector," Mucahid Durmaz, an analyst with Verisk Maplecroft, said in a note.

But, he added, the Malian government is "walking a tightrope" and must be "cautious not to scare away investors".