Mali has adopted a new mining legislation that enables the country to acquire up to a 30% ownership in brand-new mineral ventures and increase its earnings from the crucial sector.
Assimi Goita, the head of the Junta, signed the code into law on Monday (August 28), according to a statement released by his office on Tuesday (August 29).
One of Africa’s top producers of gold is Mali.
Lithium and manganese, two minerals essential to the global energy shift, are also found there, though they have not yet been thoroughly studied.
Lamine Seydou Traore, the country’s then-mines minister, stated in March that Mali produced 72.2 tonnes of gold in 2022, including six tonnes from artisanal gold miners.
According to him, gold accounts for 25% of the federal budget, 75% of export revenue, and 10% of GDP.
Foreign enterprises dominate Mali’s mining industry, including the Canadian businesses Barrick Gold and B2Gold, the Australian company Resolute Mining, and the British company Hummingbird Resources.
Despite a growing terrorist insurgency and political unrest, they have continued to conduct business.
Sovereignty is a top concern for Mali’s junta, which took control of the country in 2020.
- Boosting the National Budget
This month, Alousseni Sanou, the minister of the economy, predicted that the revision of the mining code might increase the national budget by 500 billion CFA francs ($820 million).
The state anticipates that the mining sector would eventually contribute between 15 and 20 percent of GDP, according to the newly appointed minister of mines, Amadou Keita.
With the opportunity to purchase an extra 20% of the stock within the first two years of commercial production, the reform enables the government to hold up to 10% of the equity in new enterprises.
Additionally, it permits the Malian private sector to hold up to 5%.
Additionally, the new legislation eliminates tax breaks for mining businesses while they are in operation.
The exemptions on petroleum equipment and products amount to around 60 billion CFA francs annually, according to the economy ministry.
The junta has supported the reform proposal for months, promising 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”.
