Mali’s new mining law needs review to win back investors

A new mining law in Mali that raises taxes and seeks to hand over big stakes in assets to the state and local investors will need to be loosened up if gold companies are to invest in new projects. The new rules compel companies operating in Africa’s second-biggest gold producer to divest a 35 per cent share of new projects to Malian investors, up from 20 per cent previously and raise royalty taxes to 10.5 per cent from around 6 per cent. Gold, which accounted for 80 per cent of Mali’s exports in 2023, has hit successive record highs over the past year, as the state’s interest and the higher royalty tax are too much to encourage investment, according to a Reuters report.

Mali’s mines ministry declined to comment. It said when the review of the previous code was announced in 2023 that an internal audit had shown it was not receiving a fair slice of profits from the mining sector while granting too many tax breaks. Jorge Ganoza, the CEO for Fortuna Mining Corp, a Canadian miner seeking to expand in West Africa, said he would not consider Mali as a potential destination for investment. He said he expects producers’ focus to shift to rich deposits in Guinea, Ivory Coast, Senegal and Burkina Faso. The lack of investment in new mines and exploration activities could shorten the lifespan of existing mines in Mali, he said. “Do you think Resolute or Barrick today is looking to expand investments in the country? No,” Ganoza said.