Mali is poised to generate $1.2 billion (750 billion CFA francs) from its mining sector in the first quarter of 2025, with the entire sum expected to be paid by March 31, 2025.
This announcement was made by Finance Minister Alousseni Sanou in a speech to the parliament, highlighting the significant economic impact of the mining industry on the nation’s revenue.
The Finance Minister emphasized that Mali aims to increase state revenue from 20% to 35%, leveraging the expansion of its interest in producing assets under new mining legislation enacted in 2023.
The new accord also allows Mali to collect 7.5% of sales if gold prices exceed $1,500 per ounce, further boosting the country’s financial prospects.
Stricter stance on mining operations
In late December, following an overhaul of its mining sector, Mali received 500 billion CFA francs after negotiations with mining companies. The country’s mining industry has undergone extensive restructuring since the government adopted a stricter stance on mining operations.
- This decision was driven by a significant deficit in state revenue, estimated to be between 300 billion CFA francs and 600 billion CFA francs.
- The new mining code mandates mining companies to pay millions of dollars in back taxes and dividends. For instance, Australia’s Resolute Mining Ltd. agreed to pay approximately $160 million to resolve a tax dispute after the government detained the company’s chief executive in November.
- Additionally, B2Gold Corp. and Allied Gold Corp. announced new agreements in September, which included settlement payments for their Fekola and Sadiola mines, respectively, alongside expansion projects.
Government interference
However, not all interactions have been smooth. Recently, Barrick Gold Corp. indicated that it might cease its mining operations in Mali if authorities continue to interfere with its activities and exports.
- In response, Mali asserted that Barrick owes over $512 million in unpaid profits and taxes, a claim that Barrick has denied. In November, negotiations between the parties collapsed, adding to the tension within the sector.
Mali’s mining sector remains a critical component of its economy, contributing significantly to state revenue and employment. The government’s efforts to strengthen regulations and ensure fair contributions from mining companies are part of a broader strategy to stabilize and grow the national economy.
What you should know
In October 2024, Mali completed the nationalization of a gold mine previously owned by South African company AngloGold Ashanti and Canada’s Iamgold.
- This move is part of Mali’s broader strategy to increase control over its natural resources. Each firm previously held a 40-percent stake, while the Malian state owned the remaining 20 percent. The nationalization of the Yatela mine in the western Kayes region concluded lengthy negotiations that began before the junta seized power in a 2020 coup.
- Additionally, in May, Australian group Firefinch announced it would transfer all its shares in the Morila gold mine to Sorem for one dollar, as well as all its mining rights in Mali, also for one dollar.
These nationalization efforts are part of Mali’s strategy to increase its control over lucrative mining operations and ensure that the benefits of these resources are more equitably shared.
