Mali’s implementation of a new mining code in 2023 sent state revenue from the industry up by over 52 per cent last year.
Gold producers and companies involved with the exploitation of other metals and minerals paid the national Treasury about US$1.4 billion in 2024, according to a mining industry document obtained by Reuters this week. The country only pulled in approximately US$665,000 in 2023.
The increased rate of cash flow is primarily linked to the higher taxes permitted by the code. Companies were previously exempt from state tariffs during the exploitation phase at their respective operations. The 2023 legislation also enables Mali to up its stake in gold concessions and forces mine operators to contribute 0.75 per cent of their quarterly revenue to a local development fund.
Even though the nation produced 24 per cent less gold than 2023 last year, the code enabled a substantial boost in cash flow.
Gold is Mali’s number one commodity by far, accounting for over three quarters of the country’s total exports. Major international mining companies like Barrick Gold Corp (TSE: ABX) (NYSE: GOLD), B2Gold Corp (TSE: BTO) (NYSE: BTG) (FRA: 5BG) and Endeavour Mining PLC (OTCMKTS: EDVMF) currently have large-scale operations in Mali.
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Following a change of government resulting from a military coup in 2021, the nation’s authorities demanded an increased share of the profit derived from gold and other commodities. This was solidified by enacting the new mining code in 2023.
That year, the Malian government demanded half a billion in unpaid taxes from Barrick, which the company disputed. This conflict eventually led to the government detaining four employees in November last year and issuing an arrest warrant for CEO Mark Bristow.
Early this year, Mali took action and seized three metric tons of gold from Barrick’s Loulo-Gounkoto mine, valued at about C$245 million. The country holds a 20 per cent stake in this operation. Barrick suspended operations after the occurrence.
Two months ago, Barrick reached a settlement agreement with Mali and agreed to pay US$438 million. Production at Loulo-Gounkoto could resume later this year, but nothing is certain at the moment.
The arrest warrant for Bristow will presumably be revoked in the near future and the employees will be released. No updates have been circulating on this subject.
Duncan Wanblad, chief executive of Anglogold Ashanti PLC (NYSE: AU) (FRA: HT3), said the African country’s recent industry developments were “of grave concern to any prospective mining investor” at a South African conference in February.
A persistent rate of violence related to the gold mining sector has also plagued the nation. Last February, a convoy leaving B2Gold’s Fekola operation for Bamako was attacked, leaving three dead and several injured.
rowan@mugglehead.com
