Russia is set to build a major gold refinery in Mali, an African nation that generates more income from the precious metal than any other commodity.
On Tuesday evening, a representative from Mali’s military government announced that the country had signed a non-binding memorandum of understanding with Russia for the plant’s construction. The refinery, situated in Mali’s capital Bamako, will be capable of producing approximately 200 tonnes of gold per year.
“This will allow us not only to control all gold production but also to be able to correctly apply all taxes and duties,” said Mali’s Minister of Finance Alousséni Sanou.
The country produced 66.2 tonnes of gold last year, primarily derived from major producers operating in the country like B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG), Barrick Gold Corporation (TSX: ABX) (NYSE: GOLD), Resolute Mining (ASX: RSG), Endeavour Mining (TSX: EDV) and Allied Gold (TSX: AAUC).
Sanou said the MOU will be valid for four years and did not specify a timeline for the refinery’s construction.
Russia and Mali are economic allies
In July, Russian President Vladimir Putin welcomed Mali’s Interim President Assimi Goïta to the nation following the second annual Russia-Africa Economic and Humanitarian Forum in Saint Petersburg.
“We regard Mali as a key partner in the region and share your interest in bringing bilateral relations to a completely new level,” said Putin to Goïta and associates.
“Our objective is to step up our trade and investment ties.”
In March, Russia and Mali collaborated to mine lithium in the African country’s Sikasso region. Moscow’s state-owned nuclear company Rosatom holds a 75 per cent stake in the joint venture.
Russia also increased the number of state scholarships provided to students from Mali this year from 35 to 290 as part of their alliance.
Gold accounted for more than 80 per cent of Mali’s total exports in 2021. The metal is the country’s most valuable commodity and Mali’s Ministry of Mines estimates that the nation holds 800 tons of gold deposits.
The country also has significant reserves of iron ore, lithium, uranium and manganese. Over 10 per cent of Mali’s population, more than two million people, rely on the mining industry for income.