Mali’s Gold: A Shifting Landscape
By Darius Spearman (africanelements)
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Mali’s Mining Code Overhaul
Mali, a nation rich in gold, has embarked on a significant transformation of its mining sector. The military-led government, which has been in power since coups in 2020 and 2021 (aa.com.tr), implemented a new mining code in August 2023. This new code aims to increase state ownership and revenue from mining assets. An implementing decree in April 2025 further detailed these changes (investmentpolicy.unctad.org).
The new regulations prioritize state interests in strategic mineral zones. They also limit the number of exploration permits an entity can hold. Furthermore, government approval is now mandatory for any transfer or change of control in mining permits (investmentpolicy.unctad.org). The state’s free share in mining ventures remains at 10%, but total ownership can now reach up to 30%, with priority dividend rights (investmentpolicy.unctad.org). This represents a substantial shift from the previous 2019 code, which capped state and private Malian interest at 20% in new projects (reuters.com). The new code also removed tax exemptions for mining companies during operations (african.business). It also requires local hiring and sourcing from Malian businesses (investmentpolicy.unctad.org).
Impact on Gold Production
The implementation of this new mining code has sparked intense conflicts with mining companies. This has contributed to a decline in Mali’s gold production. Last year, Mali’s gold production fell by 23%, totaling 51 metric tons. This decline highlights the immediate impact of the regulatory changes on the mining sector.
Despite these challenges, some companies have agreed to the new terms. Endeavour Mining, along with Faboula Gold and Bagama Mining, has agreed to transition to Mali’s new mining code. A new memorandum of understanding was revealed with Somika SA, which is 80% owned by Endeavour and 20% by the Malian government, Faboula Gold, and Bagama Mining. The specifics of these agreements have not been made public. These three companies represent a small portion of Mali’s overall gold production. Faboula and Bagama began production in 2021, each contributing 500 kg. The Kalana project, managed by Somika, has not yet started production. Since the adoption of the mining code, all three companies have been mostly inactive. Somika’s director, Abdoul Aziz, stated that mine construction will begin six months after the agreement’s signing. Production is expected 18 months thereafter. Somika is projected to operate for 10 years, generating an annual revenue of 135 billion CFA francs ($238.9 million). Bagama and Faboula are each anticipated to have five-year lifespans, with revenues of 50 billion and 75 billion CFA francs respectively. Each firm is likely to create approximately 2,000 jobs.
Mali’s Gold Production Decline
Barrick Mining’s Standoff
Barrick Mining, Mali’s largest gold producer, has faced significant challenges and a prolonged standoff with the Malian government. Operations at Barrick’s Loulo-Gounkoto complex have been suspended since mid-January (reuters.com). The government obstructed Barrick’s gold exports and seized three metric tonnes of gold bullion (mugglehead.com). In mid-July, military helicopters removed an additional tonne of gold, valued at an estimated USD$117 million, from the Loulo-Gounkoto complex (mugglehead.com). This additional tonne of gold was separate from the three tons seized in January (reuters.com). Authorities may have sold the gold to support mine operations now under state control (mugglehead.com).
The Malian court appointed former health minister Soumana Makadji as temporary administrator of the Loulo-Gounkoto complex in June (reuters.com). Makadji enlisted the state mining company’s chairman and former Loulo-Gounkoto executive Samba Toure to help with operations (reuters.com). Barrick’s subsidiaries continue to own the mine, but control over operations has shifted to an external administrator (aa.com.tr). Barrick has called the ruling “unjustified” and expressed deep concern over the detention of its employees, stating they remain “unjustly imprisoned and used as leverage” (aa.com.tr). A Malian judge rejected Barrick’s appeal to free its four detained employees (mining.com). Barrick has initiated arbitration proceedings at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) (aa.com.tr). Barrick had a $370 million settlement offer related to alleged unpaid taxes (aa.com.tr).
Disputes Over Taxes and Royalties
The core of the dispute between Mali and Barrick Gold revolves around increased taxes, revised contracts, and regulatory crackdowns. Mali’s government has sought to increase its share of mining profits. An internal audit indicated that the country was not receiving a fair share (reuters.com). This has led to the removal of tax exemptions for mining companies during operations (african.business). It has also led to attempts to increase state and private Malian interests in mining projects (african.business). The conflict intensified with the Malian government’s seizure of gold stored at Barrick’s complex (african.business). It also intensified with the placement of Barrick’s Loulo-Gounkoto gold complex under state control (reuters.com).
The Malian government has accused Barrick of not properly paying taxes, royalties, and dividends owed to the state (ctvnews.ca). They also claim Barrick has a contract that does not reflect Mali’s legitimate interests (ctvnews.ca). Furthermore, the government claims Barrick has kept the state out of the effective management of the mine and its revenues (ctvnews.ca). This aggressive stance is part of a broader trend among military governments in Mali, Niger, and Burkina Faso. They are all seeking a bigger share of mining revenue, compelling investors to adopt new rules (reuters.com).
Key Mining Terminology
Payments made to the owner of a resource for the right to extract it. In mining, this is often a percentage of the value of the minerals extracted.
A portion of a company’s profits distributed to its shareholders. In the context of state ownership, this refers to the state’s share of profits from mining ventures.
Official authorizations granted by a government that allow a company to conduct mining operations in a specific area.
Licenses that grant a company the right to explore for mineral deposits in a designated area before full-scale mining begins.
Legislation that requires foreign companies operating in a country to use a certain percentage of local labor, goods, and services in their operations.
Foreign Investment and Regulatory Uncertainty
The new mining code in Mali, combined with the military government’s aggressive tactics, has created an environment of regulatory uncertainty. This uncertainty has “spooked” foreign investors (african.business). The increased state ownership, removal of tax exemptions, and instances of state control over foreign-owned mines signal a higher risk for international capital. While Mali aims to leverage high commodity prices and regain control of its natural resources, these actions could deter new foreign investment (reuters.com). Existing companies may also reconsider their operations. The shift towards Russian interests further complicates the landscape for traditional Western investors (reuters.com).
Despite Mali being among Africa’s leading gold producers, regulatory uncertainties have negatively impacted both investment and production. The country remains mired in a political and security crisis. This crisis stems from armed group attacks and separatist conflicts since 2012 (aa.com.tr). This ongoing instability adds another layer of risk for potential investors. The government’s actions, while aimed at boosting state revenue, could lead to a decrease in foreign direct investment from nations where affected mining companies are based. This could also lead to diplomatic tensions. The pivot towards Russian interests suggests a reorientation of Mali’s international economic partnerships, potentially impacting its traditional trade relationships.
Environmental and Social Considerations
The new mining code in Mali includes provisions aimed at enhancing benefits for local communities. It also ensures that mining operations contribute to the local economy. The code mandates local hiring and sourcing materials from Malian businesses (investmentpolicy.unctad.org). This emphasis on local content is a significant step towards ensuring that the wealth generated from mining benefits the Malian people directly. However, the available information does not explicitly detail specific environmental protection measures or comprehensive community relations frameworks beyond these local content requirements. The broader implications for environmental governance and the long-term social impact on communities directly affected by mining operations are not fully elaborated.
While the focus on local hiring and sourcing is positive, a comprehensive approach to environmental and social governance (ESG) is crucial. This would include clear guidelines for environmental impact assessments, rehabilitation of mining sites, and mechanisms for community engagement and grievance redress. Without detailed provisions, there is a risk that environmental concerns might be overlooked. The long-term well-being of communities living near mining operations could also be impacted. As Mali seeks to maximize its returns from natural resources, integrating robust ESG standards will be essential for sustainable development and maintaining social license to operate.
The State’s Expanding Role in Mining
The new mining code significantly increases the state’s involvement in mining operations. It allows for up to 30% total ownership in ventures, including a 10% free state share (investmentpolicy.unctad.org). The government has also demonstrated its capacity to directly intervene and manage mining assets. This is evident in the takeover of gold mines abandoned by foreign companies (reuters.com). It is also evident in the placement of Barrick’s Loulo-Gounkoto complex under state control (reuters.com). While the specific structure and experience of a dedicated state mining company are not detailed, these actions indicate a strong governmental intent and increasing practical involvement in the management and control of mining operations.
The state’s growing role suggests a strategic shift towards greater national control over valuable resources. This move aligns with a broader trend in West African states seeking to leverage high commodity prices and boost their economies (reuters.com). The government’s ability to appoint administrators and manage operations, even temporarily, underscores its commitment to this new direction. However, the long-term success of this increased state involvement will depend on the capacity and expertise of state-controlled entities to manage complex mining operations efficiently and profitably. This will also depend on their ability to attract necessary investment and technology.
Mali’s Increased State Ownership in Mining
Previous Code (2019)
Maximum state and private Malian interest: 20% in new projects.
New Code (2023/2025)
Free state share: 10% (upheld)
Potential total state ownership: Up to 30%
Priority dividend rights for the state.
Implications for International Trade Relations
The gold seizures and export blockades, particularly those involving Barrick Gold, highlight Mali’s assertive stance. This stance is aimed at regaining control over its natural resources and leveraging high commodity prices. These actions, while intended to boost state revenue, introduce significant regulatory risk and uncertainty for foreign companies. Such measures could strain trade relations with countries where the affected mining companies are based. This could potentially lead to diplomatic tensions or a decrease in foreign direct investment from those nations.
The shift towards Russian interests, noted in the context of these actions, suggests a reorientation of Mali’s international economic partnerships (reuters.com). This could impact its traditional trade relationships. As Mali navigates this new path, the international community will be watching closely. The balance between national sovereignty over resources and maintaining a favorable environment for foreign investment will be crucial for Mali’s economic future. The long-term implications for Mali’s standing in global trade and investment remain to be seen.
About the Author: Darius Spearman is a scholar and author of “A War for the Soul of America: A History of the Culture Wars.” He is also the founder of African Elements, a platform dedicated to exploring African and African Diaspora history, culture, and current events. His work often focuses on the intersection of history, economics, and social justice, providing insightful analysis from an African American perspective.
ABOUT THE AUTHOR
Darius Spearman has been a professor of Black Studies at San Diego City College since 2007. He is the author of several books, including Between The Color Lines: A History of African Americans on the California Frontier Through 1890. You can visit Darius online at africanelements.org.
