Mali Introduces New Mining Law Allowing State Stakes and Increased Revenues

Mali Introduces New Mining Law to Increase State Stakes and Revenue Collection

Mali, a country located in the Sahel region and considered one of the poorest in the world, has recently announced the issuance of a new mining law. This law allows the state to take stakes of up to 30% in new mining projects and aims to collect more revenues from this vital sector.

The law was signed by Junta commander Asimi Guita on Monday, as officially announced by his office on social media on Tuesday. The mining sector in Mali is dominated by foreign groups, including Canadian, Australian, and British companies, which continue to operate in the country despite the expansion of jihadist activity and political unrest.

Mali’s Wealth of Mineral Resources

Besides being one of the leading gold-producing countries in Africa, Mali also possesses other largely unexplored mineral resources. These resources include iron, manganese, and lithium, which are essential components in the renewable energy sector.

In 2022, Mali produced a total of 72.2 tons of gold, with six tons coming from artisanal mining. The revenue generated by gold alone accounted for 25% of the national budget, 75% of export earnings, and 10% of GDP, as stated by the minister of mines in March. The country aims to further maximize its wealth by increasing the mining sector’s contribution to 15 or 20 percent of GDP.

The New Mining Law’s Objectives and Reforms

The ratification of the mining law reform is expected to significantly boost the state budget by at least 500 billion CFA francs (equivalent to 762 million euros), as stated by Economy Minister El Husseiny Sanou during the text’s session in the provisional legislature on August 8.

Under the new law, the state now has the authority to take a 10% stake in mining projects, with the option to purchase an additional 20% during the first two years of commercial production. The law also allows the possibility of granting an extra 5% participation to the financial private sector, increasing the national public and private benefit in new projects to 35% from the current 20%.

In addition, the mining law reform abolishes tax exemptions previously granted to companies during operation. To ensure local development, the law also provides for the establishment of funds dedicated to local development and road construction.

A Broader Trend across the Continent

Resource-rich countries in Africa, affected by global shocks, are increasingly seeking to tighten their grip on the mining sector. This trend is reflected in Mali’s new mining law, according to the consultancy and risk analysis firm V Risk Maplecroft.

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