Mali’s new mining law, which increases taxes and state ownership requirements, is causing concern among gold mining companies, with industry leaders warning that it could discourage future investment in the country.
The revised regulations, which apply to new projects, require companies to divest 35 percent ownership to Malian investors, up from 20 percent previously. Additionally, the royalty tax on gold production has been increased to 10.5 percent from around 6 percent, making it one of the highest in the region.
Despite record-high gold prices, mining executives at the African Mining Indaba in Cape Town told Reuters that these new policies make Mali a less attractive investment destination.
Executives from major gold mining companies operating in West Africa said the new rules create a financial burden that could slow investment.
‘As taxes rise and investment becomes less viable, we have other options and can take our money elsewhere,’ one gold mining CEO told Reuters.
Some government officials privately acknowledge that the new laws may be too stringent, and discussions on revising the tax requirements are reportedly ongoing.
‘From my conversations with some in the government, there is a growing realisation that the mining code is too harsh’ another CEO told Reuters.
Mali’s military-led government has aggressively enforced the new regulations, creating tensions with top investors like Barrick Gold.
In January, Malian authorities seized Barrick’s gold reserves by helicopter, arrested several employees, and issued an arrest warrant for CEO Mark Bristow over a dispute related to the new mining law.
Similarly, Resolute Mining was forced to pay $160 million to secure the release of its detained CEO and executives, highlighting growing friction between the government and foreign investors.
With investment risks increasing in Mali, gold producers are shifting their focus to neighbouring West African countries such as Guinea, Cote d’Ivoire, Senegal, and Burkina Faso, where mining regulations are considered more favourable.
‘The lack of investment in new mines and exploration activities could shorten the lifespan of existing mines in Mali,’ Jorge Ganoza, CEO of Fortuna Mining Corp, told Reuters.
Some companies, like Robex, are already planning to exit the Malian market, struggling to find buyers for their Nampala gold mine as they shift focus to Guinea.
Despite these challenges, some mining firms are still negotiating with Mali’s government. Resolute Mining confirmed that talks are ongoing about the long-term future of its Syama mine and the transition to the new mining code.
‘We are talking,’ Barrick’s Bristow told Reuters, acknowledging the challenges while maintaining an open dialogue with Mali’s authorities.
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