Three Miners Agree to Mali’s Controversial Gold Code, Seeking Restart
Malian government officials have announced that London-listed Endeavour Mining and two smaller gold producers have agreed to transition to the country’s new, contentious mining code, potentially unlocking stalled projects. This development comes amid a severe production slump and ongoing disputes between authorities and major international miners.
The new code, implemented in August 2023, significantly increases taxes and mandates greater state ownership of mining assets. Its introduction has sparked fierce conflict with companies contributing to a 23% decline in Mali’s gold output last year, pushing production down to 51 metric tons.
Late Monday on state television, Finance Minister Alousseni Sanou and Minister of Mines revealed memoranda of understanding (MoUs) with Somika SA (80% Endeavour, 20% Malian state), Faboula Gold, and Bagama Mining. While the specific terms of the agreements were not disclosed, they pave the way for these companies to resume largely idle operations since the code’s adoption.
The three operators represent a tiny fraction of Mali’s gold production. Faboula and Bagama, each contributing just 500 kg since starting in 2021, are minor players. Somika’s Kalana project has yet to produce any gold. Somika director Abdoul Aziz stated construction will commence six months post-signing, with production beginning 18 months after. “Somika is projected to operate for 10 years, generating annual revenue of 135 billion CFA francs ($238.9 million),” Aziz noted. Sanou added Bagama and Faboula anticipate five-year lifespans with revenues of 50 billion and 75 billion CFA francs respectively, with each firm likely creating around 2,000 jobs.
Endeavour Mining declined to comment. Attempts to reach Faboula Gold and Bagama Mining for reaction were unsuccessful.
This partial agreement stands in stark contrast to the fate of Mali’s largest producer, Barrick Mining (ABX.TO). The Canadian firm halted operations at its Loulo-Gounkoto complex in mid-January after facing export blockages, executive detentions, and the confiscation of three tonnes of gold. Barrick is now embroiled in a dispute with the Malian government and has initiated arbitration proceedings at the World Bankโs International Centre for Settlement of Investment Disputes (ICSID).
Despite ranking among Africa’s top gold producers, Mali’s regulatory climate remains a major hurdle, significantly deterring foreign investment and undermining production stability, leaving the country’s future output uncertain.
