Mali Recovers Over $1 Billion in Mining Arrears After Audit

The Malian government has retrieved more than $1 billion in unpaid dues from mining companies, according to Finance Minister Alousséni Sanou. This significant recovery is one of the country’s largest ever clawbacks from its lucrative mining sector. The military-led government initiated a comprehensive audit of the sector in early 2023, uncovering substantial shortfalls in state revenue.

The audit’s findings led to the establishment of a recovery commission, which identified financial irregularities and shortfalls estimated to be between $500 million and $1 billion. This prompted a major overhaul of the industry, including the introduction of a new mining code that increases royalties, boosts state ownership in mining companies, and eliminates stability clauses.

The reform of the mining industry sparked a two-year dispute with Canada’s Barrick Mining, Mali’s top gold producer, before a deal was reached in November. Although Minister Sanou did not specify whether the recovered amount includes the recent agreement with Barrick, the new measures are expected to generate hundreds of millions of dollars in additional annual revenue for the state.

The renegotiation committee’s primary objective was not only to recover lost funds but also to secure a larger stake for the state in mining contracts. As one of Africa’s leading gold producers, Mali relies heavily on mining for export earnings and fiscal revenues. The successful recovery of over $1 billion in arrears demonstrates the government’s efforts to ensure that the mining sector contributes fairly to the country’s economy.

The new mining code and recovery efforts are expected to have a significant impact on Mali’s economy, with potential long-term benefits for the country’s development. As the government continues to implement these reforms, it remains to be seen how the mining industry will respond and adapt to the changes. Nevertheless, the recovery of over $1 billion in arrears marks a significant step towards a more equitable and transparent mining sector in Mali.