Mali and Russia have signed a deal to build a Gold Refinery in Bamako, the capital city of Mali. The deal involves building a refinery to process 200 tons of gold annually. Reports say the project will allow Mali to control all gold production in the country and “correctly apply all taxes and duties”.
Commentators in Mali say the deal represents a major shift from the many lopsided agreements the country reached with mining firms in the past that saw the country’s resources exploited without any real financial benefits for Malians.
Mali is known for being one of Africa’s leading gold producers. Gold mining has been a major economic activity in the country. The gold mining industry contributes significantly to Mali’s economy, providing revenue and employment opportunities and accounting for about 9% of gross domestic product in 2021 and 2022, providing more than half of total tax revenues in 2022.
It is recorded that state revenue from gold mining companies in Mali rose 35% year on year in 2022 to a record 763.7 billion CFA francs ($1.3 billion) due to increased tax revenues.
According to ministry officials in the country, the increase is mainly attributable to improved operations of the country’s collection services, which include tax services, customs, and estate services. Mali ended several tax exemptions which also helped it raise revenues significantly in 2021.
Reports by Reuters say the military-led government is in talks with gold miners over proposed changes to its mining law that could see it boost state and private Malian interests in new projects to 35%, from up to 20% currently.
What the government aims to achieve now is the transition from mere exploitation of the country’s natural resources to the establishment of a full value chain that would see Mali emerge as a major hub for refined gold, sources say.
Mali is currently home to several major mining companies including Barrick Gold, However, it is of note that the impact of gold mining on local communities and the environment has been a subject of concern, especially as a large part of the mining in the country is artisanal.
What Mali’s interim government intends to do to address the terrible conditions under which the estimated 200,000 artisanal gold miners in Mali, one of the largest sources of employment, remains to be seen.
Some industry experts have proposed that artisans receive exclusive rights to mine gold within a permit area, similar to the rights granted to international companies. They say artisans with full investor rights can be asked to assume similar social, environmental, and fiscal responsibilities, proportional to their projects.
Industry watchers say it expected that new rules would be introduced by the government to ensure improved environmental protection laws and better income for the Malian workforce in the industry, which would fully take into consideration the large artisanal mining population.
