APA – Bamako (Mali) – Bamako has revised the mining code that allowed the state to take a 10 percent stake in the flourishing gold market.
Two pieces of legislation were passed by the National Transitional Council (CNT) on Tuesday 8 August 2023.
These laws relate in particular to the adoption of a new mining code that is supposed to be more advantageous for the state.
This new mining code provides for greater participation by the Malian state and the national private sector in gold production.
As a result, mining companies will have to cede 10 percent of their stake to the state free of charge, as in the past.
The state may also acquire an additional 20 percent stake, compared with 10 percent under the previous mining codes.
Local investors now also have the option of acquiring a 5 percent stake in the capital of mining companies.
The new code also covers local content, regulating the role given to Malian companies and national workers in the mining sector.
The law on local content establishes a new framework for the development of local human and material capacities.
Mali’s new mining code provides for a major change in mining agreements.
Exploration permits are now issued for a maximum of nine years, and large-scale mining permits for 12 years, but may be renewed. In addition, the tax and financial regime has been revised by abolishing the exemptions on fuel granted to miners during exploitation; they will be maintained only during the exploration years.
In addition, mining companies must contribute 0.75 percent of their quarterly turnover to a mining fund for local development.
These are undoubtedly major steps forward, even if fears remain.
For some analysts, the gold sector is highly competitive, and for it to flourish, investors need to be offered a more attractive business environment.
Mali is one of the largest gold producers in sub-Saharan Africa. However, the country is part of a region – West Africa – that also includes other major gold producers such as Ghana, Burkina Faso and Guinea.
If investors believe that the business environment is more advantageous in these countries, they will not hesitate to invest there.
For others, rather than increasing the state’s share in the mining sector, it would be better to consolidate the gains that have been made, especially as recovering the 10 percent that the old code granted the state was no walk in the park.
According to these observers, the wisest thing to do would also be to upgrade the local private sector to create a public-private partnership that would enable the state to make good use of its share.
The 500 billion CFA francs of additional resources that the state could reap may seem insufficient insofar as the national budget for this year alone is estimated at more than 2,000 billion CFA francs.
If it were properly exploited, Mali’s mining sector alone could cover this amount.
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