Mali and its mining sector: A focus on gold, diamonds, and uranium exploration

Mali and its mining sector: A focus on gold, while minerals are unexplored

Mali, a poor, heavily indebted and land-locked country in Sub-Saharan Africa has great potential wealth in bauxite, iron ore, base metals and phosphate deposits; however, a lack of infrastructure has denied devolvement of these mineral resources. Furthermore, the Government of Mali’s reformed mineral code in the 1990s attracted numerous foreign investors, specifically in the gold industry.

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Simultaneously, Mali relaxed the enforcement of mining codes and this led to greater foreign investment in the mining industry. From 1994 until 2007, national and international mining companies were granted approximately 150 operating licences along with more than 25 certificates for mineral exploitation and an excess of 200 research permits. Government revenue originating from mining contracts totalled less than 1% of the state’s income in 1989, but increased to nearly 18% in 2007. Rising international gold prices have also increased exploration, investment, and production in the mining sector. The upsurge in gold prices, from an average US$ 445 per ounce in 2005 to US$ 900 per ounce in 2009, has nearly doubled Mali’s profit on gold production. This increase in the gold price has translated into higher royalties (a minimum of 3% and maximum of 65% depending on when the mine started production), profit taxes, and dividend payments.(4)
Mali’s mineral wealth

Mali has abundant mineral wealth. Gold has become Mali’s second-largest export after cotton and has emerged as a leading export for the African country since 1999. Mali is West Africa’s second largest gold producer with an estimated 2009 output of 1.6 million ounces, or 49 tonnes, and total gold wealth is estimated at 350 tonnes.(5)

Several companies in Mali are currently carrying out uranium exploration in the Falea and Gao regions, where the uranium potential is estimated to be 5,200 tonnes. Furthermore, Mali has the potential to develop diamond explorations. In the Kayes administrative region, also known as “Mining region 1”, 30 kimberlitic pipes have been discovered of which eight show traces of diamonds. Diamonds have also been picked up in the Sikasso administrative region, in southern Mali.(6)

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