New York-based Flagship Gold has partnered with Mali’s state-owned miner, the Mineral Resources Research and Exploitation Company (SOREM), to restart production at the Morila gold mine.
This marks the first US investment under Mali’s new mining code, which was adopted in August 2023.
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The agreement, signed on 9 October, allows Flagship to acquire equity in operating company Morila SA. The Morila mine contains estimated reserves of 2.5 million ounces (moz).
Located in the southern city of Sanso in Mali’s Sikasso region, the Morila mine was taken over by the state in June after Australia’s Firefinch abandoned operations in 2022 due to declining output and rising costs.
The government purchased an 80% stake from Firefinch Limited for a symbolic one US dollar, reported Business Insider Africa.
Flagship is entering Mali at a time when there is a wave of resource nationalism across the Sahel, with military-led governments in neighbouring countries such as Niger, Guinea and Burkina Faso tightening control over mineral assets, reported Reuters.
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By GlobalDataMali’s new mining code increases state control by allowing up to 30% ownership in new projects and removing key tax exemptions.
While this overhaul has caused concern among foreign investors, Russian and Chinese companies have expanded their presence through state-backed deals.
“This is a win-win partnership,” stated Mali’s Mines Minister Amadou Keita.
David Alan Miller, legal counsel for Flagship, mentioned that the company is currently unable to disclose further information about Morila’s financing plans beyond what is publicly available, reported Reuters.
The Morila mine’s revival comes amid a surge in gold prices, which recently surpassed $4,000/oz.
Despite being one of Africa’s top gold producers, Mali has experienced a dip in investment due to regulatory crackdowns and insecurity.
According to government data, industrial gold production experienced a significant decline of 32% year-on-year, totaling 26.2 tonnes by the end of August.
