Endeavour Mining, along with two other gold producers, has reached an agreement to adopt Mali’s new mining code, reported Reuters, citing Mali Government officials.
A memorandum of understanding (MoU) was signed with Somika, which is 80% owned by Endeavour Mining, with the remaining 20% held by the Malian state, as well as Faboula Gold and Bagama Mining.
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Mali’s Finance Minister, Alousseni Sanou, and the Minister of Mines announced the agreements in a televised address. The terms of the agreements were not disclosed.
The new code, enacted in August 2023, has been a point of contention for raising state ownership in mining operations and for its increased tax demands.
Mali, one of Africa’s leading gold producers, faces challenges in attracting investment and maintaining production levels due to the regulatory uncertainties posed by the new mining code.
This shift in policy contributed to a 23% decline in Mali’s gold production last year, which fell to 51 tonnes (t), highlighted the news agency.
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By GlobalDataThe three companies made a minor contribution to Mali’s overall gold production. Faboula and Bagama each began production in 2021, producing 500kg of gold each. Somika’s Kalana project is yet to commence. All have been largely inactive since the adoption of the mining code.
Somika director Abdoul Aziz said that the company’s mine construction “will begin six months after the signing of the agreement, and production will start 18 months later”.
He further detailed the projected financials and job creation, with Somika expecting a ten-year lifespan and an annual turnover of CFA Fr135bn ($238.9m).
Bagama and Faboula anticipate five-year lifespans with turnovers of CFA Fr50bn and CFA Fr75bn, respectively, and each company is expected to create around 2,000 jobs.
The situation contrasts with Mali’s largest gold miner, Barrick Mining, which has suspended operations at the Loulo-Gounkoto complex following government actions including export blocks, executive detentions and seizure of gold bullion.
Barrick has initiated arbitration proceedings against the state of Mali at the International Centre for Settlement of Investment Disputes, a World Bank entity.
