Mali completes the seizure of international firms’ abandoned gold mines
The government of Mali declared over the weekend that it had finished acquiring the Yatela and Morila gold mines that had been abandoned by their former owners, but it is still unclear how any unrealized value will be disclosed.
Similar to other West African nations like Burkina Faso and Niger, Mali is facing difficult obstacles as it tries to regain control of its natural resources and use high commodity prices to boost its economy. The takeovers and the failure to reveal how the operations will be funded underscore these difficulties.
The military rulers of Mali, who came to power following coups in 2020 and 2021, declared last year that they intended to nationalize the mines.
Since seizing power, the military regime has put pressure on international mining firms by raising taxes, rewriting contracts, enforcing stricter regulations, and generally shifting the focus from Western investors to Russian interests.
Africa’s second-largest producer of gold, Mali produces roughly 65 tons a year. The introduction of tariffs by U.S. President Donald Trump and broader geopolitical uncertainty, on the other hand, have contributed significantly to the continued strength of gold prices this year.
Nevertheless, Mali’s gold assets have not always been successful.
Sadiola Exploration Company, a joint venture of South Africa’s AngloGold Ashanti (AU.N), opens new tab and Canada’s IAMGOLD (IMG.TO), decided that low prices rendered operations unfeasible despite unexploited reserves, leading to the abandonment of the Yatela mine in Mali’s western Kayes region in 2016.
Similar to this, Australia’s Firefinch (N9F.MU), opens new tab, which had purchased shares from mining behemoths Barrick Mining (ABX.TO), opens new tab, and AngloGold Ashanti, abandoned the Morila mine in the southern Sikaso region in 2022, leaving behind what the government characterized as “significant environmental and financial liabilities” in a news release.
The new Society for Research and Exploitation of Mineral Resources of Mali (SEMOS) will resurrect the mines, the government stated in a statement, though it did not elaborate on how they will be managed or funded.
However, it is evident that as the government works to reopen Barrick’s mine complex, obtaining value from Yatela and Morila will not be so simple.
This month, a long-running conflict over ownership and taxes reached a significant turning point when the Canadian company’s Loulo-Gounkoto gold complex was brought under state administration.
