Mali’s new mining law is signed by Endeavour and two additional gold companies
Mali’s new mining code has been accepted by two other gold producers, and London-listed Endeavour Mining (EDV.L) has opened a new tab, according to government authorities.
When the legislation was put into effect in August 2023, it caused a great deal of friction with mining businesses and led to a 23% decrease in Mali’s gold production to 51 metric tons last year. The code increases taxes and aims to transfer large holdings in mining assets to the state.
Late on Monday, the new memorandum of understanding with Somika SA—which is 80% owned by Endeavour and 20% by the Malian state—was revealed on state television by the Minister of Mines and Finance, Alousseni Sanou. The deals’ terms were kept a secret.
With Faboula and Bagama starting production in 2021 with 500 kg each and the Somika-operated Kalana project still in the planning stages, the three firms only make up a small portion of Mali’s total gold production. Following the adoption of the mining code, all three have mainly been dormant.
“Work on the mine will start six months after the agreement is signed, and production will start eighteen months later,” stated Abdoul Aziz, director of Somika.
“Somika is a 10-year-old company with an annual revenue of 135 billion CFA francs ($238.9 million).” According to Sanou, Bagama and Faboula are expected to generate approximately 2,000 employment during their five-year lifespans, with respective turnovers of 50 billion and 75 billion CFA francs.
There was no response from Endeavour Mining. Comments from Bagama Mining and Faboula Gold were not available.
The largest gold miner in Mali, Barrick Mining (ABX.TO), has ceased operations in the Loulo-Gounkoto complex in mid-January after the government seized three tonnes of bullion, restricted its exports, and arrested some of its executives.
After initiating arbitration proceedings at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), the Canadian miner is still embroiled in disputes with the government.
Mali is one of the leading producers of gold in Africa, but output and investment have been negatively impacted by regulatory uncertainty.
