Mali’s mining sector, long an economic cornerstone, is undergoing significant reforms aimed at strengthening the country’s sovereignty and promoting more inclusive development. Amid tensions, such as the recent seizure of Barrick’s gold stocks by the military government, questions about economic control and mining governance are more pressing than ever.
Gold remains the lifeblood of Mali’s economy. In 2023, the mining sector contributed 644 billion CFA (around US$1 billion) to the national budget, which represented 21.5% of the total budget. Gold production reached 70 tonnes, and while the mining sector continues to fuel the economy, it remains a largely capital-intensive industry with limited employment generation.
The sector’s contribution to the economy is evident, with extractive industries accounting for 6.3% of Mali’s GDP in 2023, an increase from 5.9% in 2022. However, while the sector’s economic impact is clear, its benefits are not always equally distributed. Mali’s government is keen to address these issues with new reforms.
A significant development is the 2023 mining code, designed to increase Mali’s gains from the mining sector while boosting local development and national sovereignty. A major focus of the new code is “local content,” which prioritises the participation of Malian businesses and workers in the extractive industry. Mining operators are now required to contribute 0.75% of their quarterly revenue to a local development fund, fostering direct benefits for local communities.
Additionally, the Malian government aims to increase its stake in mining projects. Under the new law, the state will hold an initial 10% share in any mining project, with the potential for an additional 20% during early production stages. The Malian private sector is also set to benefit with 5% of mining shares, potentially bringing the total Malian stake to 35%, a significant increase from the previous 20%.
These changes are expected to generate an additional 500 billion CFA (US$784 million) for the national budget, strengthening Mali’s financial position. To further optimise resource extraction, the mining code also revises the duration and terms for granting mining licenses. Large mines can now receive renewable permits for 12 years, while exploration licenses have been extended to nine years.
Despite these positive changes, challenges remain. Artisanal gold mining, prevalent in Mali, has significant environmental impacts, including deforestation, soil degradation, and pollution. The rise of informal mining operations complicates efforts to collect accurate data on the sector’s overall impact. Additionally, security in mining zones, land management, and the provision of essential services such as healthcare and education remain key concerns.
Malian authorities have responded to these challenges by developing a community development policy aimed at creating economic opportunities and mitigating the negative effects of mining, including its environmental toll. However, securing the necessary financing for these projects and ensuring the safety of mining zones will be critical for the success of these reforms.
While Mali’s mining sector is set for transformation, balancing economic growth, environmental sustainability, and local development will require ongoing effort and adaptation to emerging challenges. The country’s new mining code represents a bold step toward achieving these goals, but the path forward remains complex.
