Tanks containing mud from which gold will be extracted at a mining site operated by Endeavour Mining Corp. in Burkina Faso.ANNE MIMAULT/Reuters
London-listed Endeavour Mining EDV-T and two other gold producers have agreed to migrate to Mali’s new mining code, government officials said.
The code, which raises taxes and seeks to hand over big stakes in mining assets to the state, sparked bitter disputes with mining companies after it was implemented in August 2023, helping drive Mali’s gold output down 23% last year to 51 metric tons.
Finance Minister Alousseni Sanou and the Minister of Mines announced the new memorandum of understanding with Somika SA – which is 80%-owned by Endeavour and 20% by the Malian state – Faboula Gold and Bagama Mining on state television late Monday. No terms of the deals were disclosed.
The three companies account for only a fraction of Mali’s gold output, with Faboula and Bagama launching output in 2021 with 500 kg each and the Kalana project operated by Somika yet to start production. All three have been largely inactive since the mining code was adopted.
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Somika director Abdoul Aziz said construction of the company’s mine “will begin six months after the signing of the agreement, and production will start 18 months later.”
“Somika has a lifespan of 10 years and a turnover of 135 billion CFA francs ($238.9 million) annually. Bagama and Faboula each have five-year lifespans with turnovers of 50 billion and 75 billion CFA francs,” Sanou said, adding that each company is expected to create around 2,000 jobs.
Endeavor Mining declined to comment. Faboula Gold and Bagama Mining could not be reached for comment.
Mali’s biggest gold miner, Barrick Mining ABX-T, suspended operations in the Loulo-Gounkoto complex in mid-January after the government blocked its exports, detained some of its executives, and seized three tonnes of bullion.
The Canadian miner remains locked in dispute with the government, having since launched arbitration proceedings at the World Bank’s International Centre for Settlement of Investment Disputes.
Mali is one of Africa’s top gold producers, but regulatory uncertainty has weighed on investment and output.
($1 = 565.0000 CFA francs)