Investment Prospects in Mali's Gold Sector Amid Regulatory Upheaval

Mali, Africa's second-largest gold producer, is facing an investment dilemma.

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The country's militaryled government has implemented a new mining law that raises taxes and increases state and local ownership stakes in gold projects. While the government sees this as a necessary step to ensure a fairer share of profits, mining companies view the move as overly aggressive and detrimental to investment. The result is an uneasy standoff that could reshape Mali's gold industry for years to come.

A Shift in the Regulatory Landscape

Under the new mining law, companies must divest 35% of new projects to Malian investors, up from 20% previously. Royalty taxes have also been increased from around 6% to 10.5%. This shift has significantly altered the economic viability of new projects. According to mining executives, the higher tax burden and loss of equity control make Mali less attractive than neighboring gold-rich countries like Guinea, Côte d'Ivoire, and Senegal.

Gold accounted for 80% of Mali's exports in 2023, and with gold prices at record highs, the government sees this as an opportune moment to maximize revenues. However, major players in the sector, including Barrick Gold and Resolute Mining, argue that these new regulations are too harsh and will deter future investments.