B2GOLD CEO Clive Johnson remains upbeat about the group’s Fekola mine operations in Mali despite a delay in permitting for the new Fekola regional expansion caused by the introduction of a new mining code.
Interviewed on the sidelines of the Mining Indaba being held in Cape Town, Johnson said the Mali government delayed granting all new mining permits while doing an audit of the country’s mining industry in preparation for the introduction of the 2023 mining code.
B2Gold’s existing Fekola operation – which will produce 580,000 to 610,000 ounces of gold in the year to end-December – is the group’s flagship gold mine. Initial operations in the Fekola regional expansion are forecast to add 80,000 to 100,000 oz annually to output.
“Fekola’s existing financial structure is ‘grandfathered'” to the 2012 mining code but the 2023 code is different with higher taxes and the government looking for a higher equity interest in the assets. The Fekola regional operations at this stage are exploration licences and they are not going to be ‘grandfathered’ back to the 2012 mining code”.
“We don’t really understand the implications of the new code yet because the government is still working on it. We are hoping to have the answers in the next couple of months. There’s a lot of support from the government.”
Mali currently appears to be going through a period of political instability with frequent changes of government while also dealing with an Islamist insurrection in the north of the country. Asked if he was concerned about this situation given the importance of Fekola to B2Gold Johnson replied “The good part about that is Fekola is also so important to the Mali government as well.
“Fekola’s contribution to Mali’s gross national product is huge – it’s around 10%. We are confident that the current government of Mali wants gold mining and they want more of it.
“The question is what the economic split will be. The people of Mali currently get just over 50% of the benefits from Fekola and I frankly think that’s a great deal.
“The new mining code calls for 30% government ownership in the mines compared with 20% currently but they are supposed to buy the extra 10%.”