LONDON-listed Endeavour Mining and two other gold producers are to sign up to Mali’s controversial new mining code, said Reuters citing government officials.
The agreements cover Somika SA – 80% owned by Endeavour Mining and 20% by the Malian state – alongside Faboula Gold and Bagama Mining, Reuters said.
Finance Minister Alousseni Sanou said on state television that memorandums of understanding had been signed with the companies. Specific terms remain undisclosed.
Mali’s revised mining code, implemented in August 2023, significantly increases taxes and requires the state to acquire substantial stakes in mining operations. The legislation triggered bitter disputes with mining companies and contributed to a 23% decline in Mali’s gold output last year to 51 metric tons, the newswire said.
The three companies represent only a small fraction of Mali’s gold production. Faboula and Bagama commenced operations in 2021, each producing 500 kilograms annually, whilst Endeavour’s Kalana project operated through Somika has yet to begin production. All three operations have remained largely dormant since the mining code’s adoption.
Somika director Abdoul Aziz confirmed that mine construction “will begin six months after the signing of the agreement, and production will start 18 months later.”
The project has a projected 10-year lifespan with annual turnover of 135bn CFA francs (£193m), said Retuers. Faboula and Bagama each have five-year operational lifespans, generating 75bn and 50bn CFA francs respectively, it added. Each operation is expected to create approximately 2,000 jobs.
The breakthrough comes as Mali’s largest gold producer, Barrick Mining, remains locked in dispute with authorities following the suspension of its Loulo-Gounkoto operations in January.
The government blocked exports, detained executives, and seized three tons of bullion, prompting Barrick to launch arbitration proceedings at the World Bank’s International Centre for Settlement of Investment Disputes.
Mali ranks among Africa’s leading gold producers, though regulatory uncertainty has significantly dampened investment and output.
