Mali’s Mining Sector: A New Chapter

In a significant development, three prominent gold producers—among them the London-listed Endeavour Mining—have agreed to comply with Mali’s controversial new mining code. This announcement, made by Malian government officials, signifies a turning point after months of uncertainty that have shaken the foundations of the country’s mining industry.

During a televised address late Monday, Mali’s Finance Minister Alousseni Sanou and Minister of Mines expounded on the details. The firms—Somika SA, which is predominantly owned by Endeavour Mining, along with Faboula Gold and Bagama Mining—have signed a memorandum of understanding. This memorandum marks their commitment to operating under the revised mining code. Although the specific terms of the agreements remain undisclosed, as noted by Reuters, it is clear that these changes are aimed at reshaping the landscape of Mali’s mining sector.

New Code: A Move for Greater Control and Revenue

In recent years, Mali’s transitional military-led government has sought to exert greater control over the mining industry, driven by aspirations for resource sovereignty and economic development. The revised mining code, instituted in August 2023, is a testament to these ambitions. By increasing taxes and elevating the government’s share in mining ventures, the code aims to boost state revenues significantly.

However, this initiative has not been without its challenges. The new regulations sparked a widespread backlash among miners, contributing to a 23% decline in gold production last year, which plummeted to 51 metric tons. This raises an important question: what impact will these regulatory changes have on the long-term viability of the sector?

While the three companies in question represent only a small fraction of Mali’s total gold output, their willingness to embrace compliance will undoubtedly play a crucial role in shaping the future. Faboula Gold and Bagama Mining, which commenced production in 2021 with modest outputs, and Somika’s Kalana project, still in the development phase, have seen little activity since the code’s introduction.

Somika’s Director, Abdoul Aziz, expressed optimism regarding this new chapter. He stated that construction on the mine would commence within six months of signing the agreement, with production expected to kick off 18 months post-construction. This timeline, while ambitious, offers a glimmer of hope for the industry’s revival.

Minister Sanou projected that Somika’s mine would have a lifespan of ten years and generate upwards of 135 billion CFA francs (approximately $238.9 million) annually. Faboula Gold and Bagama Mining also have enticing forecasts, with projected annual revenues of 75 billion and 50 billion CFA francs, respectively. Each operation is expected to create nearly 2,000 jobs, a significant boost for local employment.

On the flip side, Mali’s largest gold producer, Barrick Gold, finds itself entangled in a legal dispute with the government. Tensions escalated dramatically in January 2025 when Barrick halted operations at its Loulo-Gounkoto complex after the Malian government seized gold stocks stored on-site. This mining complex, operated by a subsidiary of Barrick, has been a cornerstone of Mali’s gold output—accounting for about 15% of the company’s total production.

In the wake of these tensions, Barrick initiated arbitration proceedings with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). As the situation unfolds, one can’t help but ponder the implications of such conflicts: will they deter future investments in the sector, or will they catalyze a more robust regulatory environment?

Just last month, Mali made headlines again by officially taking over the Yatela and Morila gold mines, which had been abandoned by their foreign owners. While Mali remains a key player in Africa’s gold market, the prevailing regulatory uncertainties continue to dampen investor confidence and hinder production efforts.

The story of Mali’s mining sector is a complex tapestry woven with ambition, regulation, and unpredictability. How this will unfold remains to be seen, but one cannot ignore the potential for either remarkable growth or significant setbacks. The hope is that through collaboration and engagement, all stakeholders can navigate this new terrain toward a brighter future.