Mali’s mining sector is undergoing significant changes, marked by both new opportunities and escalating tensions. The recent approval for Toubani Resources (formerly African Gold Group) to resume operations at its Kobada gold mine signals a shift in the country’s mining landscape, especially after a temporary moratorium on new permits.
Toubani Resources’ Kobada Gold Mine Reopens
Toubani Resources has been granted approval by the Malian government to restart operations at its Kobada gold mine, located near the Mali–Guinea border. This open-pit mine is projected to generate over $220 million annually, based on current gold prices, following an initial investment of $216 million.
The project is in compliance with Mali’s 2023 Mining Code, which introduces significant changes to the country’s mining framework. Notably, the new code increases the government’s free carried interest in mining projects from 10% to 30%. In addition to this, Toubani Resources has transferred 5% of the mine’s equity to local investors, ensuring that they retain 65% ownership. The renewal of Toubani’s mining license represents a partial lifting of Mali’s mining permit moratorium, which was first imposed in 2022 to allow for an audit and reforms to the legal and regulatory framework.
Dispute with Barrick Mining and Escalating Tensions
While Toubani’s mine moves forward, the situation is less straightforward for Barrick Mining (formerly Barrick Gold), which operates Mali’s largest mine, Loulo-Gounkoto. Barrick has been involved in a significant dispute with the Malian government over its refusal to adopt the new mining code. This standoff has resulted in severe tensions: several Barrick executives have been arrested, three tons of gold were seized by the government, and a warrant has been issued for Barrick’s CEO, Mark Bristow.
In an effort to resolve the situation, Barrick has proposed a $300 million settlement that would include the release of its employees and the return of the seized gold. Although the deal is reportedly imminent, it has not yet been finalized, leaving the future of Barrick’s operations in Mali uncertain.
Allied Gold Expands in Mali
While Barrick faces difficulties, Allied Gold has taken a different approach to expand its presence in Mali. The company, which operates the Sadiola mine, has sold 50% of its Malian entity to UAE-based Ambrosia Investment Holding for $500 million. The funds will be used to finance an expansion of the Sadiola mine, with production expected to increase from 170,000 ounces in 2023 to 400,000 ounces by 2028.
In addition to this deal, Allied Gold is in talks with Mali’s state-owned Sorem to explore further mining opportunities in the region, particularly in areas surrounding Sadiola, which remains one of the country’s most productive gold mines.
Conclusion: A Sector in Transition
Mali’s mining industry is at a crossroads, with significant changes on the horizon. Toubani Resources’ return to operation at Kobada marks a positive development, but the tensions surrounding Barrick’s refusal to comply with the new mining code highlight the challenges that foreign companies face in the country. Meanwhile, Allied Gold’s investment in Sadiola suggests that some companies remain committed to expanding their operations in Mali, despite the ongoing uncertainty. As Mali continues to reform its mining sector, it will be crucial for both the government and international investors to navigate these challenges to ensure the industry’s future growth and stability.