Mali suspends new mining permits to foreign companies following a fatal accident that left over 40 dead. This decision is part of broader reforms aimed at increasing state revenue from gold mining and improving safety protocols. The government seeks to address past tax evasion issues and enhance benefits from the mining sector.
Mali, recognized as Africa’s second-largest gold producer, has halted the issuance of new mining permits to foreign companies in light of a tragic mining accident that resulted in over 40 fatalities. The government’s decision stems from an incident last month involving an illegal mine collapse near Kéniéba, prompting the administration to reassess mining guidelines and enhance safety protocols. The Council of Ministers has additionally suspended artisanal mining permits to foreigners during the factual investigations of the incident.
The accident in the Kayes region occurred at a site previously operated by a Chinese company, underscoring the dangers associated with artisanal mining practices. Tragically, this incident represents Mali’s second significant mining disaster within a three-week span. In response to these tragedies, the government is taking a firm stance, enforcing sanctions against implicated officials and confiscating equipment linked to small-scale mining operations.
In 2020, Mali’s military government committed to reforming its mining sector to enhance government revenue from gold production. An audit unveiled considerable tax evasion by multinational corporations exploiting tax strategies to funnel profits into low-tax jurisdictions. To address this, President Goïta has initiated a revision of the mining code, leading to contract renegotiations and the projection of over $1 billion in revenue influx.
Mali’s economy heavily depends on its mining sector, which is predominantly influenced by foreign investors such as Barrick Gold and B2Gold Corp, among others. The country, producing around 60 tonnes of gold annually, significantly contributes to its economic framework. The anticipated reforms are expected to raise an additional $950 million yearly, which would constitute approximately 20% of Mali’s national budget, supporting vital resources for debt repayment and military procurement.
Mali’s decision to suspend foreign mining permits is a direct reaction to severe safety concerns following tragic mining accidents. The reforms in the mining sector aim to improve state revenues from gold production while ensuring better oversight and safety measures. Enhanced regulations are poised to bolster Mali’s economy and provide significant funding to address its pressing financial obligations.
Original Source: africa.businessinsider.com
