Mali plans to partially lift its mining permit suspension by March 15, allowing certain permit applications, while investment in the sector has been unstable due to earlier restrictions. Toubani Resources views this as a normalization of the industry. The company’s Kobada Gold Project aims to provide significant economic benefits, and the trend of increasing local participation in mining revenues is seen as a global development.
The Government of the Republic of Mali is set to partially lift its suspension on mining permits by March 15, 2023. This decision is viewed positively by West African explorer Toubani Resources, as it adds certainty to the mining industry. The Ministry of Mines will allow applications for the renewal of search and exploitation permits, conversions from search to exploitation, and transfers of existing permits, though new permit allocations remain on hold.
The moratorium, introduced in November 2022, was established while the government conducted an audit of mining operations and reviewed the 2019 Mining Code. This was part of a larger initiative to “clean up the mining register.” Investment in Mali’s mining sector has experienced uncertainty due to these restrictions.
Toubani Resources’ Managing Director, Phil Russo, emphasizes that the resumption of mining permits marks a normalization of industry operations. He states, “Integral to any mining industry is the normal course of business, just being able to get your licenses approved… .” This progression is deemed beneficial for existing projects transitioning from exploration to mining.
Russo also notes that with a clear process for permitting documents, cooperation between industry and government will enhance. He points out that “The industry likes certainty… so having that body moving forward again is just going to be healthy for the engagement between industry and mining.”
The company’s primary focus is on the Kobada Gold Project, which holds significant long-term potential. Mali’s updated mining code aims to increase government and local community participation in mining revenues. This trend towards enhancing local benefits is noted not to be limited to Mali, as nations globally adjust their mining royalty frameworks.
For instance, Indonesia is reevaluating its royalty structures, and certain Australian states are reinforcing their royalty policies. Russo explains that emerging countries seek a larger share of mining profits, indicating that this is a global phenomenon, stating, “We think that’s going to be a growing theme across the world over…”
Recent agreements involving multiple companies demonstrate the adaptation of the sector under the renewed investment framework in Mali. Toubani is finalizing its investment arrangements to ensure the sustainability of the Kobada Project through a collaborative partnership approach.
Support from both the local community and the Mali government for the Kobada Project is vital. Russo expresses the importance of these supports: “For us in a country, we ask ourselves two questions: does the local community support mining in the project, and does the state government support the project?” Positive responses to these questions will facilitate further discussions.
The Kobada Project is projected to generate over $1.2 billion in direct economic benefits and is expected to produce approximately 1,500 jobs during its construction phase and over 1,000 during its operational lifetime. Russo highlights that the project’s significance is substantial, stating, “the flow-on effects are enormous, and it’s important to state that the significance of Kobada is really meaningful.”
Once operational, Kobada will rank as Mali’s fifth-largest gold mine. An updated Definitive Feasibility Study indicates its low capital intensity with an initial cost of $216 million and a post-tax net present value (NPV) of $635 million at a gold price of $2,200 per ounce. With higher gold prices factored in, the NPV is projected to rise significantly.
Toubani aims to prepare the Kobada Project for construction readiness by 2025, promoting its role as a robust contributor to Mali’s economy.
In conclusion, the partial lifting of the mining permit suspension by the Republic of Mali is a pivotal step towards reviving the country’s mining industry. This move is expected to enhance operational certainty within the sector, fostering collaboration between the government and mining companies. The Kobada Gold Project exemplifies the potential economic benefits and job creation that can result from effective mining operations. As the global trend towards increased local sharing of mining revenues continues, Mali’s updated mining code reflects a broader adjustment that aligns with initiatives in other nations.
Original Source: mining.com.au
