Mali Nationalises Gold Mine to Increase Control Over Resources
Junta-ruled Mali has completed the nationalisation of a gold mine previously owned by South African and Canadian firms, a move aimed at enhancing the country’s authority over its natural resources. The nationalisation of the Yatela mine in the western Kayes region marks the culmination of negotiations that started before the junta came to power following a 2020 coup.
State Acquisition of Shares
The Malian government, under Colonel Assimi Goita’s leadership, issued a decree approving the state’s acquisition of shares in the mining company that were previously held by South African company AngloGold Ashanti and Canada’s Iamgold. Prior to the nationalization, each firm held a 40-percent stake, while the Malian state owned the remaining 20 percent.
Insight: This move by Mali reflects a growing trend in Africa where countries seek to assert more control over their natural resources, often through state-led nationalization efforts. This trend can have various implications for the global mining industry and foreign investment in African countries.
Operations at the Yatela mine had been ongoing since 2001 but came to a halt in 2016 due to a drastic drop in gold prices. Factors like declining profitability and safety concerns were cited by the companies involved in the closure of the mine. Despite this, the Malian government believes that the mine’s reserves have not been fully depleted.
Financial Terms and Transfer of Ownership
As part of the nationalization deal, Iamgold and AngloGold agreed to transfer ownership of the mine to the Malian state for a nominal fee. Economy minister Alousseni Sanou stated that the Malian government will receive $36 million for the closure and rehabilitation of the mine, along with 2.5 billion CFA francs ($4.1 million) paid to the treasury.
Insight: The transfer of ownership to a state-owned entity signifies a shift towards greater state control over mining activities, which can impact how revenues are generated and distributed within the country. It also highlights the government’s efforts to maximize the benefits of its natural resources for the local population.
The Yatela mine will now be overseen by the Mali Mineral Resources Research and Development Corporation, a state entity established by the junta in 2022 to ensure that the country’s gold resources benefit all Malians. This move aligns with the junta’s commitment to bolstering national sovereignty amid challenges posed by jihadist violence and economic instability in Mali.
Emphasizing Sovereignty and Fair Revenue Distribution
Mali’s military leadership has emphasized the need for a fairer distribution of revenue from the foreign-dominated mining sector in the country. By reclaiming control over the Yatela mine and other mining assets, the junta aims to ensure that the wealth generated from gold production benefits the Malian population more equitably.
Insight: The assertion of national control over resource-rich assets like gold mines reflects a broader movement in African countries to reevaluate their relationships with foreign investors and prioritize local empowerment and economic development.
State television in Mali portrayed the sale of the Yatela mine as a pivotal moment in asserting Malian sovereignty over its resources. This narrative underscores the government’s commitment to leveraging its natural wealth for the benefit of its citizens.
Additional Insight: It would be interesting to monitor how the nationalization of the Yatela mine and other mining assets in Mali will impact the country’s economic performance, foreign investment climate, and social development initiatives in the coming years. The success or challenges faced in managing these resources could serve as a case study for other African nations grappling with similar issues.
