Mali to Partially Lift Mining Permit Suspension by March 15

Mali’s government will partially lift the mining permit suspension by 15 March, allowing renewals and transitions of permits while new permits remain suspended. Toubani Resources views this positively for project approvals. The updated mining code seeks to increase government revenue, aligning with global trends. Toubani is finalizing its investment framework for the Kobada Gold Project, expected to create significant economic benefits and jobs.

The Government of Mali has announced a partial lifting of the suspension on mining permits by 15 March, which is expected to provide greater stability for the mining sector. This decision has been welcomed by West Africa-focused explorer Toubani Resources, which believes it will facilitate crucial project approvals. Among the allowances are the renewals of search and exploitation permits, and transitions from search to exploitation permits, while new permit applications will still remain on hold.

Initially imposed by the Ministry of Mines in November 2022, the suspension aimed to audit mining operations and reassess the 2019 Mining Code. Toubani Resources’ Managing Director Phil Russo expressed optimism regarding the lifting, stating that it is vital for the normal operations of the mining industry and indicates that vital processes that have not functioned effectively for years are now being revived.

Russo further highlighted that the re-establishment of permit approvals will aid projects in progressing from exploration to mining phases. The decision is viewed as a positive step toward revitalizing activity within the mining sector, signaling healthier industry dynamics in Mali.

Mali’s revised mining code reflects a trend for increased government revenue from mining activities. Similar trends are observed globally, as other nations like Indonesia and Queensland modify their royalty structures to secure a greater share. Russo noted, “You have to have a long-term view of Africa… wanting a greater share of the pie, that’s nothing new.”

Several mining companies, including Allied Gold, B2Gold, and Robex Resources, have reached agreements with the Malian government. Toubani Resources is in the process of finalizing its investment framework specifically for the Kobada Gold Project, a significant venture expected to generate more than $1.2 billion in economic benefits for Mali.

The Kobada Gold Project is anticipated to create around 1,500 jobs during its construction phase and over 1,000 jobs once operational. Russo emphasized the necessity of support from both local communities and the government to ensure project success, stating, “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?”

Projected to become Mali’s fifth-largest gold mine, Kobada is estimated to require an initial capital investment of $216 million. A recent Definitive Feasibility Study has projected its financial outlook, noting a post-tax net present value of $635 million at a gold price of $2,200 per ounce, with a significant internal rate of return (IRR) of 58% under the same price condition.

Furthermore, the project aims to be shovel-ready by 2025, with an all-in sustaining cost estimated at $1,004 per ounce. Russo stated, “Once built… it’s going to be spitting off benefits for them immediately.”

Mali is recognized as Africa’s third-largest gold producer, with the mining industry generating approximately 8% of the national GDP and contributing to nearly 75% of export revenues. The anticipated lifting of the mining permit suspension is expected to enhance investor confidence and spur new developmental projects in the country.

The partial lifting of the mining permit suspension in Mali represents a significant step towards stability in the mining sector. This move is expected to foster project approvals and progress within the industry, facilitating the advancement of key projects such as the Kobada Gold Project. As Mali continues to position itself as a leading player in the gold market and adapt its mining regulations to global trends, the outlook for growth and investment in the region appears promising.

Original Source: colitco.com