Mali Suspends Foreign Mining Permits in Wake of Deadly Accident

Mali has suspended the issuance of mining permits to foreign companies following a deadly mining accident that killed over 40 individuals. The government aims to reform the sector to enhance safety and increase state revenues, addressing issues of tax evasion and safety in the artisanal mining sector. Reforms are projected to significantly benefit the national economy.

Mali, recognized as Africa’s second largest gold producer, has made a significant decision to halt the issuance of new mining permits to foreign companies. This temporary suspension is in response to a catastrophic mining accident that resulted in the loss of over 40 lives, prompting an urgent review of the country’s mining regulations to enhance safety and state benefits from gold production.

The Council of Ministers of Mali announced the ban on artisanal mining permits for foreign entities while investigations into the tragic incident are underway. This measure follows a devastating collapse at an illegal gold mine in the Kayes region, which tragically resulted in the deaths of 43 individuals, predominantly women. Such incidents have raised alarms regarding the safety of artisanal mining practices in the region.

In addition to the suspension of permits, the government has taken corrective action by imposing sanctions on officials found liable for the recent disasters. The Kayes region’s mining collapse underscores the hazardous nature of artisanal activities, particularly at sites previously managed by foreign companies, prompting further scrutiny of mining operations.

Following the incident, Mali’s authorities took decisive steps, including seizing equipment used in unsafe small-scale mining practices and dismissing local officials linked to the accidents. The government aims to fortify safety regulations to mitigate the risk of future tragedies.

Mali’s military leadership, which took power in 2020, vowed to reform the mining sector, focusing on ensuring greater state returns from gold extraction. Audits identified significant tax evasion issues among multinational firms, which prompted President Goïta to announce revisions to the mining code to enhance revenue by renegotiating contracts.

As Africa’s second-largest gold producer, Mali plays a pivotal role in the continent’s economic landscape. Ghana remains at the forefront, producing 135 tonnes of gold from 2010 to 2024, while Mali follows closely. The mining sector predominantly comprises foreign investors, including notable companies such as Barrick Gold and B2Gold Corp, amidst ongoing challenges related to tax practices and corporate disputes.

The expected reforms are projected to yield an additional $950 million per year, significantly impacting Mali’s national budget. Economy Minister Alousseni Sanou indicated that these newfound revenues would assist in repaying portions of Mali’s internal and external debts, as well as acquiring necessary military equipment.

In summary, Mali’s suspension of new mining permits for foreign companies reflects a commitment to enhancing safety in its mining sector following a tragic accident. The government’s decision to impose reforms and audit tax practices aims to improve state benefits from gold production and ensure future safety measures. These changes are expected to generate significant additional revenue, underpinning Mali’s economic stability and development.

Original Source: africa.businessinsider.com