Mali Suspends Foreign Mining Permits Following Tragic Accident

Mali has halted the issuance of new mining permits to foreign companies due to a recent mining accident that resulted in over 40 deaths. The government is also banning artisanal mining permits for foreigners while it investigates the incident, aiming to prioritize safety and increase state benefits from its gold production amidst ongoing reforms in the mining sector.

Mali, recognized as Africa’s second-largest gold producer, has announced a suspension of new mining permits for foreign companies. This decision is a response to a tragic mining accident last month that resulted in the deaths of over 40 individuals, prompting the government to reassess its mining regulations and prioritize safety concerns. Furthermore, the issuance of artisanal mining permits to foreigners has been halted pending investigations into the incident, with punitive measures planned for accountable officials.

The fatal accident occurred at an illegal gold mine in the western Kayes region, specifically near Kéniéba, claiming at least 43 lives, predominantly women. The collapse took place at a previously abandoned site linked to a Chinese company, underscoring the inherent dangers of artisanal mining practices in Mali. This incident marked the country’s second deadly mining disaster within three weeks, following an earlier flooding that killed at least 10 people.

In light of these tragedies, the Malian government has seized equipment associated with small-scale mining activities and dismissed local authorities involved in the incidents. Additionally, the government is implementing stricter safety measures to avert further calamities. In 2020, following a military takeover, Mali’s leaders committed to reforming the mining sector to enhance state benefits from gold production.

An extensive audit had previously revealed significant tax evasion by multinational mining corporations, which were accused of shifting profits to low-tax jurisdictions. In response, President Goïta initiated revisions to the mining code, facilitating the renegotiation of contracts and unlocking over $1 billion in revenue for the country. This reform is pivotal as Mali is a major player in the gold production sector, just behind Ghana.

Mali’s economy heavily relies on gold mining, with the sector predominantly composed of foreign investors, including Chinese firms and notable international companies such as Barrick Gold and B2Gold Corp. Despite this, the mining sector has experienced conflicts with foreign entities and issues surrounding tax evasion. It is anticipated that the ongoing reforms could generate an additional $950 million annually, which is expected to contribute significantly to Mali’s national budget.

Mali has suspended the issuance of new mining permits for foreign companies following a tragic accident that led to numerous fatalities. This decision reflects a broader effort to enhance safety and increase state revenue from gold production through systematic reforms. As Mali seeks to navigate the challenges within its mining sector, the anticipated reforms are likely to yield substantial economic benefits, fostering sustainable growth and development.

Original Source: africa.businessinsider.com