Mali Breaks Ground on $130 Billion-a-Year Gold Refinery

Mali has initiated the construction of a new gold refinery with an expected annual output of 200 tonnes, worth about $130 billion. The plant aims to reclaim control over the country’s mineral resources and reduce dependence on foreign refining. Mali is making legislative changes to require local processing of gold, reflecting a broader trend in the Sahel. The initiative follows a shift in governance and international partnerships, particularly towards Russia.

Mali has officially launched the construction of a gold refinery, marking a significant step towards regaining authority over its mineral wealth. This development, reported by Reuters, is set to take place in Senu, a town just outside the capital city of Bamako. The refinery is a collaborative effort between the Yadran Group, a Russian industrial firm, and an unnamed Swiss company, reflecting international investments in the region’s resources.

Once operational, the refinery aims to produce 200 tonnes of gold annually, valuing around $130 billion, which would be a substantial increase from Mali’s current gold output. Notably, Mali ranks among the world’s largest gold producers, yet this has not translated into a significant influx of revenue for the government. In recent years, the tax income from international mining firms has fluctuated between $1 billion and $1.4 billion in 2024, which is quite low given the country’s per capita GDP sits below $900.

Control of the refinery will be shared, but Mali’s government is expected to hold a majority stake. Mali’s leadership is under Assimi Goita, a general who came to power through a coup in 2021. Although elections were initially planned, the National Transitional Council recently approved legislation extending Goita’s presidential term by five additional years, intensifying concerns about democratic processes in the nation.

Goita has been steering Mali away from its historical ties with France, moving towards closer relations with Russia. He emphasized the importance of the new refinery during the groundbreaking ceremony, suggesting that this initiative would help Mali break free from decades of reliance on foreign refining plants. He also indicated changes in legislation that would require mining companies to process gold domestically, aiming to keep more profits within the country’s economy.

This move aligns with trends in the Sahel region, where other countries like Guinea, Niger, and Burkina Faso have also adapted their mining codes to favor local processing, thereby enhancing their capture of commodity value. At the ceremony, Goita stated, “Since 1980, Mali’s gold has been exported for refining and sale to countries such as the United Arab Emirates, South Africa, and Switzerland. This deprives our country of substantial revenues that could be used for the development of its economy.”

Irek Salikhov, president of Yadran, stated that the refinery would not only serve Mali but also function as “a regional centre for processing gold extracted not only in Mali, but also in neighbouring countries like Burkina Faso.” In a related development, a Malian court placed Canadian mining company Barrick under state control for six months amid ongoing tax disputes with the government.

Mali’s groundbreaking for a new gold refinery signifies a pivotal shift in the management of the country’s mineral resources, aiming to boost local processing and keep economic benefits within its borders. The collaboration with international firms reflects a growing trend for nations in the Sahel to regain control over their wealth. Furthermore, this refinery is intended to elevate Mali’s gold output significantly while curtailing its reliance on foreign refineries, indicating a new direction for the country’s economic strategy.

Original Source: www.globalconstructionreview.com