Jurisdiction Spotlight: Has Mali’s mining sector turned a corner?

• The government of the Republic of Mali plans to partially lift the suspension of mining permits that have been in place since November 2022
• First Lithium MD Venkatesh Padala said it’s a confidence boost but the speed of these reforms still highlights uncertainty 
• Aggressive enforcement measures, increased taxation and diminished investor protections have made some foreign companies wary

Operating resources projects in Mali comes with its own set of challenges and risks but recent catalysts, including the partial lifts of suspensions of mining permits, suggests the country’s mining sector could be turning a corner.

The West African country announced the move in March, setting the scene for applications to be submitted to renew search and exploitation permits, transition from search to exploitation and to transfer exploitation permits.

Mali’s Ministry of Mines introduced the suspension in November 2022 to facilitate a comprehensive audit of mining operations and review the 2019 mining code that is aimed at enhancing transparency and address issues related to fair competition, job opportunities and corruption within the sector.

The country is currently ranked among the top three gold producers in Africa after Ghana and South Africa and is home to major gold players including Barrick Gold, Resolute Mining (ASX:RSG) and Endeavour Mining as well as small-cap exploration companies such as Toubani Resources (ASX:TRE), owner of the 2.2Moz Kobada gold project.

It is also set to secure the position of Africa’s second-biggest lithium producer in 2025, with output anticipated to represent 14% of the regional total according to Benchmark’s lithium forecast.

Revised mining code and changes following suspension lift

A new mining code was eventually proposed in 2023, granting the government a 10% stake in new mining projects with the option to purchase an additional 20% within the first two years of commercial production.

Mali’s state revenue from gold mining companies climbed 52.5% last year due to the increase in tax collection and dividend payments as a result.

For resources companies operating in the country, the suspension will mean more straightforward and direct dealings on licence applications and renewals, including those held by First Lithium (ASX:FL1).

FL1 is actively progressing through licence renewal processes at its Blakala lithium asset in Mali and received a letter from the National Director of Geology and Mines confirming that work can continue on its tenement package in the interim.

Blakala is one of only two Tier 1 priority lithium targets in the country, the other being the giant 211Mt at 1.37% Li2O Goulamina project, now owned by Ganfeng after Leo Lithium (ASX:LLL) transferred its management responsibility upon seeking to exit the asset.

A critical crossroads

While FLI1 managing director Venkatesh Padala acknowledged this was a great confidence booster, telling Stockhead Mali’s mining sector stands at a critical crossroads.

“On one hand, the government’s recent reforms signal a strategic push to extract greater national value from its abundant mineral resources,” he said.

“The revised mining code has expanded state ownership in mining ventures and initiatives to move up the value chain – such as developing lithium processing infrastructure – which demonstrate a strong desire to reshape the sector for long-term national benefit.

“However, the manner and speed of these reforms have introduced substantial uncertainty,” Padala added.

“Aggressive enforcement measures, increased taxation, and diminished investor protections have made some foreign companies wary.

“This has sparked concerns about the country’s investment climate and the predictability of its regulatory environment –factors that are essential for attracting and retaining capital in a high-risk sector like mining.”

Padala said whether Mali’s mining sector is truly “turning a corner” depends on how effectively the government can strike a balance between asserting national interests while also fostering a stable, transparent and investor-friendly framework.

“If Mali can refine its approach – perhaps through stakeholder dialogue, legal predictability, and institutional capacity-building – it may well unlock the sector’s full potential and set itself on a path to inclusive and sustainable economic growth,” he said.

“Otherwise, it risks undermining the very investments needed to realise those ambitions.”

FL1 is currently chasing an upgrade from explorer to developer this year with the release of a maiden resource for Blakala.

At Stockhead we tell it like it is. While First Lithium is a Stockhead advertiser, it did not sponsor this article.