Tiemoko Diallo Bamako

Mali would announce the cancellation of some mining licences in the coming weeks once it had reviewed permits signed by previous governments, Mines Minister Boubou Cisse said yesterday.

He said his department had begun an inventory of research and exploration licences, adding that contracts would be cancelled if they were found not to be compliant with the mining code.

Mali’s nine mines that were currently in production would also be audited, he said.

“The objective is to clean up the mining sector,” Cisse said.

“A lot of licences have been distributed in a disorderly manner, without any respect of [our] mining code. It has created disputes, and many of them are in court today.”

Mali is Africa’s third-biggest gold producer, exceeded only by South Africa and Ghana, with operations by foreign mining companies including AngloGold Ashanti, Randgold Resources, IamGold and Endeavour.

Cisse said the review for now targeted only research and exploration licences and not those for mines already in production.

“The inventory has begun. Later we will hire a consultant to dig deeper,” he said of the planned audit.

“What is important for us is not only a financial audit; we also want to look at technical, social and environmental aspects.”

Cisse, a 40-year-old former World Bank economist, was named last year as mines minister following the election of President Ibrahim Boubacar Keita.

The new government needs to restore economic growth, stamp out corruption and rebuild the country following a rebellion in the north, a military coup and the occupation of the northern half of the country by Islamist militants.

Gold is the country’s biggest foreign export earner, accounting for 75 percent of export receipts and 25 percent of gross domestic product.

Cisse said the audit would also enable the government to understand why there were wide differences in the production costs of different firms operating mines in the same area.

“Sometimes in the same zone one producer can report production cost at $1 300 (R14 270) an ounce and the other at $790 an ounce, while separated by only a few kilometres. There is something we do not understand.

“This is important for us, because if the cost is lower than $1 300 an ounce, it will enable us to make tax adjustments and generate more revenue.”

Mali’s gold production is expected to dip slightly to 50 tons this year as AngloGold Ashanti and Iamgold close their Yatela mine. Gold prices have fallen from a record $1 920.30 an ounce in 2011 to below $1 300, prompting mining companies to suspend projects. – Reuters