Magazine article African Business

Mali's Golden Age

Magazine article African Business

Mali's Golden Age

Article excerpt

Until a few years ago, Mali in north-west Africa had little to show for itself except desert. Today, thanks to some feverish mining activity, it is fast catching up on Ghana as the sub-region's premier gold producer.

Mining in Africa is attracting companies from the four corners of the earth and the reasons are plain. First, many countries have the geological wealth; second, the political leadership in some African countries have been adopting mining codes which foreign investors find attractive; and third, the political prospects in some of Africa's potentially richest countries are looking more promising if not perfect.

Mali is a good talking point with 60 mining exploration permits granted in the Birimian areas of the country. Companies operating in Mali are truly multi-national with South Africa's Anglo American and Canada's IAMGOLD establishing the world-class Sadiola mine; and Randgold talking over the Syama mine from the Australian major BHP Minerals Mali Inc.

Randgold Resources was listed on the London Stock Exchange earlier this year and is now part of an international capital market. Randgold Resources is transforming Syama into a world-class mine as merited by its ore body, which is a resource of 10.5m ounces. It employs over 500 Malians on Syama. The mine is on track to produce over 270,000 ounces of gold a year by March 2000 at a cash cost of $210/ounce.

The US$300m Sadiola mining project is massive. It has a mineable reserve of 49.2m tonnes of ore at a grade of 2.86g/t of gold and contains 140 tonnes of gold. It is targeted to produce about 10 tonnes of gold a year for a 12-year-mine life from the oxide ore reserves.

But what is really special is the low cost of this operation. The total cash-operating cost including revenue and cost-related taxes averaged over the life of the mine is currently estimated at US$125/ounce of gold produced. The first gold from Sadiola was poured in December 1996 and the plant has now achieved full production.

Ashanti Goldfields of Ghana and Johannesburg Consolidated Investments (JCI) of South Africa are developing the formerly closed Kalana mine which has reserves of 4.3m tonnes grading 10g/t.

Other companies operating in Mali are Canada's Golden Star and France's BRGM. The major North American company Barrick Gold is also reported to be prospecting for gold in Mali and it is worth singling this company out because it is the biggest gold producer outside South Africa and it is a low-cost producer with cash costs of US$186/ounce for the second quarter this year. Anglo American produces about 8m ounces of gold a year and Barrick produced 3.1 m ounces in 1996.

According to Barrick, its mandate is to identity highly prospective geological targets that have been relatively unexplored and are in countries of political and legal stability. Such areas include the major gold-bearing belts of North and South America and some parts of Asia and West Africa.

Mining in Mali falls under the Mining Code 1970, which was revamped in 1991. It recognises three types of mining, artisanal, small-scale, and commercial or large-scale. In terms of exploration legislation, an exploration permit may only be cancelled for limited reasons and an exploration permit may not be mortgaged.

On the political front, a coup on 28 October last year was unsuccessful and Mali's second democratic elections since independence were held on 13 April 1997. Annulment of elections was formalised by the Mali Constitutional court on 26 April and the opposition boycotted the presidential elections, which were held on 11 May this year. Despite a low percentage poll, Alpha Oumar Konare was re-elected President.

So Mali appears to have the goods when it comes to mining and foreign investments are being made, but once again in Africa, the democracy dream is falling short in the real world of multi-party politics. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.