In a major turning point for its mining sector, Mali adopted a new mining code in 2023 that gives the state a stake of up to 35% in mining projects, compared with 20% previously. This ambitious reform, which is already being implemented at the future Kobada gold mine, is expected to generate up to $500 million in additional revenue per year for the country, consolidating Mali's position as one of Africa's leading gold producers.
Last Monday, the Malian government and Toubani Resources, a Canadian company that owns the Kobada gold project, signed a mining convention marking a key stage in the application of the new mining code. Under the new legislation, the Malian government will receive a free 10% stake in the project, as well as an option to acquire an additional 20% stake, in return for an investment the details of which are still unclear. In addition, national investors will be able to acquire a 5% stake, bringing the total national share to 35%.
This new partnership structure aims to maximise local economic benefits while ensuring an alignment of interests between the state, local communities and private investors. "We are delighted to consolidate our partnership with the State of Mali," said Phil Russo, Chief Executive Officer of Toubani Resources. "This legal framework ensures the sustainable and balanced development of the Kobada project for the benefit of all stakeholders."
The Kobada mine, located in south-west Mali, is one of the country's most promising mining projects. According to a feasibility study published in October 2024, it could produce 162,000 ounces of gold annually over an estimated life of 9.2 years, for a total of 1.49 million ounces (42 tonnes). The initial investment required to start up operations is estimated at $216 million.
Financial projections vary according to gold price scenarios. In an optimistic scenario, with gold trading at $3,000 an ounce, the mine's cumulative revenues could reach $4.47 billion over nine years. However, in a less favourable scenario with gold trading at $2200 an ounce, revenues would be estimated at $3.28 billion. In the latter case, mining royalties and other related taxes would enable Mali to capture around 14% of the mine's total revenues.
Although the 35% national interest in the mine does not translate directly into 35% of the revenues, this reform ensures a better redistribution of the profits from mining. In this way, the Malian authorities hope to make "gold shine for Malians", in line with their strategic vision of using natural resources to stimulate national economic development.
In addition to direct participation in mining projects, the new mining code also imposes a corporate income tax of 25% for the first five years of operation, rising to 30% thereafter. These tax measures are in addition to traditional mining royalties and contribute to a significant increase in government revenue.
For the Malian government, this reform represents much more than a legislative adjustment: it is a strategic lever for strengthening the country's economic sovereignty and financing essential infrastructure, particularly in the areas of health, education and transport.
Despite the significant advances made by this new legal framework, a number of challenges remain. The exact conditions under which the State will acquire the 25% non-gratuitous stake remain unclear, raising questions about Mali's ability to raise the necessary funds. In addition, some international players fear that these changes will increase investment risk and slow down the arrival of new mining projects in the country.
However, experts believe that Mali's exceptional mining potential, combined with prudent management of the new legal provisions, could attract more investors in the long term. "Transparency and regulatory stability will be crucial to maintaining investor confidence," says a Bamako-based analyst.
With this bold reform, Mali is affirming its determination to take full advantage of its mining wealth to support its economic development. If properly implemented, this strategy could transform the mining sector into a powerful engine for improving the living conditions of local populations and diversifying the national economy. It now remains to be seen how this new balance between public and private interests will play out on the ground.