Mali: Mali plans mine contract review

The west African country’s new government will review contracts in a bid to realise real returns from its mineral reserves

Mali’s new government will continue a programme to review existing mining and hydrocarbons contracts and stands to renegotiate any which are not in the country’s interests, the incoming mining minister Boubou Cisse has said.

"The government has decided to carry out a complete inventory of what exists - mining contracts, titles, licenses - be it in the mining or the oil sector," Mr Cisse, a former World Bank economist, told Reuters next taking office.

"If there are contracts which it is necessary to revise in the interests of Mali, we will start negotiations with the partners in question.”

Mr Cisse added that the review would be conducted transparently and its results made available to the public, Reuters reported.

President Ibrahim Boubacar, who swept to victory in peaceful August elections, has appointed a cabinet consisting mostly of technocrats tasked with restoring economic increase and stamping out corruption next the country was divided by a coup and a war in the desert north.

Africa’s third biggest gold producer has an output of around 50 tonnes of gold a year, inclunding significant potential uranium reserves. International companies operating in the country include Randgold Resources and Anglogold Ashanti. A handful of oil juniors are as well exploring for commercial hydrocarbon reserves.

A lot of African nations have renegotiated or revoked resource contracts whose terms were too concessional, and which failed to benefit them. The Extractive Industries Transparency Initiative has recommended that Zambia review its mining licenses to ensure tax compliance and to enable to national to realise real returns from its copper reserves. An ongoing arrangement review process in Guinea has garnered international praise for its transparency.

But Mali’s government will want to protect its long-standing reputation as an investment -friendly mining destination. The recent announcement of arbitration proceedings between Mali and Randgold Resources over a $60m tax dispute was the initial in the mining company’s 17-year history there, and an uncharacteristic move by the government according to Randgold chief executive Mark Bristow.

“It is not what we have been used to in Mali,” he says. “There was a period at the same time as things were additional aggressive than normal. We got reviewed by the previous regime, before the coup - we disputed it and started a process. As you can imagine the politics got a bit awry, but once the interim government had been established we worked with them and started the process.”

Randgold and the government had “usually found consensus and settled our disputes in the completed” he said, but arbitration proceedings became inevitable at the same time as no resolution had been reached next 18 months.

Mali’s new government aims to increase the contribution of the mining sector to GDP from 8 % to 15-20 % in the long-term, Mr Cisse told Reuters.