Out-Law / Your Daily Need-To-Know
Mali’s decision to partially lift suspension on mining permits is a positive development, but also creates legal and corruption risks for businesses to navigate, according to experts.
Mali, a mineral rich country currently under military rule, put a pause on renewing, transferring and issuing mining permits in November 2022, before adopting a new mining code in August 2023 and partially lifting the suspension from 15 March 2025.
The new mining code introduced several changes, including increased taxes and localisation requirements, alongside enabling the government to take a 10% stake in mining projects with the option to buy an additional 20% within the first two years of a mine reaching commercial production and enabling a 5% stake to be ceded to local Malians.
Olivier Bustin, an expert in natural resources at Pinsent Masons, said: “The lift of the moratorium is a welcome development and mining companies can get back to business.”
“Whilst the moratorium did not stop existing mining activities in Mali, it did disrupt development and investment. Mining companies that have previously engaged in prospecting activities that identified good deposits can now look to convert their exploration permits into exploitation permits, which would enable them to start making money. This is a “win win” for the government and people of Mali as well as it will help create jobs and generate revenue for the state through taxes and through the interests that will be held by the state.”
“Similarly, deal-makers can now invest in and buy exploitation permits with more certainty as they can apply for the transfer of the rights, something that was not possible during the pause. These are positive developments but companies should carefully consider the new laws and how they may be implemented.”
Edward James, an expert in corporate crime at Pinsent Masons, said: “The move towards greater localisation is aligned with other mineral rich countries in Africa. Similar changes were touted in Botswana and Zambia late last year.”
“Although greater local benefit is certainly a good thing, the new law creates obvious corruption risks. By way of example, a company may be pressured into ceding the 5% stake to a politically connected relative of an official who has the power to approve or decline the renewal, transition or transfer of a right,” he said.
“Acceding to this pressure may provide the company with a short-term solution but it would open the door to long-term risk.”
Mali has large deposits of gold, iron ore, manganese, uranium and lithium, but international companies have faced challenges when dealing with the current government, creating uncertainty for miners and investors.
James said: “Whilst the global enforcement landscape is uncertain due to the developments in the US, companies should continue to sensibly manage compliance risks.”
“Taking short-cuts now could result in criminal liability and endless problems down the line. Regulatory risk could arise from various quarters with regulators like the French Parquet National Financier (PNF) continuing to play a more and more prominent role,” he said.
“A good example of this is the recent Areva / Orano Mining case where the company was pursued for historical corruption in relation to mining rights in Mongolia. Another practical problem that could arise is that once a company starts paying bribes, it is inherently difficult to stop.”
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