New local ownership requirements for mining companies in Mali

The implementing rules under the Local Content Act 2023 have been introduced and recently came into force. Similar to recent developments in other African countries, the new law and regulatory requirements are aimed at enhancing participation by Malian citizens in ownership, supply of goods and services, and employment in the mining industry.

The new decree provides that any foreign subcontractor providing services to a mining operating company is now required to have 35% Malian ownership. The same requirement also applies to any foreign supplier providing services to a mining operating company.

Olivier Bustin of Pinsent Masons, who advises on energy and natural resources projects in the region, said that foreign investors wishing to invest in the mining sector in Mali as subcontractors, services providers or suppliers must create a company under Malian law registered with the Trade and Personal Property Credit Registry (RCCM), and meet the 35% local ownership requirement.

“The new requirements are a positive development for the sector, as they are expected to strengthen the participation of local companies and workforce throughout the mining value chain in Mali. Ultimately, this will have a social and economic impact on the people living in Mali,” he said.

However, he added, certain provisions of the new rules need to be further clarified or implemented. For example, as part of the local content policy in Mali, an online platform called Plateforme de Gestion du Contenu Local ou base de données (‘the platform’) has been created. It will serve as a portal for information, networking, and monitoring activities in the mining sector, and will be overseen by the Sécretariat Permanent du Contenu Local (SPCL).

All calls for tenders relating to mining activities are required to be published on the platform. Any contractor, supplier, subcontractor, or service provider must now publish all of their contracts relating to mining projects on the platform too. An exception to the latter point may be made with the SPCL's authorisation.

According to Bustin, the platform has not yet been implemented, and the organisation and operation of the platform are yet to be clarified in the guidelines of the Cadre de Concertation du Contenu Local (CCCL). Other details that are still being finalised by the Ministry of Mines and the Ministry of Finance include the registration fees, annual contributions, and the fines relating to the companies registered with the platform.

Mining operators face additional compliance requirements under the new local content regime. For example, they must set up a local content plan. The plan should include details such as the shareholding by Malian nationals in the share capital of a foreign company, the promotion of Malian companies, employment, and training, and the use of local goods and services. This plan must be updated each year.  

Additionally, a goods and services supply content plan, which covers an initial period of three years, is also required of mining operators. They must submit the supply content plan to the SPCL for approval by 31 March each year. Malian companies must take priority in supplies of goods and services related to mining activities, with article 1 of the Local Content Act defining a local (Malian) company as “an entity or group of entities with legal personality under Malian law, whose share capital is owned by at least fifty-one percent (51%) of individuals of Malian nationality or legal entities under Malian law, and whose beneficial owner is Malian”.

When no Malian company is in a position to supply the goods and services, foreign companies may do so under comparable cost and planning conditions and in accordance with international standards applicable in the mining industry. However, the new decree does not specify how to prove the inability of a Malian company to supply goods and services, allowing a foreign company to do so. This point must be clarified by the relevant authorities.

Another important change under the local content law, said Bustin, is that Malian personnel now have exclusive priority for employment and training in any project directly or indirectly related to a mining project.

Similarly, any project launched on a national scale must be subject to two calls for tenders reserved exclusively for Malian nationals. If the calls for tender are unsuccessful, the position will then be opened up internationally. Any foreign contractor, subcontractor, service provider or supplier who has occupied a national post filled following an international call for tenders must submit a succession plan to the SPCL for approval. This succession plan sets out the maximum period during which the contractor, subcontractor, service provider or supplier will be accompanied by Malian employees who are trained to the level of competence required to gradually replace non-national employees.

In addition, the new rules set out that some mining activities must be exclusively reserved for local companies, and require any mining company carrying out mining activities to take out insurance policies with insurance companies licensed in Mali, as well as to set up a transfer of technology, competence, and research and development programme.