By The Rio Times | Created at 2025-01-16 23:03:09 | Updated at 2025-01-21 00:47:33
4 days ago
In the Sahel region, gold mining accounts for over 90% of Mali’s exports, highlighting its critical economic role. However, military-led governments in Mali, Burkina Faso, and Niger are now seeking to reclaim control over these valuable resources.
Their goal is to reduce reliance on foreign companies. Barrick Gold, a major Canadian mining firm, temporarily suspended operations in Mali after the junta seized gold stockpiles worth approximately $200 million.
This incident reflects ongoing tensions between the Malian government and foreign investors following a new mining code that allows the state to increase its stake in mining ventures.
The junta’s push for greater ownership aims to ensure that mineral wealth benefits local populations rather than foreign entities. Mali’s new tax code, introduced in August 2023, eliminated tax breaks for international companies.
It also raised the maximum state stake in gold mines from 20% to 35%. The junta framed these changes as part of a sovereignty agenda, asserting that “gold should shine for Malians.”
Sahel’s Gold Rush: Military Juntas Seize Control Amid Foreign Tensions. (Photo Internet reproduction)However, this move has caused significant unrest among foreign investors, leading to the arrests of several employees from Barrick and other companies for non-compliance with the new regulations.
Challenges and Opportunities
The impact of these policies extends beyond corporate interests. Artisanal and small-scale mining (ASM) plays a vital role in the local economy, employing approximately 1.8 million people across the Sahel.
ASM represents about 50% of total gold production in Mali and surrounding countries. However, much of this activity occurs informally and without regulation, making it vulnerable to exploitation by organized crime and armed groups.
The Sahel faces escalating violence as terrorist organizations exploit the region’s instability. Reports indicate that jihadist groups have increasingly targeted mining sites, leading to a rise in violent incidents near ASM operations.
In Burkina Faso alone, the number of ASM sites attacked by extremist groups surged from 36 in 2018 to 189 in 2021. Despite its wealth in natural resources, the Sahel remains one of the poorest regions globally.
Political instability and corruption hinder effective governance and equitable distribution of wealth. Countries like Mali rank low on global development indices despite their mineral riches.
As foreign companies reconsider their investments amid rising risks and regulatory pressures, regional governments must navigate a fine line. They need to assert control over resources while fostering an environment conducive to investment.
The future of gold mining in the Sahel hinges on how well these governments manage their newfound authority while addressing the underlying issues of insecurity and governance.
Understanding this evolving landscape is crucial for investors and policymakers alike. The outcomes will shape not only the region’s economic future but also its stability and security in an increasingly volatile environment.
