Mali plans to partially lift the suspension on mining permits by March 15, allowing renewed applications while maintaining some restrictions. Toubani Resources emphasizes the importance of this move for industry certainty and collaboration with the government. The Kobada Gold Project, with projected economic benefits exceeding US$1.2 billion, highlights the potential for growth and job creation in Mali’s mining sector amid broader global trends.
The Government of the Republic of Mali intends to partially lift the suspension of mining permits by March 15, thereby providing greater stability for the industry, as highlighted by West Africa-focused explorer Toubani Resources (ASX:TRE). The Ministry of Mines will permit renewals of exploration and exploitation permits, along with applications for transitions, while new permits and transfers of search permits will remain suspended.
This suspension has been imposed since November 2022, as the government undertook a comprehensive review of the 2019 Mining Code and audited mining operations. The initiative aims to enhance the transparency of the mining register and ensure orderly administration.
Phil Russo, Managing Director of Toubani Resources, emphasizes that the industry’s reinstatement of normal operations is crucial. He notes, “Integral to any mining industry is the normal course of business, just being able to get your licences approved… the industry likes certainty.” This newfound operational capability enables existing projects to progress from exploration to mining.
Russo suggests this move is poised to foster collaboration between the industry and government, allowing mining companies to understand the permitting process and timelines better. He stated, “The industry likes certainty and so to have that body moving forward again, is just going to be healthy for the engagement between industry and mining.”
The primary focus for Toubani Resources is the long-term development of its 2.2-million-ounce Kobada Gold Project. Mali’s revised mining code aims to increase the government and local community share of mining revenues by raising ownership interests in mining projects.
Similar movements are observed globally, as countries such as Indonesia reevaluate their royalty structures, while Australian states aim to protect their royalty frameworks. Russo points out, “You have to have a long-term view of Africa… emerging countries wanting a greater share of the pie, that’s nothing new.”
Mali’s approach mirrors trends seen in places like Burkina Faso and Indonesia, where governments seek to enhance their fiscal stakes in the mining sector. Recent partnerships between companies such as Allied Gold and the Mali government illustrate the industry’s adaptability to new investment conditions.
Toubani Resources is finalizing its investment framework with the Mali government, ensuring community and state support for the Kobada Project. Russo emphasizes the importance of local community approval: “For us in a country, we ask ourselves two questions: does the local community support mining in the project?” This collaborative spirit sets a foundation for successful project development.
Projected economic benefits from the Kobada Project exceed US$1.2 billion, generating approximately 1,500 construction jobs and over 1,000 operational jobs. Russo indicates that the project brings significant indirect benefits to the local economy. Once operational, Kobada will rank as Mali’s fifth largest gold mine.
Kobada is expected to produce at an all-in sustaining cost of US$1,004 per ounce, with an initial capital investment of US$216 million. An updated Definitive Feasibility Study indicates a post-tax net present value of US$635 million, with an internal rate of return of 58% at a US$2,200 gold price. As plans proceed, Toubani is committed to advancing the project towards shovel-ready status by 2025, aiming for a timely and efficient development process.
The partial lifting of the mining permit suspension in Mali marks a significant step towards normalizing the sector, facilitating application processes, and strengthening relationships between the mining industry and the government. Toubani Resources’ commitment to the Kobada Gold Project exemplifies the potential economic benefits for Mali, with strong community support and a favorable investment framework contributing to its future success. Global parallels further underline the widespread trend of emerging economies seeking increased shares from their mining sectors, reinforcing the need for adaptability within the industry.
Original Source: mining.com.au
