Mali Governement Mining Law May Deter Investment

image_pdfimage_print

Mali, West Africa

The ruling Junta in Mali have proposed a new Mining Law that would increase the governement’s share of mines within the country. Some miners think this will deter investment in the country.

Current producers in Mali, such as Barrick and K92 Mining feel the new law will not impact existing producers. 

 

 

.

Mali

Map of West Africa

 

 

.

Mali Governement Mining Law May Deter Investment in the country

 

.

Mali, West Africa

The ruling Junta in Mali have proposed a new Mining Law that would increase the governement’s share of mines within the country. Some miners think this will deter future investment in the country.

The code adopted by Mali’s Parliament would allow the state and local investors to take stakes as high as 35% in mining projects compared with 20% now. That’s a significant increase.

The new law become effective once signed by President Goita, although it is unclear when that will be. Until then there will be uncertainty.

Mining companies operating in Mali have said current producing mines, such as Anglogold Ashanti, Barrick, and B2Gold, feel the new law will not impact them, as they would be safeguarded by previous conventions, which could allow them to seek international arbitration if necessary.

Hummingbird are a UK listed company active in Mali, otherwise there are a number of junior ASX and TSX listed miners exploring in the country.

Sadly resource nationalism seems to be rising once again, with a government looking at revenues being earned by foreign companies mining commodities within their borders with covetous eyes.

Until a final announcement is made, this will cast a dark shadow over investment and potential investment into Mali. What I think will happen is that Barrick will go in and demand this law is not made retrospective, which will probably succeed one way or another.

At that point the law can only be applied to new entrants into the country, or those explorers ont yet into production, which will kill the investment case in those companies, in my view.

 

In conclusion, I think the large mining companies with existing production in Mali will not be effected by this new code, but clearly exploration companies looking to develop projects into production look likely to be, and that makes them very risky to invest in at this point.

I would expect their share prices to fall as a result of this news, so caution is advised, and perhaps a review of the portfolio?

.

.

=======

.

If you need clarification of any information contained in this note, or have any questions, I will be delighted to assist – Please email andrew@city-investors-circle.com

=======

.

City Investors Circle is based in the financial district in the City of London

We present interesting and exciting junior mining companies listed on the ASX and TSX stock exchanges to a group of city professionals, and private investors, all of whom are active investors with a mandate to invest in junior mining companies.

Our audience is selected and invited individually to ensure interest and relevance for the presenting company.

Meetings are non deal, small group, highly focused and engaged, with a lively Q and A to follow the main presentation.

We create awareness, and maintain interest in presenting companies by disseminating their future news to our entire investor group via email, social media, and our Monthly Review newsletter.

If you wish to present to our select group of active mining investors, please email andrew@city-investors-circle.com

.

=======

,

This website is not sponsored, we are truly independent, and will always remain so.

Companies featured here have either presented to the Circle in London, or have been selected because they are considered to have interesting projects, in good jurisdictions, run by an experienced management team.

All information used in the preparation of this communication has been compiled from publicly available sources that we believe to be accurate and reliable, however, we cannot, and do not, guarantee the accuracy or completeness of this.

These articles are for awareness and informational purposes only, and are not recommendations in any form.  Always consult an investment professional.

.

.

Disclosure

At the time of writing the author holds shares in any of the companies mentioned in thos article.

..