Gold mining sector soars as state revenue hits record high. The surge in state revenue can be attributed to heightened tax revenues.
Mali’s gold mining revenue experienced a remarkable 35% year-on-year rise in 2022, reaching a record 763.7 billion CFA francs (USD 1.3 billion), according to a Ministry official. The surge in state revenue can be attributed to heightened tax revenues, demonstrating the mining sector’s pivotal role in the country’s economy.
Prominent mining companies such as Barrick Gold, B2GOLD, Resolute Mining, and Hummingbird Resources have played a significant part in shaping Mali’s status as one of Africa’s top gold producers.
Gold mining – Economic significance
Gold mining stands as a pillar of Mali’s economy, accounting for approximately 9% of its gross domestic product in both 2021 and 2022. Moreover, it contributed over half of the total tax revenues in the country during the previous year, showcasing the sector’s substantial financial impact.
Impetus behind revenue growth
The upsurge in revenue was primarily driven by the improved performance of collection services, which encompass tax services, customs, and estate services. The efforts of these departments, coupled with the cessation of certain tax exemptions in 2021, substantially bolstered the country’s revenue-generating capacity.
Proposed changes in mining law
Currently, the military-led government is engaging in negotiations with gold mining companies to enact potential amendments to its mining law. The proposed changes aim to increase state and private Malian interests in new mining projects from the present 20% to 35%. This move follows the findings of an internal audit that underscored the need for more equitable profit-sharing and a reduction in tax incentives.
According to Reuters, the revised law also includes provisions to encourage mining companies to hire more local employees for top positions, promote technology and skills transfer, and place a cap on expatriate salary costs.
Industrial gold output and future outlook
Mali’s industrial gold output for 2022 reached an impressive 66.2 tons, marking a notable 4% increase from the previous year. As the country continues to make strides in maximizing its mining sector’s potential, the future looks promising, with the prospect of further growth and development on the horizon.
The remarkable revenue surge in 2022, driven by increased tax revenues and the efforts of major mining companies, underscores the pivotal role gold mining plays in shaping Mali’s economic prosperity. As discussions regarding amendments to the mining law progress, Mali appears committed to fostering a conducive environment for mining operations and ensuring equitable benefits for both state and private interests.
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