Mali intends to partially lift its mining permit suspension by March 15, allowing application renewals and transitions while maintaining a suspension on new permits. Toubani Resources sees this as a step towards normalizing the industry, enhancing government collaboration, and focusing on the long-term Kobada Gold Project, which promises significant economic benefits. The updated mining code reflects a global trend of governments seeking increased resource revenue share.
The Republic of Mali’s government plans to partially lift its mining permit suspension by March 15, which has been in effect since November 2022. Toubani Resources (ASX:TRE) believes this move will provide stability in the mining industry by allowing applications for renewal and transitions between exploration and exploitation permits, though new mining permits will remain suspended.
Since the government’s moratorium aimed to audit mining operations and revise the 2019 Mining Code, the mining sector has experienced uncertainty. This suspension has been part of broader efforts to “clean up the mining register.”
Phil Russo, Managing Director of Toubani Resources, states that the lifting of the mining ban indicates a normalization in the industry. He emphasizes the importance of the processing body’s function for the advancement of projects from exploration to mining, viewing this as beneficial for all stakeholders involved.
The renewed application process will enhance collaboration between the government and mining companies, as potential license applicants now have clearer expectations of the approval procedures. Toubani focuses on the long-term prospects of its 2.2-million-ounce Kobada Gold Project rather than immediate changes.
Mali’s updated mining code aims to increase the state’s and local communities’ financial stakes in mining. This trend is not unique to Mali, as countries globally, including Indonesia and Australia, are evaluating their royalty structures and looking to gain larger shares of revenue from the mining sector.
Russo highlights the growing global theme of emerging economies desiring greater resource revenue. He notes the adjustment required by the industry to align with these evolving regulations, maintaining that Mali’s new code mirrors changes being made in various regions worldwide.
Recent agreements between mining companies like Allied Gold and B2Gold demonstrate how the sector is adjusting to Mali’s investment climate. Toubani Resources aims to finalize a partnership framework with the government to further develop Kobada, ensuring mutual support from both the community and the state.
The Kobada project is expected to deliver over $1.2 billion in economic benefits and create approximately 1,500 jobs during construction and over 1,000 during operations. Russo underscores the significant multiplier effects of this project for Mali’s economy, noting Kobada will rank as the nation’s fifth-largest gold mine, generating immediate benefits once operational.
An updated Definitive Feasibility Study shows Kobada has low capital intensity, estimating a startup cost of $216 million. At a gold price of $2,200 an ounce, the project’s net present value (NPV) is set at $635 million, with an internal rate of return (IRR) of 58%. Under optimistic conditions at $2,600, NPV rises to $897 million and IRR to 73%. Toubani is now working towards making Kobada shovel-ready by 2025.
The Mali government’s decision to partially lift the mining permit suspension marks a significant shift towards stability in the mining sector. This change not only improves regulatory clarity for companies like Toubani Resources but also aligns with a broader global trend of governments seeking larger shares from resource revenues. The Kobada Gold Project is positioned to provide substantial economic benefits and employment opportunities, reaffirming its potential contribution to Mali’s future.
Original Source: mining.com.au
