London-listed Kodal Minerals Plc has provided assurance that its lithium project in Mali will not be adversely affected by the recent legislative changes in the country. Mali, a West African nation, saw its military head of state, Assimi Goita, sign a new law on August 29. This law, among other provisions, increases the stake that the state can acquire in mining assets to 20% and allocates an additional 5% of shares for “national investors.” However, it’s important to note that this updated law does not apply to established gold operations in Mali, such as those operated by Barrick Gold Corp. and B2Gold Corp.
Kodal Minerals has received confirmation from Mali’s National Directorate of Geology and Mines that its license to mine the Bougouni lithium project will continue to be “administered in accordance” with the terms of the previous law. This announcement comes amidst the growing importance of lithium as a key battery metal, leading to a competitive race among mining heavyweights, battery manufacturers, and automakers.
Kodal Minerals is actively competing with Australia’s Leo Lithium Ltd. to be the first to bring Mali’s inaugural lithium mine into production. Kodal obtained its license in late 2021, while Leo Lithium was granted the right to develop the Goulamina asset in August 2019. The situation for Leo Lithium, however, remains uncertain, as the company suspended trading of its shares on September 19, pending an announcement regarding the application of the revised mining code to its project.
Mali’s mining industry has faced considerable challenges in recent years due to instability, including a jihadist insurgency that began in 2012 and two military coups over the past three years. The most recent coup in 2021 prompted the junta to request the departure of a 13,000-strong United Nations force and allowed the involvement of personnel from Russia’s Wagner mercenary group to combat Islamist militants.
In conclusion, Kodal Minerals’ lithium project in Mali appears to be shielded from the impacts of the new legislation, providing some stability in a country that has faced considerable challenges in its mining sector due to political and security issues.
1. Can Kodal Minerals proceed with its lithium project in Mali despite the new law?
Yes, Kodal Minerals has received confirmation that its license to mine the Bougouni lithium project in Mali will not be affected by the recent changes in legislation.
2. What is the significance of the increased state stake in mining assets?
The new law in Mali increases the state’s stake in mining assets to 20%, which represents a greater share of ownership in mining projects for the government.
3. How has the lithium boom impacted the global mining industry?
The increasing demand for lithium in the battery industry has sparked a competitive race among mining companies, battery manufacturers, and automakers to secure future lithium supplies, leading to a surge in lithium mining projects.
4. What is the current state of Mali’s mining industry?
Mali’s mining industry has faced instability in recent years due to political and security issues, including a jihadist insurgency and military coups. However, established gold operations have been exempted from the recent changes in mining legislation.
5. What challenges has Mali faced in recent years due to instability?
Mali has experienced significant instability, including a jihadist insurgency since 2012 and two military coups in the past three years. These challenges have had a notable impact on the country’s political and security landscape.