2024 – The key aspects of the Implementing Decree – Mali
Decree no. 2024-0396/PT-RM, dated 09 July 2024, setting out the conditions and procedures for applying Law no. 2023-040, dated 29 August 2023, on the mining code in the republic of Mali (the “Implementing Decree”), adopted by the Council of Ministers, marks a significant move in the country’s approach to regulating its mining sector. The key aspects of the Implementing Decree introduce crucial reforms aimed at optimizing the mining industry’s contribution to Mali’s economy on a broader scale, reflecting the desire of African nations to take control of their natural resources.
One of the primary goals of the Implementing Decree is to create a more productive mining industry. The government seeks to attract more investment while ensuring that mining activities are conducted responsibly and sustainably. To this end, the Implementing Decree provides greater clarity regarding the application, holding, transfer and cancellation of mining titles and exploration permits. The purpose of this restructuring is to simplify the process of acquiring and managing mining rights, making it easier for companies to navigate the regulatory landscape. For instance, the Implementing Decree prioritizes granting exploration permit to the state-owned companies or any company in which Mali is a majority shareholder. Furthermore, the Implementing Decree limits to three (3) the number of research permits that can be held by a single legal entity in a geological district, whereas such a limitation did not exist in the 2019 mining code.
Another major reform is the overhaul of the tax and financial system related to mining activities. The Implementing Decree ensures that the state receives a fair share of the profits generated by the mining industry while providing clear guidelines on tax obligations of mining companies. For example, the Implementing Decree revises royalty taxes and tax structures. This change aims to prevent tax evasion and corruption, but more importantly, to increase the financial contribution of companies to the national budget, thereby increasing the funds available for national development projects and public services.
Regarding the states’ benefits, the government of Mali requires mining companies to prioritize nationals, local communities, national companies, and locally produced materials in their operations to boost local economies and foster positive relationships between mining companies and the communities in which they operate. Law no. 2023-040 and its Implementing Decree promote the involvement of local populations in the mining industry. They include provisions to ensure that local communities benefit more directly from mining activities, for example by creating employment opportunities and/or sourcing goods and services from local businesses.
Last but not least, the Implementing Decree introduces innovations in environmental protection by mandating comprehensive environmental impact assessments that detail potential environmental risks and propose mitigation measures before any mining activity begins. Additionally, mining companies must establish and fund environmental rehabilitation plans to restore mined areas. They must maintain an environmental guarantee fund to ensure they have the necessary resources to address environmental damages.