The Republic of Mali is land-locked country in the northwest corner of Africa, bordered to the north by the Sahara Desert and by the countries Sénégal, Mauritania, Algeria, Burkina Faso, Niger, Cote D’Ivoire and Guinea. Bamako, the capital city, is located on the Niger River.
The climate is subtropical to arid: hot and dry from February to June; rainy and humid between the months of June to November, and, relatively cool and dry between the months of November to January. Over 65% of its land area is desert or semi-desert.
Mali has only one international airport, at Bamako, with daily flights to and from Europe and other capital cities in West Africa.
Mali is among the poorest countries in the world, with a GNP (2005) per capita of only $968. The population of Mali is approximately 13.52 million inhabitants (2005), comprised of 50% Mande, 17% Peul and 12% Voltaic ethnic groups. The official language is French, although numerous local tribal dialects are spoken throughout the country. Mali has one of the highest literacy rates in Africa, with 68% of the population being literate. Over 90% of the population is Muslim.
Mali is located at the heart of ancient empires stretching back to the fourth century.
The region was colonised by the French in the middle of the 19th century. After a brief period of federaion with Senegal, Mali became independent on September 22, 1960. For several decades after independence from France, Mali suffered droughts, rebellions, a coup and 23 years of military dictatorship until democratic elections in 1992.
Politically, Mali is a republic modeled after the French system of government. The President of the Republic is democratically elected by popular vote to a five year term. At the elections conducted in May 2007 Amadou Toumani Toure was elected for his second five year term as the President.
The National Assembly is the legislative branch of the government to which members are elected by popular vote to serve five year terms. The country is divided into eight administrative districts. The legal system is based on French civil law.
Economic activity is largely confined to the area irrigated by the Niger River in the south half of the country. Over 80% of the labour force is engaged in farming and fishing and the country is self-sufficient in food. Mali is one of Africa’s major cotton producers and cotton remains the major export. Limited industrial activity is related to processing of agricultural products.
The local currency is the CFA-Franc (BCEAO) which is pegged to the Euro (1CFA =0.001525 Euro, December 17, 2010).
Mining, particularly gold mining, has become a key industry which has attracted significant foreign investment, generated high levels of employment outside of the capital city of Bamako and has assisted with development of new infrastructure projects. Annual gold production was approximately 2 million ounces in 2007. Over a 10 year period, Mali has become Africa’s third biggest gold producer after South Africa and Ghana, with gold production representing 36% of Mali’s GDP.
Mali mining Code
Malian mining law provides that all mineral resources are administered by DNGM, under the Government of Mali’s Ministry of Mines, Energy and Hydrology. Foreign exploration companies are required to enter into a founding agreement, referred to as a “Convention d’Établissement,” with the Malian government, prior to commencement of any exploration or mining. This agreement, negotiated between the parties, comprehensively fixes all of the conditions that will apply to exploration and, in the event of a discovery, exploitation periods. The conditions include work obligations, reporting, taxes, duties, duty-free arrangements, state equity participation, etc.
In cases where an economically viable deposit has been discovered, the holder of a Mining License is required to create a Malian corporation whereby the Government of Mali is granted a 10% free carried interest. The Malian government also reserves the right to purchase a further 10% participating interest in the project.
Fiscal conditions are set out in the “Convention d’Établissement” which allows for repatriation of capital and dividends. Mining ventures are generally free of corporate tax for the first five years of production. Thereafter, the tax rate is 35% or less when profit is reinvested in Mali. A depletion allowance can be negotiated up to 27.5%. All equipment for the project can be imported duty free during the exploration period and for the first three years of the exploitation period. The mining royalty payable to the government on the value of production is 3% and there is a Value Added tax also of 3%.