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International Monetary Fund. Fiscal Affairs Dept.
This paper discusses Malian mining taxation. Mali’s industrial mining sector is predominantly gold mining, with six industrial mines currently active. Most of the mines are old, but some have substantial reserves; extensions are planned for the Syama, Morila, Kalama, Tabakoto-Segela, and Loulo-Gounkoto mines. The Fiscal Analysis for Resource Industries model was completed for five new projects with recent feasibility studies. The government revenue contributed by the five new projects is on the order of US$1.7 billion (constant dollars) over the next 10 years. The application of the 1999 or 2012 Mining Code increases the government’s share of income in comparison with the 1991 code.
International Monetary Fund. Fiscal Affairs Dept.
This Technical Assistance Report discusses continued modernization of the Malian tax system and administration of natural resources. The Malian mining sector essentially consists of gold mining. The diversification policy is a failure at this point. The authorities’ stated objective of diversifying mining production has not produced a clear, consistent action plan. Apart from precious substances, the high cost of bulk transportation (minerals), the technical and financial difficulties of local processing, and the weak domestic market make it unlikely that Mali’s mining future can be defined other than by gold in the short or medium term.
Mr. Saji Thomas
Mali’s gold sector is an enclave with weak forward and backward linkages with the rest of the economy. Given the predominance of the fiscal transmission channel, it is important that the design of the mineral tax regime gives the state a fair share of the benefits. Using optimal control theory, this paper estimates that the optimal royalty tax in Mali is about 3.5 percent. By reducing the royalty rate from 6 percent to 3 percent, Mali’s mining code broadly ensures that the risk is shared between the state and mining companies, provides sufficient incentives to attract new exploration, and is comparable to the fiscal regimes in other sub-Saharan African countries in its mix of tax instruments and tax structure.
International Monetary Fund
The cotton sector in Mali is facing major challenges to overcome, with low export prices, technical hurdles, and a poorly performing state-owned cotton ginner. Some reforms, most notably with regard to the setting of the farmgate procurement price, have already been undertaken, but more is needed to put the sector on a sound financial footing. It is vital that the production process be modernized and the ginner profoundly reformed if cotton is to play a major role in poverty reduction in rural Mali.
International Monetary Fund
This Selected Issues paper and Statistical Annex for Mali examines recent economic developments in Mali. The paper highlights that since the early 1990s, Mali has made appreciable progress in reducing macroeconomic imbalances and liberalizing the economy. This has been made possible by consolidating the government fiscal position, lowering inflation, dismantling public monopolies, abolishing price controls, liberalizing the trade regime, and allowing for a greater role for private sector initiative. However, the pace of the country’s development remains constrained by a low level of human capital, inadequate infrastructure, and high energy and telecommunications costs.
International Monetary Fund
Gold mining represents an engine of growth for the Malian economy. A description of the techniques and importance of artisanal gold mining in Mali, the key developments of the industrial mining era, and potential gold mining developments are discussed in the paper. The Malian mining policy and regulations, the impact of industrial gold mining on the Malian economy, public finances, and employment are discussed. The statistical data on the economic indices of Mali are also presented in the paper.