BAMAKO, Aug 21 (Reuters) - Mining companies operating in Mali will no longer be exempt from VAT during production and will have a shorter period of protection from fiscal changes, according to a new mining code announced by the Mines Ministry on Wednesday.
The new code seeks to redress the “shortcomings” of a 2012 law by bringing a “substantial increase” in the contribution of the mining sector to the economy, the Mines Ministry said in a statement.
But it contains some clauses that international mining companies have strongly opposed elsewhere in Africa, most notably in the Democratic Republic of Congo where companies have been at loggerheads with government.
The new code in Mali, Africa’s third largest gold producer, shortens the “stability period” during which mining companies’ existing investments are protected from changes to fiscal and customs regimes.
Under the previous law, the stability clause was 30 years. It was not made clear on Wednesday what the length of the new stability period would be, but the Economy Ministry said last year that the government aimed to reduce those protections to the lifespan of a mine.
Mali’s government had been negotiating with mining companies to draft a new mining code, but it said last year that it would move to implement a new law unilaterally if no compromise was reached.
It was not clear on Wednesday whether the new code was the product of compromise or if it was proposed without consultation.
Companies with stakes in industrial gold mines in Mali include Barrick Gold Corp, AngloGold Ashanti, B2Gold and Hummingbird Resources. (Reporting by Tiemoko Diallo Writing by Edward McAllister Editing by Leslie Adler)