Gold Mining in Mali

I came across an article today from Reuters, "Randgold's Loulo mine in Mali to miss 2010 target", about one of the gold mines close to Kenieba, the one that my host dad and some of my friends actually work at. Though the headline is discouraging, the last paragraph was eye-opening:

"Seeking to take advantage of high metals prices by developing mining, which recently overtook cotton as the country's biggest export earner, Mali is looking to introduce a new mining code later this year."

Gold mining is the dominant economic activity in the region of Mali where I live and work. Many people who live there go out to distant, uninhabited areas and mine for gold using traditional methods with rudimentary tools. Some people strike it rich, but most are lucky to make even a little money after a week's work. I haven't had the opportunity to visit one of these traditional mines, but my friend Dan wrote a great post about his visit to a mine near his site.

Large scale mining companies from South Africa and Canada operate gold mines in western Mali and have bought the mining rights to large swaths of land with plans to expand their operations there. The cheapest way to mine the gold is open pit mining... basically digging up the earth to mechanically and chemically extract the gold. All of this digging creates a pit hundreds of feet deep and easily half a mile across (google open pit gold mining for an idea of what it looks like). Typically only 1 to 2 grams of gold comes out of each ton (1,000,000 grams) of earth extracted.

One would hope that all of this gold mining would bring about positive change to Kenieba and the villages near where all of this land is being dug up and processed. In reality, this is not entirely the case. Prices for goods are inflated in Kenieba, because sellers know that people have money here and can afford to pay the higher prices. The large scale mines employ hundreds of people, many of whom are Malians (like my host dad). The problem is, they are not always employing the local population... many people come from other parts of Mali and other African countries to work at the mine, and people from the villages and towns near the mines are left unemployed. A lot of this has to do with cronyism, but in many cases the local population lacks the skills needed to work at the mines.

So when I read that paragraph about gold becoming Mali's largest export, and that Mali is looking to introduce a new mining code, I hope that the right decisions are made about the code so that the local population benefits from all this gold mining taking place near where they live. I have been told that the Malian government takes about a 15% cut of all the gold mining revenue at these big mines. This has got to be a huge sum, considering Mali is Africa's third largest exporter of gold, and gold still trades close to record highs. But I'm sure that the way it works right now, Kenieba and other towns in the region don't see much of that money, if any. Who knows where the 15% ends up.

The large scale gold mines are here to stay, for at least the next 10-20 years. They are all expanding their operations, and will need more workers. If anything, the money that the Malian government gains from the contracts should be disclosed, and it should be declared where the money ends up. The Malian government should encourage more local employment. People in developing countries like Mali should be directly benefiting from the valuable resources being taken from the land around them.