* The attack raises security concerns, analysts and executives say
* Miners cite strong gold prices as reason to stay
* Chinese firms are very optimistic about the outlook
DAKAR, April 28 (Reuters) – International mining companies are likely to continue investing in Mali, one of Africa’s most resource-rich countries, even as an attack on Saturday that killed the defense minister raised concerns about supply routes, industry executives and analysts said. Mali is one of the largest producers of gold in Africa, reaching high levels in international markets. It also has significant deposits of lithium, uranium and copper. But it has been battling insurgents for decades and the resulting insurgencies have allowed the military to stage repeated coups.
On Saturday, after rival groups showed unprecedented cooperation, a coalition of al Qaeda-linked militias and rebels killed Mali’s defense minister, stormed the capital’s airport and drove Russian troops from the desert city 1,000 kilometers (620 miles) away.
THE MALI GOVERNMENT SAYS THE SITUATION IS UNDER CONTROL
The Malian government said plans to deal with the rebels are ongoing, but the situation is under control.
The Department of Mines did not immediately respond to requests for comment. Three mining officials, who did not want to be named, and two analysts said the instability has raised concerns about supply routes and cargo security as insurgents sometimes block deliveries of fuel and other supplies.
Vincent Rouget, of Control Risks, said “there will be security risks and terrorism on supply routes”.
Daniel van Dalen, senior risk analyst at Signal Risk, said there was an increased likelihood of coups and any associated unrest could spread to commercial mines.
“There is a real risk that such a reaction could spill over into foreign interests, especially goods linked to the West,” he said. Already, Mali has become less attractive to international miners as the military-led government, which depends on mining for revenue after taking power in 2021, changed the mining code.
The reforms raised taxes and increased the amount of equity held by the state and reduced that held by multinational corporations. Barrick regained operational control of its flagship Loulo-Gounkoto complex earlier this year after a two-year standoff with the government.
RISK-REWARD BALANCE Despite the negative relationship, many miners have continued to invest, especially since industrial mining is concentrated in the south, which is relatively protected from unrest.
Australian-listed Resolute said on Tuesday its Syama gold mine in southern Mali was now fully operational and that the escalation of violence had not affected worker safety, morale and output.
Another mining executive operating across the Sahel, in central Mali, said the potential for profit from high gold prices and good quality ore mitigated the risks.
Chinese miners are very aggressive, in some cases picking up assets after other operators have decided to reduce their exposure. Canadian-listed Allied sold its finance operations to China’s Zijin last year.
A source in Zijin said the company has trained armed guards, while a senior official at Ganfeng Lithium, which owns 65% of Mali’s Goulamina lithium project, said the mine is far from the affected areas and the company is well prepared for any eventualities. (Reporting by Maxwell Akalaare Adombila; Additional reporting by Tom Daly in London; Editing by Barbara Lewis)
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