Gold miners empty containers of earth removed from a mining shaft in Koflatie, Mali, 2014. Sebastien Rieussec/AFP via Getty Images
Seven centuries later, Mali is again experiencing a boom in gold exports. World market gold prices have nearly doubled over the past decade, as has Mali’s industrial output. It is now approaching seventy tons annually. Gold has replaced cotton as Mali’s leading export, and Mali has become Africa’s third-largest gold producer.
While these trends have the potential to translate into growing revenues for the cash-strapped Malian government, an enormous share of Mali’s gold vanishes from the country through illicit flows. There is the gold produced by global industrial firms in Mali, which is taxable and traceable. But gold is also produced by artisanal miners, much of whose output flows from the country through clandestine networks that escape state regulatory or fiscal controls.
The primary destination of artisanal gold seems to be the United Arab Emirates. By all evidence, the gold that shines in the souks of Dubai is the product of a complex web of criminal networks, terrorist groups and internationally sanctioned regimes, who use this artisanally mined gold to launder their money. The same forces that are transforming Mali into a hub for the gold trade are ensuring this peripheral country straddling the Sahara and Sahel regions remains precarious in the global economy.
Disparate Figures
According to official Malian statistics, the majority of Mali’s gold is produced by industrial firms located in 13 sites across the country’s southern and western regions. As Mali lacked the capital to develop these sites, they are operated by a small number of multinational mining companies headquartered in Canada, Australia, South Africa and the United Kingdom that have permits from the Malian government to extract their ore. In 2020, industrial firms reported producing 65.2 metric tons of gold, accounting for roughly ten percent of the country’s gross domestic product.
Mali’s Mining Code requires the operations and finances of these firms to be monitored by the Malian government. Firms must pay 20–25 percent of their proceeds to the Malian treasury. A much smaller share goes to a development fund that was set up in 2012 to benefit the communities that host mining operations. In 2021 alone, Mali’s Ministry of Mines reportedly collected the equivalent of nearly $1 billion in taxes from industrial gold production.
In addition to these industrial sites, hundreds of smaller-scale “artisanal” mines are scattered throughout the country. Artisanal mines—which have seen a dramatic upswing since the early 2000s—entail more labor, less capital and less oversight.[1] Unlike industrial mines, artisanal mines are as old as Mali itself and generate livelihoods for a large number of local communities. By some estimations, these mines employ or support one in ten inhabitants of the central Sahel region.[2]
According to official figures, the role artisanal mines play in the country’s gold production is minor—over the past several years, the Malian government has recorded a scant four to six tons of artisanal gold mined annually, less than ten percent of Mali’s annual industrial output. But there are reasons to believe artisanal gold production in Mali is far higher. Malian officials have privately estimated the figure to be between 30–50 tons, while recent investigative journalism from France 24 reckoned that at least half of Mali’s gold, over 60 tons, comes from artisanal mines.
The most compelling reason to doubt official Malian figures for artisanal production is that other countries claim to import a great deal more gold from Mali than Mali claims to produce. According to the UN Comtrade Database—an online aggregator of international trade statistics—the UAE purchased nearly 81 tons of gold from Mali in 2019. By comparison, the same year, the Malian government reported exporting a mere half ton to the UAE. Similar discrepancies pervade recent trade statistics between the two countries. The production and export of Mali’s industrial gold is tightly controlled—most of this output goes to Switzerland, whose import figures largely match Mali’s export figures. It is Mali’s artisanal production and exports, then, that far exceed official estimates.
Among African gold producers, Mali is no exception. Since 2016, the UAE registered more gold shipments from several African countries, including Libya, Ghana, Sudan and Tanzania, than those countries reported exporting. Gold from conflict zones in East and Central Africa has recently begun flooding Dubai’s markets, and the smuggling of gold from Africa’s Sahara and Sahel regions is believed to be far greater than from the continent’s other regions.
Moving Artisanal Gold
Much of the gold that departs Mali for the UAE originates outside of the country’s borders. Over the past decade, Mali’s capital Bamako has become the regional hub for illicit precious metal transshipment from West Africa to the Persian Gulf. While most of this gold probably comes from artisanal mines in neighboring states of Senegal, Burkina Faso, Guinea and Sierra Leone, the ENACT Network on transnational crime has reported gold in Bamako originating from as far as Venezuela.
Buyers in Bamako, often prefinanced with foreign capital, acquire gold nuggets from artisanal miners and smugglers. At the city’s various refining facilities, they melt these nuggets into bars and ship them abroad. By paying off local customs and airport officials, their couriers can easily leave Bamako for Dubai with bars of artisanal gold stowed in their hand luggage.
The Emirates have long been a global hub for transnational African merchants, who travel to Dubai to purchase imported goods such as Japanese-made auto parts or Chinese-made garments. Emirati authorities and commercial players are now exploiting their country’s existing commercial status to make the UAE an important node for the trade in precious metals, especially gold. These buyers are actively financing associates in Mali and throughout the Sahel and Sahara regions, driving the expansion of artisanal mining into new areas.
A Proliferation of Blind Eyes
By law, gold exporters in Mali must pay a three-percent tax on the value of their exports. If Mali is, in fact, producing as much artisanal as industrial gold, it should be earning over $100 million each year from taxes on artisanal exports alone. Even the state’s earnings from above-board artisanal exports, however, are undermined by loopholes and exemptions. This permissive regulatory environment works to lure gold buyers and exporters from neighboring countries, depriving other states in the region of their own revenue streams. Some of Mali’s political elites, it seems, have chosen to capitalize on their country’s position on the global periphery by turning it into a modest regional hub.
Legal loopholes and regulatory arbitrage are just the tip of the iceberg when it comes to missing state revenues. Throughout Mali and the wider region, most exports of artisanal gold escape official government notice and taxation altogether, partly due to the state’s limited capacity to police its territory and enforce its laws and partly to the efforts by Malian economic and political elites to circumvent them. Apart from the fees paid to local authorities at the mining sites and bribes paid to gatekeepers in Bamako, the proceeds from the informal production and export of gold bypass the Malian state apparatus.
In some cases, the scale of an artisanal mining operation is too large to escape the attention of authorities in Bamako. Bigger extraction sites, such as the Intahaka mine in the northern Gao region, are several kilometers wide and employ thousands of workers as well as bulldozers and other heavy equipment. Like much of northern Mali, Intahaka falls outside of central government control due to the complex and increasingly violent conflict that, since 2012, has pitted various local non-state actors and militias against state security forces, UN peacekeepers, foreign troops and most recently private military contractors.
As with other artisanal mines, the gold from northern Malian sites like Intahaka attracts interest and capital from abroad. Buyers from the UAE, as well as Turkey and Russia, have been reported there. In these zones, local authorities have succeeded in imposing some regulations on artisanal mining operations. A coalition of rebel groups whose leaders signed a peace accord with the Malian government has reportedly begun levying taxes on gold extracted from the areas under their control. Jihadi groups affiliated with Al Qaeda and the Islamic State, however, have signed no treaties, and as they continue to mount deadly attacks on Malian civilians, security forces and peacekeepers, they are also reportedly taking their cut of the gold proceeds. Transnational narcotics traffickers too are using northern Mali’s artisanal mines to expand and launder their capital.
In southern and western Mali, where rebel and jihadi groups have yet to gain a strong foothold, Bamako theoretically has a greater ability to control, regulate and tax artisanal mines. But aside from selling permits to miners, until recently, the Malian government has paid little attention to this increasingly lucrative sector, despite the many problems it has generated for the inhabitants of mining zones. Not only has the gold boom fueled an exodus of agricultural labor from many communities, it has contaminated soil and rivers and exacerbated insecurity.
As for the UAE, as imports of dubious provenance have skyrocketed and reports of money laundering have proliferated, Emirati authorities have taken no steps to stem the illicit flow of precious metals into the country from African conflict zones.
Gold’s Dimming Luster
More than a decade into Mali’s gold boom, industrial mines in the country are encountering their own problems and constraints. As several existing operations reach the end of their productive lives, large firms may be reluctant to search for new sites amid increasing insecurity and political instability in the country. Meanwhile, the Malian government has shown interest in monitoring the finances of industrial mines more closely after a 2019 report by its auditor-general claimed there were hundreds of millions of dollars worth of irregularities in the sector and accused industrial firms of environmental destruction.[3] In May 2022, Mali’s ruling military junta announced its intention to audit the industrial mining sector.
Authorities in Bamako have typically shown little corresponding interest in increasing regulations of artisanal mining. But political winds may be shifting. In November 2022, Mali’s Ministry of Mines announced that authorities arrested hundreds of foreign gold prospectors, confiscated heavy equipment and dismantled at least two illegal mining sites in the south of the country. The government has also established a new state-owned company for the exploration and development of new industrial mining sites—activities from which the state has, in the past, been absent.
It remains to be seen whether the Malian state will confront its own citizens who are involved in draining the country of its most precious resource. Those who benefit from illicit gold exports are pleased to maintain the status quo. By resisting the regularization of resource and financial flows, they also ensure that the central government will continue to lack both the capacity and the political will to control its territory, enforce its laws, protect its natural resources or invest in its own future. Mali’s economic precarity will increase with the complicity of entrepreneurs and officials in other countries, most notably the UAE.
Seven hundred years ago, the gold carried by Kankan Moussa’s caravan brought lasting renown to an empire. Today’s illicit flows enrich only the few individuals whose hands they pass through. One day in the not-too-distant future, Mali’s gold boom will be over. It is unclear whether the Malian state and its people will have anything to show for it.
[Bruce Whitehouse is an Associate Professor of Anthropology at Lehigh University.]
Endnotes
[1] William G. Moseley, “The Minimalist State and Donor Landscapes: Livelihood Security in Mali during and after the 2012–2013 Coup and Rebellion,” African Studies Review 60/1 (2017).
[2] Luca Raineri, “Gold Mining in the Sahara-Sahel: The Political Geography of State-making and Unmaking,” The International Spectator 55/4 (2020), p. 104.
[3] “Bureau du Vérificateur Général – Rapport Annuel 2019” (Government of Mali2020), pp. 71-72.
