Mali’s military government has officially started construction on a new gold refinery, backed by Russia, aiming to strengthen the country’s control over its mineral wealth.

The refinery will be majority-owned by the Malian state, holding 62% of the project, while Russian company Yadran will retain a 38% stake.

At the groundbreaking event, interim President Colonel Assimi Goïta emphasized that the refinery is a key part of a wider initiative to require all gold mining operations to process their output domestically, under a revised mining code.

However, no specific date has been set for when this policy will come into effect, Reuters reports.

This move aligns with a broader regional trend in the Sahel, where countries such as Guinea, Niger, and Burkina Faso have also updated mining legislation to mandate local refining, with the goal of capturing more value and retaining a greater share of export revenues.

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Since 1980, Mali has exported its gold in unrefined form to countries including the UAE, South Africa, and Switzerland, forfeiting significant revenue that could otherwise fuel economic growth, Goïta pointed out.

Despite ranking as Africa’s second-largest gold producer, Mali currently lacks a refinery that meets international certification standards.

Its existing two facilities fail to comply with requirements set by bodies like the London Bullion Market Association (LBMA), forcing miners to send their gold abroad for processing.

The new refinery, located on a five-hectare plot near Bamako’s international airport, is designed to produce gold with a purity of 99.5%, in line with global certification standards.

It will boost Mali’s refining capacity from about 50 metric tons per year to 200 metric tons, a fourfold increase.

This project forms part of Goïta’s comprehensive reforms of the mining sector since his 2021 rise to power, coinciding with Mali’s strategic distancing from Western partners.

Goïta also highlighted the refinery’s role in improving gold traceability and combating the extensive smuggling that has drained billions from the country’s coffers, a problem affecting many African gold producers lacking certified refining and tracking infrastructure.

Since seizing power in 2020, Mali’s military leadership has committed to overhauling the mining industry to ensure the state secures a larger share of gold-generated income.

These reforms are expected to increase government revenues by roughly $950 million annually, equating to nearly 20% of Mali’s national budget.

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