Mali’s Mines Minister Says Gold Production Unaffected

The war in Mali spared its gold mines operated by companies including Randgold Resources Ltd. (RRS), because 98 percent of the operations are in the south and away from any fighting, Mines Minister Amadou Baba Sy said.

Gold production grew to 50 metric tons last year from 46 tons the year before, Sy said in an interview in Cape Town today. A plan to support smaller companies to start producing will push output to 100 tons within two or three years, he said.

“The crisis hasn’t affected mining at all,” Sy said. “The insecurity which we’re experiencing is mainly in the north of the country.”

French and West African troops have been battling northern Islamist insurgents for almost a month. The rebels occupied two- thirds of Mali, which vies with Tanzania as Africa’s third- biggest gold producer, after soldiers ousted the government in March.

At least 13 international companies were engaged in gold exploration and production in the West African country in 2010, according to a U.S. Geological Survey Report.

Randgold’s Morila mine, co-owned with AngloGold Ashanti Ltd. (ANG), Africa’s biggest gold producer, and the government, produced more than a third of Mali’s output in 2010, according to the USGS.

Mali’s government is in “very advanced” talks to finalize a bauxite mining agreement with London-listed Eurasian Natural Resources Corp. (ENRC), Sy said. The government is promoting bauxite, uranium and iron ore development as it seeks to diversify its mining industry, he said.

ENRC should pay for a railway line into neighboring Guinea, which will allow it to ship bauxite, an aluminum ingredient, and iron ore, Sy said.

“I myself have asked that the mining agreement be linked to the development of railway infrastructure,” Sy said. “What’s holding us back a bit, what we really need is railway infrastructure, because we can’t export iron and bauxite very well without a developed railway network. That’s our priority at the moment.”

To contact the reporter on this story: Franz Wild in Johannesburg at fwild@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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