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Mining Earnings Drop On Lower Gold Production, Prices

Mali’s earnings from its gold-dominated mining sector slipped by around six percent to just under 206 billion CFA francs ($350.60 million) last year due to a drop in output and lower prices for the precious metal, mines ministry data showed on Thursday.

Mali is Africa’s third-biggest gold producer after South Africa and Ghana, and gold earnings make up around a quarter of government revenues.

The West African nation earned nearly 219 billion CFA francs in taxes and royalties from mining operations in 2013.

“Gold production fell by 1.142 tonnes to 49.865 tonnes … The price of the precious metal fell from $1,266.25 per ounce in 2013 to $1,229 per ounce in 2014,” Mohamed Ouedrago, statistics director for the ministry, told Reuters.

Meanwhile, gold’s contribution to Mali’s economy fell from 7.1 percent of GDP in 2013 to 5.8 percent last year, he said.

The country’s gold output is projected to further drop to 48.9 tonnes this year as production from some mature mines dwindles.

Mali also saw iron ore production fall to zero in 2014 from 148,307 tonnes of raw ore the previous year after Sahara Mining shut down its iron operations. 

Gold mining companies operating in Mali include London-listed Randgold Resources, AngloGold Ashanti, Australia’s Resolute Mining and Canadian miner IAMGOLD.

The mines ministry this week announced it had tasked auditors Deloitte, law firm Eversheds and France’s national geological service BRGM with carrying out a six-month World Bank-funded diagnostic study of Mali’s mining sector.

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