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If you have gold, France will help

If you have gold, France will help

FRENCH TROOPS IN MALI - After six days of aerial attacks, on January 16, 2013, French troops began to engage the Islamist rebels whose advances to the south are threatening to overthrow the unelected military regime - and the Rothschild-owned gold mines.

The real reason for the French military intervention in Mali is to protect the foreign-owned gold mining operations, which produce hundreds of thousands of ounces of gold for the owners per year.

MALI IS 'GOLD COUNTRY' - Foreign investors profit from the gold of Mali while its people wallow in poverty.  Nine out of ten people in Mali live in dire poverty and 72 percent of the population survives on less than a dollar a day.  Ninety percent of the Malian population is Muslim. 

WHY MALI? 

With U.S. assistance, the French are now waging war against the rebels in Mali.  Why did France suddenly decide to wage war in the west African nation?  If you were to listen to what the French and American leaders say about their military intervention, you would probably think the French, Danish, British, and U.S. operation in Mali is aimed at stopping terrorism, which is what they want you to think.  The real purpose of the French intervention, however, is to protect the Rothschild-owned gold mining operations in the south from being taken over. Mali is the third largest gold producer in Africa after South Africa and Ghana and the biggest mines in Mali are owned by Rothschild-controlled firms. 

France began its intervention on January 11, 2013, using aerial attacks to try and halt the Islamists' advance into the southern part of Mali.  Three days later, the UN Security Council unanimously backed the intervention.  On January 16, French troops began to engage in combat operations on the ground in Mali.  The United States is also deeply involved in the conflict, which it describes as part of the fraudulent "War on Terror."  The U.S. reportedly will not send troops to Mali because the ruling regime, which France is supporting, took power through a military coup in 2012. Contractors working with the military, however, are being deployed to Mali.

U.S. Defense Secretary Leon E. Panetta said that U.S. assistance includes air and other logistical support.  American spy planes and surveillance drones are already involved. Panetta said that even though Mali was far from the United States, the Obama administration was deeply worried about extremist groups there, including Al Qaeda in the Islamic Maghreb. “We’re concerned that any time Al Qaeda establishes a base of operations, while they might not have any immediate plans for attacks in the United States and in Europe, that ultimately that still remains their objective,” he said.

Neither the French nor the U.S. leaders say anything about protecting the Rothschild-owned gold mines, but portray their effort in Mali as part of the global war against terrorism.  But that doesn't make any sense at all because the Islamic rebel movement that the French and U.S. are fighting against in Mali is very much like the Free Syrian army they support in Syria, and not unlike the one they supported in Libya.  In all three cases the regime being challenged by Islamic rebels came to power through military coups. 

Why Canada in Mali

The humanitarian needs of many of Mali's 15.8 million citizens are huge, as half the population lives on less than $1.25 US a day.

In recent days, there have been calls for Canada, particularly from France, to get more militarily involved in Mali.

The $110 million Canada gave to Mali in 2010-11 (mostly through the Canadian International Development Agency) was enough to rank Mali as the third biggest recipient of Canadian assistance in Africa. Only Mozambique and Ethiopia received more.

Canada's decision to send a C-17 transport plane to help France repel Islamist militants in Mali has certainly raised public awareness among Canadians of this desperately poor sub-Saharan country.

Mali hasn't historically generated much in the way of international media coverage. But Canada has been providing development aid assistance to this sprawling West African nation for more than 40 years.

And Canadian-based companies have been actively involved in gold mining and other ventures in Mali for more than 20 years.

In fact, Mali has been designated a "country of focus" for CIDA since 2009. So it comes as no surprise that Canada is one of the biggest foreign aid donors to Mali, ranking fifth in the world according to OECD figures.

About a dozen Canadian gold miners are actively producing and exploring in Mali. Rich veins of gold were discovered in the country's southwest region in the late 1980s.

The biggest Canadian company there, Toronto-based Iamgold Corp., operates two joint ventures with South Africa-based AngloGold Ashanti and the Malian government.

Those two mines produced a total of about 129,000 ounces last year. While Iamgold's two projects are located far away from Mali's conflict zone in the northeast, the company announced this week that "exploration activity has been reduced as a precaution."

It was estimated in 2008 that resource royalties and taxes from gold mining provided Mali with about 17 per cent of total government revenues.

Currently, Mali is Africa’s third largest gold producer, after South Africa and Ghana. Hence, gold production forms the cornerstone of Mali’s mining industry and represents 95% of the country’s mineral production.(2) As such, this article will discuss Mali’s mining industry with regards to international involvement in the sector, as well as the implications of mine production for the African country.

Overview of Mali’s mining industry

Mining has long formed an important aspect of the Malian economy. When modern commercial gold mining started in 1984, it accounted for only 1.5% of Mali’s Gross Domestic Product (GDP). In 1991, after a commercial mining code reflecting internationally accepted standards was implemented according to the International Development Association, commercial gold production proliferated from 4 metric tonnes that year to 48 metric tonnes in 2008.(3)

Simultaneously, Mali relaxed the enforcement of mining codes and this led to greater foreign investment in the mining industry. From 1994 until 2007, national and international mining companies were granted approximately 150 operating licences along with more than 25 certificates for mineral exploitation and an excess of 200 research permits. Government revenue originating from mining contracts totalled less than 1% of the state’s income in 1989, but increased to nearly 18% in 2007. Rising international gold prices have also increased exploration, investment, and production in the mining sector. The upsurge in gold prices, from an average US$ 445 per ounce in 2005 to US$ 900 per ounce in 2009, has nearly doubled Mali’s profit on gold production. This increase in the gold price has translated into higher royalties (a minimum of 3% and maximum of 65% depending on when the mine started production), profit taxes, and dividend payments.(4)

Mali’s mineral wealth

Mali has abundant mineral wealth. Gold has become Mali’s second-largest export after cotton and has emerged as a leading export for the African country since 1999. Mali is West Africa’s second largest gold producer with an estimated 2009 output of 1.6 million ounces, or 49 tonnes, and total gold wealth is estimated at 350 tonnes.(5)

Several companies in Mali are currently carrying out uranium exploration in the Falea and Gao regions, where the uranium potential is estimated to be 5,200 tonnes. Furthermore, Mali has the potential to develop diamond explorations. In the Kayes administrative region, also known as “Mining region 1”, 30 kimberlitic pipes have been discovered of which eight show traces of diamonds. Diamonds have also been picked up in the Sikasso administrative region, in southern Mali.(6)

More than 1.3 million tonnes of potential iron ore reserves has been detected in the areas of Djidian-Kenieba, Diamou, and Bale. Bauxite reserves are estimated to be 1.2 million tonnes and the potential for other mineral resources in Mali includes 42.2 million tonnes of calcareous rock deposits; nearly 46 million tonnes of copper reserves; 1.7 million tonnes of lead and zinc with traces in western and northern Mali; an estimated potential of 4 million lithium reserves; 53 million tonnes of rock salt; 65 million tonnes of diatomite potential; and an estimated 870 million of bitumen schist.(7)

International involvement in the mining industry

Various gold mines and one diamond mine, owned by several international companies, are situated around Mali.(8) The main gold mines include the AngloGold Ashanti part-owned Morila, Sadiola and Yatela, as well as Tabakoto/Segala (Avion), Loulo (Randgold) and Syama (Resolute).

South African-based Randgold Resources owns 80% of the Loulo gold mine (open pit and underground) and the Government of Mali owns 20%. This mine produced 282,000 ounces of gold at a cash cost of US$ 522 per ounce in 2009. Sadiola gold mine, the second largest mine in Mali, is jointly owned by South African AngloGold Ashanti (41%) and Canadian IAMGOLD (41%), as well as the Government of Mali (18%). Sadiola produced 320,000 ounces of gold at a cash cost of US$ 488 per ounce in 2009. In the Yatela operation, which also uses conventional open-pit mining techniques and heap leach, AngloGold Ashanti and IAMGOLD each have a 40% stake and the Government owns 20% of the shares. This mine produced 233,000 ounces of gold at a cash cost of US$ 368 per ounce in 2009. Morila gold mine produced 343,000 ounces in 2009 at a cash cost of US$ 527 per ounce and is jointly owned by AngloGold Ashanti (40%), Randgold Resources (40%) and the Government of Mali (20%).

Furthermore, Australian Resolute Mining owns an 80% stake in Syama gold mine, while Mali’s Government has a 20% stake. Syama produced 60,000 ounces of gold in 2009. Avnel Gold, a 100% subsidiary of Canadian-based Avnel Gold Mining, owns Kalana gold mine in Mali. Avion Gold, also a Canadian-based gold producer, owns 80% of the Tabakoto and Segala gold mines, which are situated in a major gold mining district where Sadiola and Loulo are located, while the Government of Mali owns the remaining 20% of these mines. Only one diamond mine is located in Mali. Australian Ashton West Africa and Canadian Mink International Resources Corporation have formed a joint venture and collectively own 51% and 49% of Kenieba.

Implications of mining operations

While a substantial amount of income from gold mining is produced, there are a significant number of expatriates employed in the mining industry, especially in senior positions. Residents in the areas of intensive mining operations have allegedly complained that they receive little benefit from the industry’s wealth. Furthermore, villages have been relocated because of mine construction - 43 households, comprising one or two villages were displaced due to Sadiola being built, while 121 households were dislocated in Fourou, near Syama.

In return for the land, the villagers have the option of seeking compensation, either from the Government authorities or directly from the mining company. In 2002, however, Mali’s National Assembly adopted a new legislation. This new policy entitled those persons who had not registered their land to also be compensated for land expropriation. As such, residents whose unregistered land was expropriated during the construction of Sadiola and Morila were not compensated, as the legislation was introduced only after the two mines were established in 1996 and 2000 respectively.(9)

In Sadiola and Morila, only a minority of the people who had legal title to the land was eligible for state compensation of the expropriated land. The majority of agriculturalists and pastoralists who had not registered their land before the advent of the mines could only directly seek compensation from the mining companies. In the end, the mining companies gave compensation to land users for the fields, fruit trees, and houses that were given up. In some instances, compensation took the form of money or the construction of new settlements. After compensation was provided, the mining companies registered the land acquired and thus obtained property rights to it for future use.(10)

Furthermore, the establishment of the gold mines has had negative effects on the natural environment, and, consequently, the people who depend on it. One study done by CMI(11) noted that the construction of the gold mines, most notably Sadiola and Morila, caused deforestation, as the trees that were in the concession area were removed with the establishment of the mines, and because of over-exploitation of wood during the operations phase. However, another possibility is that the mines attracted new residents, who may have then exploited wood outside of the mining areas. Another problem posed by the construction of the mines included the possibility of contamination by cyanide and other liquids that would coalesce with surface water and thus pose a danger to both people and animals.

Conclusion

Since the Government of Mali reformed mining codes in the early 1990s, much foreign investment, in the form of international mining companies, has entered the African country. Several gold mines and one diamond mine are operational, while discovery of new projects, feasibility studies and other developments are in the pipeline for other international companies, such as North Atlantic Resources, African Gold Group, Axmin, Etruscan Resources, Golden Rim Resources, Merrex Gold, and Pelangio Exploration. While gold has generated wealth for Mali’s Government, the construction of the mines has caused land expropriation.

However, it seems that Mali is currently intent on developing those other mineral resources as is considering to introduce a new mining code (one option being to cut taxes, although most of the Government’s wealth comes from the taxes that international firms pay to operate in the country), which will be voted on by the members of Parliament in October 2010. As such, it remains to be seen whether those minerals will in fact be developed and whether the wealth of those mineral resources will assist Mali out of debt and poverty and lead to economic growth and development in the country.

In Mali, there are three main companies that control the majority of the mining sector. These companies are AngloGold Ashanti, Randgold, and IAMgold.  The companies are all owned or financed by the Rothschild family.  The Sadiola and Morila mines of Mali, both run by Rothschild-owned companies, produced 83 percent of all gold produced in Mali between 1999 and 2001. This amounts to hundreds of millions of dollars worth of gold being extracted from the Rothschild mines in Mali, every year.

The chairman of AngloGold Ashanti, shareholder and operator of the two biggest gold mines, was Russell Philip Edey from 2002-2010.  Edey also served as Vice-president of NM Rothschild Corporate Finance Limited and chairman of a whole host of Rothschild-owned companies, as can be seen by his BusinessWeek executive profile.  

AngloGold Ashanti has 20 operations in 10 countries on four continents and produced 4.33 million ounces (Moz) of gold in 2011, generating $6.6bn in gold income, according to the company website.

Randgold is another Rothschild-controlled company.  This can be seen in who sits on the board of the company.  Christopher Lewis Coleman, for example, is an independent non-executive director of Randgold Resources Ltd. since 2008. Coleman is also Managing Director of Rothschild, Co-Head of Banking of N M Rothschild & Sons Ltd., and Chairman of Rothschild Bank International Ltd.

IAMgold is a Canadian-based mining company that has been financed by N.M. Rothschild since at least April 2008.

A report on the impact of gold mining in Mali begins:

Investors see in Mali the perfect environment for resource extraction with none of the responsibility of honoring human rights, contributing to the state economy, or respecting environmental conditions. Mali traditional culture says that “gold belongs to the devil” and according to this tradition, gold appears when the devil is happy and disappears when he is upset.