2 October 2012

Mali: Calm Down On Mali Travel Bans, Says Gold Miner

Egged on by sensationalist media, some governments are issuing clumsy nationwide travel bans on Mali that are hurting the mining industry in the peaceful south

Mali, Africa's third biggest gold producer behind South Africa and Ghana, has rapidly ascended the list of Sahelian countries thought to be succumbing to al-Qaeda linked militants.

A coup in March by angry soldiers unhappy at their measly resources for the fight provided Tuareg militants an opportunity they quickly grabbed, taking control of the country's north.

But many countries, egged on by sensationalist media, are now issuing clumsy nationwide travel bans that are hurting the mining industry in the peaceful south, says Lutz Hartmann, CEO of Frankfurt-based gold mining company Pearl Gold AG.

"There is an issue when certain countries deliver travel warnings for the whole country and don't divide it. You can read in German newspapers, with journalists sitting in Europe, that there is a civil war in Mali, which is not true. It's just in the north".

Pearl Gold's investment, in Kodieran, are over 1000 kilometres from captured Timbuktu, and 350 kilometres south of the capital Bamako, which is safe and sound at present. "We recently had an investor that wanted to come and asked for security measures. Coming to the airport and driving through Bamako he excused himself for the story he made out of it, because he felt completely secure and happy to be there".

Travel bans are delaying Pearl Gold's production in Mali, its only country of operations, by making it harder to hire international consultants, technicians and suppliers. "If I look to Canada, for example, they have a travel warning for the whole country. That makes it difficult for Canadian countries to send technicians to our mine. For companies that are international, we can get the same people out of other offices, so you hire the same guy not through the Montreal office but through the South African office, and he can travel because South Africa doesn't have a travel warning".

Other gold mining companies, clustered in the south and southwest, are continuing with little pause. While Randgold Resources saw company shares drop by 17 percent following the coup, the company posted first quarter profits at double that achieved the previous year. A few weeks ago, investments in the country's first gold refining facility were announced.

But foreign governments may well err on the side of caution for the time being, as the Malian government has yet to mount a serious effort to recapture the north, which could raise the stakes. Bamako has just appealed to Western nations, the UN and the regional body of ECOWAS to deploy thousands of troops for a fight-back.

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