Kodal Minerals lithium project in Mali unfazed by new law

Kodal Minerals (LSE: KOD) said on Friday it is moving its Bougouni lithium project in Mali into the next development phase as won’t be affected by new legislation that entitles the state to a greater share of its resources.

Mali’s interim President Assimi Goita signed a new law in late August, which doubles the stake the government can acquire to 20% within the first two years of commercial production. It also sets aside an additional 5% stake for local investors, taking state and private Malian interests in new projects to 35%.

Authorities had said the updated law wouldn’t apply to current gold operations, including Barrick Gold’s (TSX: ABX; NYSE: GOLD) Loulo-Gounkoto and B2Gold’s (TSX: BTO; NYSE: BTG) Fekola assets. But until now, it was unclear what would happen to mines and projects in other mining sectors.

Kodal Minerals said Mali’s National Directorate of Geology and Mines has confirmed its license to mine the Bougouni lithium project, which allows the company to continue the asset’s phased development.

The British company said the dense media separation (DMS) plant at the Ngoualana deposit is almost completed, after which it will work on the future flotation operation.

“Kodal and key Hainan representatives have met in Mali to meet with government officials and undertake site visits in preparation for the commencement of development,” chief executive Bernard Aylward said in the statement.

The Phase 1 DMS development plan provides a fast-track pathway to lithium concentrate production at an expected construction timeline of around 12 months, Kodal said.

Phase 2 will see the construction and commissioning of the down-stream flotation plant, it noted. 

Kodal is competing with Australia’s Leo Lithium (ASX: LLL) to bring Mali’s first lithium mine to production. Kodal received its license in late 2021, while Leo Lithium — now backed by China’s Ganfeng Lithium — was awarded the right to develop the Goulamina asset in August 2019.