Mali Gains Control of Explosives Supply Chain with Chinese Partner
The government of Mali has taken a significant step towards strengthening its control over the explosive supply chain. This new initiative involves a 51% ownership stake in an explosives manufacturing joint venture with the Chinese company Auxin Chemical Technology. The decision aims to enhance state oversight and reduce dependency on imported explosives.
Mali’s Strategic Partnership with Auxin
The joint venture, named FARATCHI-CO SA, will produce explosives primarily for civil use in gold and lithium extraction, as well as quarry operations. This move aligns with Mali’s 2023 mining code aimed at increasing state equity and advocating for local content requirements.
Details of the Joint Venture
- Ownership Structure: Mali holds 51% of FARATCHI-CO SA, while Auxin retains 49%.
- Funding and Expertise: Auxin will facilitate the construction of the plant within a year, providing necessary financial backing and technical expertise.
- Current Operations: Auxin already supplies explosives to six African countries and is supported by the Chinese state-owned NORINCO Group.
With this partnership, Mali aims to enhance the security and reliability of its explosive supply, addressing critical bottlenecks that currently affect mining operations amidst growing regional insecurity. This initiative is crucial given that explosives are indispensable inputs for the country’s extractive industries, which significantly contribute to export revenues and tax income.
Implications for Mali’s Extractive Sector
The establishment of a local explosives manufacturing facility is expected to lessen reliance on external sources, thereby mitigating import delays and border disruptions. This offers a robust solution to security challenges faced by landlocked nations like Mali.
Vision for the Future
- Geopolitical Context: The initiative reflects a larger trend in the Sahel region, where countries like Mali, Burkina Faso, and Niger are increasingly turning towards China and Russia for strategic industrial partnerships.
- Market Stability: State control over the explosives sector may also enhance monitoring of dual-use materials, which could deter illicit use.
- Investment Considerations: While the increased state involvement may reassure local stakeholders, it may raise concerns among international investors regarding governance and stability.
The overall strategy positions Mali to examine whether a fusion of state ownership and Chinese technical expertise can revitalize its mining sector in light of fluctuating geopolitical dynamics in the Sahel.
