US$15m dispute emerges in Mali Bougouni lithium project

On 1 November, Mali's government and Kodal Mining UK (KMUK), operator of the Bougouni lithium project, finalized the mining licence transfer in response to new regulations safeguarding national interests. However, a dispute has surfaced between Hainan Mining and Kodal, the investors of KMUK, over a US$15 million payment to the Malian government.

KMUK is a joint venture where Hainan Mining holds a 51% controlling stake, and Kodal Minerals retains 49%. The Government of Mali has agreed to significant terms in transferring ownership of the Bougouni Lithium Project, enhancing its strategic interests while supporting the project’s development. The Malian government and local investors will acquire a 35% equity stake, in which 10% will be provided free of charge to the government, while the remaining 25% will be purchased for approximately US$4.3 million. Kodal Mining UK Limited (KMUK) retains operational control, reducing its stake to 65%.

The government also agreed to grant crucial permits and maintain tax exemptions during the construction and operational phases. This includes waiving import duties for essential equipment and materials. Additionally, KMUK and its subsidiary will pay US$15 million in taxes to Mali, in two equal installments by March 2025.

On 5 November, Hainan Mining said in its press release that Kodal shall cover the tax obligation based on previous financing agreements. Kodal responded on the same day, saying the payment responsibility lies with KMUK, the joint venture entity. Further negotiations and announcements are expected.

The Bougouni project is set to start production in early 2025, with an expected annual output of 125,000 tonnes of spodumene concentrate.