Monday, March 26th 05:29 PM IST

Mali gold production hit hard by Tourareg coup

# Mali gold  # Tourareg coup  # gold revenue  # African Union  

Gold is Mali's main revenue earner as the country produces around 50 tons of gold each year. Gold currently accounts for around 20 percent of gross domestic product and about 70 percent of exports in desert nation.

BAMAKO(BullionStreet) : Gold production in Mali, Africa's third largest gold producer, remained in doldrums ever since the Touareg rebels seized power in a coup last week.

Although mining works continued in most sites, the atmosphere became sombre after the news broke out as investors are holding their breath and feared a take over after rebels said the country's constitution had been temporarily suspended.

Shares in gold mining companies plunged as a result of the coup, though operations have not been interrupted as the coup events are limited for now to the capital.

Gold is Mali's main revenue earner as the country produces around 50 tons of gold each year. Gold currently accounts for around 20 percent of gross domestic product and about 70 percent of exports in desert nation.

Some of the world's leading gold miners are operating in the West African nation that includes Randgold Resources and Avion Gold Corp.

Mali has joined the Extractative Industries Transparency Initiative (EITI) as part of efforts to improve accountability in its mining sector.

Other mining companies with exposure to Mali include: AngloGold Ashanti Ltd, African Gold Group Inc, Avnel Gold Mining Ltd,Cluff Gold Plc, Endeavour Mining Corp.

The immediate fall-out of the coup has seen France end its security cooperation with Mali and the US and the African Union condemn the mutiny.

Observers however said it is likely to change as the dust settles and as it become clearer if President Amadou Toumani Toure has been ousted for good. Presidential elections were planned for April, so the coup's timing was purposeful on this level as well.

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