Mining groups exposed in Mali plunged on the stock market after the overthrow of Ibrahim Boubacar Keita by a military junta.

Nickel in Indonesia and New Caledonia, cocoa in Côte d'Ivoire and Ghana, copper in Chile… Commodity producers are always extremely sensitive to the political context. Mali, the third largest gold producer in sub-Saharan Africa, is a perfect example. When the leader of Mali was overthrown by a military junta on August 18, the shock wave was immediate for mining groups.

In the wake of the coup announcement, London-listed Resolute Mining lost 17.47% in Wednesday's session alone. B2Gold, for its part, faltered by 7.47% and Hummingbird Resources dropped 10.14%. The larger players operating sites in Mali, such as the Canadian Barrick Gold or the South African AngloGold Ashanti, have better cashed the explosion, with respective declines limited to 3.53% and 4.02%.

Continuation of activity

Resolute Mining, however, clarified that extractions from the Syama mine in southern Mali were continuing normally. Hummingbird says political unrest has no effect on production at the Yanfolia mine. The same goes for the Loulo-Gounkoto mining complex operated by Barrick Gold.

"A country where there have been two coups in a decade is not likely to reassure investors in the mining sector," Lori-Anne Theroux-Benoni, an analyst based in Dakar for the company, told Bloomberg. 'Institute for Security Studies. “I would be a little concerned about the level of risk and particularly about the rapid change of interlocutors at the Ministry of Mines. »

Border closure

Investors also take a dim view of the country's isolation caused by the coup. The soldiers who overthrew Ibrahim Boubacar Keita certainly ordered the reopening of the borders. But the Ecowas (Economic Community of West African States) asked its members to keep them closed. Such a decision prevents mining groups from exporting their gold for refining.

Clive Johnson, the boss of B2Gold is confident. The country's shutdown is expected to last "a few days or weeks, but not months", he told Reuters. The Fekola site, B2Gold's flagship mine, produced 147,424 ounces during the second quarter and the company claims to have enough inventory to ensure its deliveries at least until the end of the quarter.

Abundant stocks

"Due to the Covid, we have larger reserves than usual," explained the general manager. Containment measures and the cessation of air transport had disrupted the transport of the precious metal and led to the accumulation of gold.

Under the effect of negative real rates in the United States, gold prices soared to new highs at over 2,000 dollars an ounce to set a new all-time high at 2,060.60 dollars.