* Gold, cotton output seen rising despite Mali coup and
* Unlike neighbours, main industries appear shielded from
* Cracks appearing as aid, investment slows
By Joe Penney
BAMAKO, Sept 17 In the afternoon of March 21,
army mutineers stormed the office of Mali's national cotton
company CMDT in central Bamako and fired AK-47 rounds into the
When the dust cleared, the soldiers - who were angry about
how the government was handling a northern rebellion - realised
they had made a mistake: they'd meant to take over the state
television headquarters next door. And so they left.
The CMDT's offices still bear the bullet holes from that
day, which marked the start of a crisis in the West African
state that toppled an elected president and paved the way for
Islamists to wrest control of the north.
But the chaos that erupted in the months since the military
staged a coup d'etat has left the country's twin economic
engines - the cotton and gold industries - essentially
untouched, in contrast to the vast economic damage caused by
coups and conflicts in West African neighbours like Guinea and
Africa's top cotton grower and its third-biggest gold miner
behind South Africa and Ghana, Mali is expected to produce more
cotton and gold in 2012 than it did last year, helping to
accelerate economic growth to around 6 percent and bridge a
budget gap left by frozen foreign aid since the coup.
The resilience of the two industries may be small
consolation to many ordinary Malians suffering from widespread
insecurity and food shortages in one of the worst periods in the
But it is a relief to an interim government seeking to fund
what is likely to be a costly and prolonged recovery, as well as
the millions of agriculture workers and handful of international
mining investors who depend on them for their livelihoods.
The situation is largely a trick of geography. Most of
Mali's plantations and mines are in the south, far from the
rebel-held northern desert, and sheltered from political turmoil
in the capital.
POLITICAL, NOT ECONOMIC, DISCORD
A vast, remote desert region that has long been cut off from
the south by geography, northern Mali is now in the hands of a
patchwork of Islamist fighters and the ethnically distinct
Tuareg separatists, who have long complained that the central
government in Bamako in the south discriminates against them and
More than half a million people in the region need aid to
cope with rising food prices, collapsed public services and a
lack of health care since the crisis started, according to the
International Committee of the Red Cross.
Tussles between the transitional Malian government charged
with organising new elections and the military leadership, which
seems reluctant to cede control, continue to bog down schemes to
dislodge al-Qaeda-linked rebels.
But in the south these disputes have limited themselves to
politics, not economics.
Mali's cotton sector, which according to CMDT data directly
employs four million of Mali's 15 million people, has weathered
the crises fairly well.
"The cotton sector has not felt any direct impact from these
events," CMDT CEO Salif Abdoulaye Cissoko said in an interview
at the company's headquarters.
Cissoko estimated the cotton seed crop in 2012-2013 at a
minimum of 500,000 tonnes, up 50,000 tonnes from the year before
thanks to the good seasonal rains boosting all of Mali's
agricultural sector, which including cotton farmers accounts for
roughly 70 percent of the country's labour force.
Gold production, which provides about 15 per cent of Mali's
GDP, has stabilised as well.
The days following the coup saw a sharp drop in the stocks
of Canadian and South African firms operating in Mali like
Randgold, AngloGold Ashanti and Avion Gold
Corporation. But the sector has since rebounded and
2012 national gold output estimates stand at 50 tonnes, said
consultant Alhousseini Abba Maiga, against 43 tonnes in 2011.
"The immediate effect of the coup d'etat was felt at the
stock market, and a few weeks after we noted a recovery that was
quite reassuring," said Maiga, a consultant to Canadian and
South African mining companies. "Ultimately the crisis was not
as bad as people thought."
A 2008 coup in Guinea, by contrast, triggered a steep
decline in bauxite exports from the No.1 world supplier of the
raw material in aluminum. A civil war in Ivory Coast last year
shut its port for months and ground the economy to a temporary
The crisis in Mali has complicated travel, particularly in
the north, but the roads south to the coast are unobstructed,
allowing free movement of the country's exports.
While Mali's economy has proven more robust than some
anticipated, there are worries that if the country can't solve
its political and security problems soon, a decline in foreign
aid and new investment will accelerate.
The caretaker government in June said it expected a revenue
shortfall of more than $1 billion due to suspended budget
support from foreign partners like the United States and the
European Union since the coup.
And while gold mines that were already in production or
slated to go into production before the coup are going ahead,
publicly listed exploration companies have all but abandoned
Mali because of the inability to attract investment from Canada
and the United States due to perceived security problems.
"We've seen the most problems with exploration companies,
because these companies need foreign investment. And when
investors are cautious, naturally this will have an immediate
impact on exploration," Maiga said.
The CEO of one joint Malian-Canadian exploration company
that recently decided to shut its operations in Mali said that
foreign investors have backed off new exploration projects since
"In a country like Mali, where a coup d'etat happens, and
half of the country is controlled by rebels, people will not
have confidence to invest," said the executive, who asked not to
be named. "Mali is not credible for investors any more, and we
can't really work."
Randgold, the most bullish miner operating in Mali, has
repeatedly brushed off those concerns.
"Our operations in Mali performed as planned despite the
challenges... We have had no threats from anybody around
disrupting our business," Randgold CEO Mark Bristow said in a
recent earnings conference call, speaking from the United
Mali's tourism industry, concentrated in the areas around
Mopti region, which today forms the border between government
and jihadist-held territory, was already in decline before the
coup over security concerns, and has now completely collapsed.
Tourism provided about 5 percent of Mali's GDP before the
security crisis, according to USAID.
Djenne, a UNESCO World-Heritage site famous for its
Sudanese-style architecture, has received less than 20
international visitors since February, compared to the more than
30,000 tourists who arrived in its best year in 2005, said
Amadou Kouressi, director of the tourism board in the city.