By: Ecofin agency

Moroccan company Managem has commissioned its first gold mine in Senegal. The announcement of its successful launch on Tuesday coincided with a new peak of over $3,500 an ounce for the yellow metal on international markets, a symbol of how rising gold prices have contributed to the growth of Senegal's gold sector in recent years.

Until now, Senegal's gold production relied mainly on the Sabodala-Massawa complex, operated by Endeavour Mining, and the Mako mine, run by Australia's Resolute. In 2024, their combined production fell by about 15% year-on-year to 352,935 ounces, according to data from the two companies. The start of operations at the country's third industrial mine will therefore boost supply amid exceptionally high prices. According to Managem, the Boto mine should deliver about 5 tons of gold per year over the first three years, nearly half of Senegal's industrial production in 2024.

The momentum is expected to continue with new projects. Fortuna Mining is preparing to build the Diamba Sud gold mine, with an estimated investment of 150 billion XOF ($268 million). A delegation from the company, led by CEO Jorge Ganoza, was received last week by President Diomaye Faye. Fortuna Mining indicated it has invested more than 30 billion XOF in exploration over the past two years on the project.

This investment led to a mineral resource estimate published by Fortuna Mining in August, which announced a potential of 1 million ounces (28.6 tons of gold) at Diamba Sud. Also in exploration, Thor Explorations estimates its Douta project hosts 1.7 million ounces of indicated and inferred mineral resources. The company plans to spend between $5 million and $7.5 million on exploration this year, including for the Douta project.

"It’s the ‘gold rush’ effect," said Oliver Blagden, a gold analyst at British firm CRU, when interviewed by Ecofin Agency about the state of gold exploration in the West African sub-region. “When prices go up, everyone rushes to find gold."

As Sahel countries are increasingly considered risky for investors, Senegal is emerging as an alternative in West Africa. Industrial-scale mining began there only in 2009 at Sabodala-Massawa, and the potential remains significant. However, the momentum will depend on both the evolution of gold prices and the stability of the regulatory framework.

Several analysts, including from Goldman Sachs and Citi, anticipate new records in the coming months, with a possible peak of $4,000 an ounce by 2026. On the regulatory front, the Senegalese government has already repeatedly mentioned a review of extractive contracts, including in the mining sector. While non-consensual revisions of mining codes in Mali and Burkina Faso have caused tensions with companies, it remains to be seen what reactions such changes would provoke in Senegal.