Toubani Resources, an Australia-listed mining company focused on developing gold projects in West Africa, has begun construction of its Kobada project in Mali, betting on strong global demand for gold despite rising political and regulatory risks in the country.

The $216 million project is part of a broader wave of mining investments across West Africa, where companies are seeking to increase gold supply as investors turn to the metal as a safe-haven asset amid global economic uncertainty.

Toubani approved the investment after securing key permits from the Malian government, including environmental and infrastructure approvals, and finalising an agreement that sets out the state's participation in the project.

The company said about 40 per cent of the capital required has already been committed.

Construction is now underway, starting with early-stage work such as ground preparation for the processing plant, tailings storage facility, water dam and accommodation units. Equipment needed for gold processing is also being shipped to the site.

The company expects first gold production by the third quarter of 2027, with annual output projected at around 162,000 ounces.

Managing Director Phil Russo said the start of construction marked a major milestone, describing it as "the transition from detailed preparation and planning into the next phase of development."

Mali is one of Africa's largest gold producers, with output of about 60 tonnes a year, making it an important supplier to global markets. But the country has also tightened control over its mining sector in recent years as it seeks to capture more value from natural resources.

Under a mining code introduced in 2023, the government can increase its stake in mining projects to as much as 30 per cent. Officials say the reforms are aimed at improving transparency, strengthening local participation and ensuring greater economic benefits.

The tougher regulatory environment has made some investors cautious, especially following recent tensions between authorities and international mining companies operating in the country.

Despite these concerns, activity in Mali's gold sector has remained strong. Existing operators are expanding production, while new projects are being developed and older mines are being revived, reflecting continued investor interest in the country's long-term potential.

Toubani said it has engaged local communities around the Kobada site, including traditional leaders, as construction begins, a move aimed at maintaining support for the project.

Analysts say Kobada could strengthen Mali's role in global gold supply if completed on schedule. However, they note that the project's success will depend not only on execution, but also on how well the company navigates regulatory changes and geopolitical risks.