BAMAKO (Reuters) - Mali has signed an agreement with China's Ganfeng Lithium to operate the Goulamina lithium mine and increase its share in the project in accordance with a new mining code, the West African country's economy ministry said in a statement.

The mining code, adopted last year, allows the military-led government to increase its ownership of mining projects and recoup what it says is a major shortfall in production revenue.

Mali's share in the Goulamina project will increase to 35% from 20%, according to the economy ministry's statement dated May 16 and seen by Reuters on Friday.

"With this win-win agreement, which defends the vital interests of the Malian people, the State of Mali enters into a new partnership with the Chinese group Ganfeng Lithium Co for the development and operation of the Goulamina lithium project," the statement said.

Ganfeng Lithium will set up a spodumene plant which will start production by the end of the year, it added.

Mali's Economy Minister, Alousseni Sanou, said earlier this week that the deal could bring Mali between 110 billion and 115 billion CFA francs ($191.51 million) per year.

Ganfeng Lithium bought Australia's Leo Lithium's 40% stake in the Goulamina mine for $342.7 million earlier this month.

Leo Lithium said at the time that the risks associated with operating in Mali and the impact of new mining code meant selling the stake was in the best interests of its shareholders.

($1 = 600.5000 CFA francs)

(Reporting by by Tiemoko Diallo; Writing by Anait Miridzhanian; Editing by Kirsten Donovan)