Burkina Faso’s Junta Considers Mining Permit Cancellations and Taking over Gold Mines

SEATTLE (Scrap Monster): Burkina Faso, one of Africa’s leading gold-producing countries, is reported to be considering removing mining permits from some foreign investors.

Already considered one of the more politically risky West African nations, Burkina Faso’s military junta is reportedly planning to take over mining operations at a number of projects.

Reuters has reported that junta leader Ibrahim Traoré announced the government’s plans over the weekend, saying the country will seek to produce more of its own gold.

 No specifics yet

The names of the companies whose mining permits would be withdrawn were not revealed.

Reuters named London-listed Endeavour Mining, Australia-based West African Resources (ASX: WAF), Russia’s Nordgold and Canada’s Orezone Gold as companies currently operating in Burkina Faso.

West African Resources has a 90% interest in the Sanbrado gold project – with the government of Burkina Faso holding the remaining 10% – and poured its first gold at the project in March 2020, six months ahead of schedule.

Political turmoil

Political instability has impacted the nation’s output following a military coup in 2022 that overthrew Lieutenant Colonel Paul Henri Sandaogo Damiba, after which Captain Traoré was sworn in as the new transitional president.

The country has since severed long-standing ties with some western allies and sought closer relations with Russia.

The economy is estimated to have grown by 3.2% in 2023, up from 1.5% in 2022, with the services sector – accounting for 48% of GDP – the main growth driver, fuelled by an expansion of the public sector.

However, the threat of further political issues is said to be a factor in the nation’s declining gold production over the last 12 months.

Gold output decline

The nation’s Ministry of Mines, Quarries and Energy has reported that gold output fell 1.5% in 2023 to 57,300 kilograms.

Production reached an all-time high of 67,126kg in 2021, up from the 2002 low of 209kg.

Artisanal and small-scale mining is the primary source of income for a large part of the country’s population, with over 430,000 people directly employed at more than 440 mine sites.

 Courtesy: www.smallcaps.com.au