Capt. Ibrahim Traore, Burkina Faso’s President has announced plans to revoke mining permits from foreign companies and increase domestic gold production. The declaration which was made during a radio address commemorating two years since his rise to power through a coup, has sent ripples through the international mining community.
“We know how to mine our gold and I don’t understand why we’re going to let multinationals come and mine it,” Traore stated, emphasizing a desire for greater national control over the country’s mineral resources. While he did not specify which permits would be affected, the announcement has raised concerns among foreign mining firms operating in the country, including London-listed Endeavour Mining, Australia’s West African Resources, Russia’s Nordgold, and Canada’s Orezone Gold Corporation.
This potential policy shift comes at a critical time for Burkina Faso’s economy. Gold, the nation’s primary export, has been a crucial source of revenue amidst ongoing security challenges that have plagued the country. The mining sector’s importance is underscored by the fact that over 430,000 people are directly employed in artisanal and small-scale mining across more than 440 mine sites.
However, the country’s gold production has faced headwinds in recent years. The Ministry of Mines, Quarries and Energy reported a 1.5% decline in gold output for 2023, with production falling to 57,300 kilograms from an all-time high of 67,126 kilograms in 2021. This downturn is largely attributed to political instability following the 2022 military coup that brought Traore to power.
Since the coup, Burkina Faso has pivoted away from its traditional Western allies, instead seeking closer ties with Russia. This geopolitical realignment, coupled with the potential revocation of mining permits, signals a significant shift in the country’s approach to resource management and international partnerships.
Despite these challenges, the Burkinabe economy has shown signs of resilience. Economic growth is estimated to have reached 3.2% in 2023, up from 1.5% in 2022, with the services sector driving much of this expansion. However, the threat of further political upheaval continues to cast a shadow over the nation’s economic prospects.
As Burkina Faso contemplates this major overhaul of its mining sector, the international community watches closely. The potential withdrawal of foreign mining permits could have far-reaching implications for both the country’s economy and its relationships with international investors. How this bold strategy will unfold remains to be seen, but it’s clear that Burkina Faso is charting a new course in its pursuit of economic sovereignty and resource control.