Burkina Faso, responding to a dip in gold production, has amended its mining code to secure higher royalties during profitable times.
The country’s military government declared an increase in the minimum royalty rate for spot prices above $1,500 an ounce, adjusting it to 6% from the previous 5%. This rate climbs to 6.5% for prices between $1,700 and $2,000 and reaches 7% for prices exceeding $2,000, according to an official decree.
In 2022, gold production in Burkina Faso, a leading African producer, witnessed a decline of 13%, with the output dropping to 58.2 tons. This setback came as a result of worsening security conditions, leading to the closure of at least five mining operations. The nation also grappled with two coups within the year.
Although stability clauses bind the government’s stake in mining ventures, royalties remain unregulated, affecting both existing and new contracts.
Endeavour Mining, the country’s predominant gold producer, opted not to comment on the situation. Other significant miners, such as Iamgold Corp. and Nord Gold, navigate a persistently unstable security environment.
According to a report by Mining Weekly, the nation’s current military leadership, under Colonel Ibrahim Traore, contends with a rising Islamist insurgency. Traore, who assumed power in September 2022, succeeded Colonel Paul-Henri Sandaogo Damiba, another military figure who had taken control earlier that year.
Despite Traore’s commitment to reclaim territories from the militants, the onslaught from armed groups persists. The coups have also resulted in international consequences, with major allies like the US and France halting aid and budgetary support.
