Following the Council of Ministers meeting on March 20, 2024, the Minister of Mines, Yacouba Zabré Gouba, announced the withdrawal of industrial gold mining permits in Inata and manganese in Tambao. These highly coveted permits had been awarded to the Afro Turc company through direct negotiation procedures in April 2023, a process that sparked debate in the public sphere.
To explain the withdrawal of these permits, Burkinabe authorities have cited the non-payment of dues by the company. The company has never paid the granting fees that were supposed to follow the contract signing, the Mines Minister stated in his address.
Despite several reminders and a 90-day notice, the “company has still not complied”.
Investments
The exact amount owed is not specified. However, contracts signed last year amounted to 30 billion CFA francs, approximately 45 million euros at present.
The company also committed to investing billions in infrastructure and military bases. A new bidding process may indeed reopen the competition for these particularly coveted permits.
With a projected budget deficit of over 6% of GDP for 2023 and a public debt exceeding 60% of GDP, the withdrawal of these permits comes in a constrained economic context.
Maximizing Resources
Burkinabe authorities need to maximize their resources. Gold accounts for nearly two-thirds of the country’s total export revenue and contributes to 12% of GDP, according to official figures. Gold is therefore particularly crucial given the record prices of this precious metal. Financial returns from the Inata mine were already estimated by authorities last year at 51 billion CFA francs, or over 80 million euros.
To boost foreign currency inflows, the government is thus pursuing various initiatives: constructing a gold refinery, awarding new mining permits such as that of Toega, and increasing the mining royalty on gold production.