For a decade, gold exploitation, legal or illegal and official or informal, has known a speedy expansion throughout the Sahel. Its actors are numerous and range from Canadian and Russian multinationals to small informal local operators. Financial incomes and especially jobs creations, even dangerous ones, are considerable for all: private companies, governments and small operators as well as their equipment suppliers often from Middle East. More than other industrial activities, gold mining in the Sahel has a confirmed impact on the health of workers and on the environment. This is especially true of its informal activities. The wells, dug to reach the ore as well as the use of mercury to separate gold from the rock, are mortal and lasting dangers for all: people and nature. For many observers this informal gold exploitation has obvious links with radical groups. Faced with multiple international controls on financial transfers, they therefore have found sources of a local, sustainable and unrestrained funding. Thus, destabilizing the formal local gold exploitation gives them more space and freedom to access local sources of revenues far from the many national and international controls or surveillances of money transfer. The recent murderous evasion of four terrorists from Nouakchott main civilian prison, already a privilege, is a latest power demonstration of these groups various and powerful networks in the Sahel. The paper below, on gold mining in Burkina Faso, shows the importance of this mineral precious but not only for governments and private companies. – Ahmedou Ould Abdallah, President, centre4s.org
Burkina Faso: Insecurity and gold production falling by 13%
Gold has been Burkina Faso’s main export product since 2008. This metal represented 77.4% of its exports in 2021, or 2,172 billion FCFA. Its production fell by 13.73% in 2022 compared to 2021, from 66.8 tons to 57.6 tons. Main reason: the closure of five industrial mines out of the seventeen in the country, for reasons related to the security context. Therefore, terrorists have chosen to hit Burkina Faso in the wallet. Securing the mining sector is now part of national concerns.
In Burkina Faso, the mining sector development has been carried out thanks to the intensification of investments and the opening of industrial mines accompanied by a change in the legislative and regulatory system. Indeed, Burkina Faso’s export earnings are mainly made up of mining and agricultural products. Gold comes in first place, with a value of 2,172 billion FCFA, or 77.4%. In second and third places are cotton (9.0%) and zinc (3.1%). The 2 mining products, gold and zinc, represent approximately 80.5% of export earnings. The other main exports are essentially made up of oilseeds, in particular cashew nuts (2.3%), sesame (1.2%) and shea kernels (0.8%). Exports have increased from 518 billion FCFA in 2020 to 2,806.1 billion in 2021. In 2021, exports were estimated at 2,612.5 billion against 2,405.4 billion FCFA in 2020 and trade balance showed a surplus of 193.6 billion FCFA, thanks to the rise in the prices of these basic products. The mining sector contributed 14.3% to state revenues in 2020.
Burkina Faso, a gold mining power
In 2015, under the post-insurgency Transition regime, the Local Development Mining Fund (FMDL) was established, funded from two sources. The first is the state contribution of 20% from royalties paid by mining companies. The second is the mining companies’ contributions to the development of their localities, on the basis of their mining project(s) in the production phase, and the holders of exploitation permits for excavation substances, up to 1% of their monthly turnover. Entering its operational phase two years later, the FMDL has made it possible to mobilize, between 2017 and the first half of 2022, approximately 144 billion FCFA to the authorities of the thirteen regions and 651 municipalities of the country.
From analysis of the reports content on the use of these revenues, many of them were transferred to populations as well as to the State decentralized structures and used for investments in water and sanitation, education, health, public infrastructure and income-generating activities. Mining production essentially concerns gold, which exists almost everywhere throughout the national territory. Alongside the development of the gold industry, the practice of gold panning has also experienced strong growth in recent years. In 2022, the authorities estimated that more than 1.3 million people – or around 6% of the population – work on some 700 artisanal mining sites most often outside any government control. Insecure, these sites are regularly targeted by armed groups. They are also a fertile recruiting ground for them. Burkina Faso is ranked fifth gold producing country in Africa, after Ghana, South Africa, North Sudan and Mali. Therefore gold power.
Mining in great danger.
Despite this contribution to development, the mining sector is threatened by armed terrorist groups. Already in November 2019, a convoy from the Boungou mine, located in the province of Gourma, an eastern region, was the subject of a terrorist attack, with a death toll of 40 peoples. Terrorists even tried to recover this industrial mine. Armed groups operate some artisanal mines to finance their activities, according to a report by the Economic and Social Council of Burkina Faso. In September 2021, the Inata mine was attacked by around three hundred terrorists, who killed around fifty gendarmes. Over the period 2021 and 2022, five mines closed due to terrorist attacks: Youga, in the Center East and operated by Netiana Mining; Ouaré Mining Company in the Center East of the Canadian group Averoso Resources; Namissiguima in the North of Australian Riverstone Karma; Taparko in the Centre-North and Bouroum in the Centre-North, belonging to the Russian Nordgold. Insecurity increases mines operating costs and reduces taxable margins. The closure of these mines generates a shortfall in terms of state revenues. This is about 24.865 billion FCFA, at least. “This sum does not take into account the shortfall for the budgets of the communities which will no longer receive taxes on the areas, the patents, the mining fund for local development, etc. The 24.8 billion FCFA also does not take into account the loss of contracts for subcontracting companies at the local level who will no longer pay local taxes and employ local staff.
Decline in gold production.
Due to terrorism, gold production in Burkina Faso fell by 13.73%, from 66.858 tons in December 2021 to 57.675 tons to December 2022. Consecutively, there is also a drop in the level of recovery, the loss of jobs, reduction in household income, the risk of increased organized crime and the rallying of artisanal miners to armed terrorist groups. According to the Ministry of Mines, “at least 2,500 employees” have been unemployed since the closure of “five industrial mines”, out of the seventeen in Burkina Faso.
Another clarification: « In addition, due to a probable connection between artisanal mining and the financing of terrorism, the government decided, following the Council of Ministers of April 27, 2022, to temporarily close the sites gold panning throughout the national territory », explains this ministry. For the Burkinabè authorities, these measures aim at reducing the trafficking of explosives on these artisanal sites, which are often diverted to the benefit of armed terrorist groups. They are also intended to dry up these terrorist groups sources of income. In reality, the process takes time, and artisanal miners resist. The last closures took place on March 1, 2023 in the Mouhoun loop, i.e. forty artisanal gold mining sites.
However, the authorities are tearing their hair out over officially closed industrial mines. For example, the large mines of Inata and Tambao, all located in the country north, have not been in operation for more than 5 years, following the difficult security situation but « nothing proves that these mines are not exploited today by the nation enemies who are strengthening themselves in terms of resources to come and attack our defense and security forces”, fear the authorities. Before the next resumption of activities at the two mines, the transfer contracts provide for the construction of a military base on the spot, with the material and financial assistance of the partner. The National Office for the Security of Mining Sites (ONASSIM) was created by ministerial decree of December 18, 2013, to ensure the security of mining investments. It comes under the Ministry of Mines and Quarries. ONASSIM must: reassure the various stakeholders in the mining sector; ensure the protection of its infrastructure, equipment and personnel; contribute to operational intelligence; enforce the regulations in force with regard to mining; prevent social conflicts related to this sector activities; fight against all forms of insecurity and crime, including possible terrorist threats on mining sites. The Office, which should have 3,000 police and gendarmes, has barely around 500 agents. As a result, it only provides security on three sites out of 17. The other companies have signed security service contracts directly with the police or the gendarmerie. At the same time, the government adopted a battery of reforms to secure the mining sector: protection by the Defense and Security Forces (FDS) through the establishment of a dedicated security brigade, acquisition of sophisticated surveillance equipment and improved escort of mine site supply convoys, etc. The Ministry of Mines and Quarries has also not ruled out the idea of assigning some Volunteers for the Defense of the Homeland (VDP), civilian auxiliaries of the FDS, to securing gold panning sites.
To show how much Burkina Faso breathes with gold, in mid-February this year, the Transitional authorities requisitioned 200 kg of gold produced by a subsidiary of the Canadian group Endeavor Mining, for “public necessity”. A decision “dictated by an exceptional context”, according to the government spokesperson.
Faced with a decline in activity since 2022, the sector now fears that rampant insecurity will scare away foreign investors.