Burkina Faso has revised its mining code to enable it to take more in royalties in boom times after gold production fell.
The West African nation increased the minimum royalty rate for spot price above $1,500 an ounce to 6% from 5%, the military government said in a decree seen by Bloomberg. The rate will rise to 6.5% for spot higher than $1,700 to $2,000 and further to 7% for spot above $2,000, it said.
Gold output in one of Africa’s biggest producers dropped 13% to 58.2 tons in 2022, according to government data. At least five mines closed down amid deteriorating security followed by two coups that year.
While the stake the state can take in mining operations is regulated by stability clauses, there are no such provisions for royalties, which apply to all existing and new contracts.
A spokesperson for Endeavour Mining Plc, Burkina Faso’s largest gold producer, declined to comment. Miners in the country, including Iamgold Corp. and Nord Gold SE, are faced with a constantly volatile security situation as the ruling junta battles a mounting Islamist insurgency. Military leader Colonel Ibrahim Traore came to power in September 2022 after toppling the regime of fellow soldier Colonel Paul-Henri Sandaogo Damiba, who seized power in January of the same year.
Traore’s pledge to restore control over territories lost to the militants has seen attacks by armed actors continue unabated.
International partners such as the US and France have suspended aid and budgetary assistance following the coups.
Source: Bloomberg