ANNE MIMAULT and HELEN REID, of Reuters, report on the impacts of a Islamist insurgency and political instability in Burkina Faso…
Ouagadougou, Burkina Faso
Reuters
A gold mining boom in Burkina Faso over the last decade propelled Boukary Diallo from being a vendor on a market stall to running a meat business supplying a mine near Ouahigouya, his home town in the north of the country.
But as the West African country loses territory to Islamist militants and lurches from coup to coup, threatening to turn the boom to bust, Diallo is concerned he will be unable to retain all of his ten employees.
“Things are getting tight,” Diallo, 42, told Reuters by phone. “If the mine doesn’t start up again in December, I will have to let some people go.”
An excavator driven by Rosalie Guirou Kulga, 30, clears out rocks into a dumper at the gold mine, operated by Endeavour Mining Corporation in Hounde, Burkina Faso on 11th February, 2020. PICTURE: Reuters/Anne Mimault/File photo.
Karma mine, which Diallo supplies, was closed in June after a militant attack that left one worker and one soldier dead.
Acquired by Burkina-based firm Néré Mining from Endeavour Mining in March, Karma is one of at least four gold mines that halted production this year because of security risks.
“Things are getting tight. If the mine doesn’t start up again in December, I will have to let some people go.”
– Boukary Diallo, who runs a meat business supplying a mine near Ouahigouya
Russia’s Nordgold in April stopped mining at Taparko, saying the lives of its staff were in danger.
The economy is also at risk.
Gold is Burkina Faso’s main export, accounting for 37 per cent of total exports in 2020, and mining is a leading source of jobs.
For each person directly employed by a mine, there are three or four contractor and services workers, the national association of mining contractors estimates.
Diallo’s business, which had revenues of 100 million CFA francs ($US151,399) in 2019, has been making barely four million CFA francs a month since the Karma mine shut, he said. The conflict has also stoked inflation, making livestock more expensive.
The decline in Diallo’s fortunes is reflected at the national level.
At current rates, Burkina Faso is set to produce 13 per cent less gold this year than in 2021, in part because of mine closures, government statistics show.
The start of production at Orezone’s Bomboré gold mine in late September was an exception to the trend.
In the nine months to end-September – the most recent period for which data is available – the country produced 43.651 tonnes of gold, down from 50.126 tonnes over the same period last year.
“We see the gold industry declining in Burkina over the next five to ten years,” Richard Hyde, executive chairman and CEO of West African Resources told Reuters.
Security risks mean little exploration is happening, he added, saying West African Resources was one of the few companies to be exploring and planning a new mine.
The Burkina Faso mines ministry did not respond to Reuters’ questions.
This year is on track to be the deadliest for the country since the Sahel crisis began more than a decade ago, according to the Armed Conflict Location and Event Data Project.
The al-Qaeda-affiliated Jama’at Nusrat al-Islam wal-Muslimin (JNIM) carried out more than 400 attacks across ten of Burkina Faso’s 13 regions in the first half of the year.
The conflict has also triggered political crises in the country, with two military coups this year.
Staff safety helmets are seen at the entrance of the gold mine site, operated by Endeavour Mining Corporation in Hounde, Burkina Faso, on 13th February, 2020. PICTURE: Reuters/Anne Mimault/File photo.
Despite the instability, miners have managed to get people and supplies in and out of the country, said Sean Fieler, chief investment officer at Equinox Partners Investment Management LLC, who visited mines in Burkina Faso in July.
However, he said, “two coups within 12 months is not a good thing, I don’t think anyone would argue otherwise”.
Equinox Partners, through its funds, holds a 4.4 per cent stake in West African Resources, a 0.2 per cent stake in Endeavour Mining, and also invests in Orezone.
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Sebastien de Montessus, CEO of Endeavour, Burkina Faso’s biggest gold producer, said: “We remain committed to the country and ensuring our presence continues to provide economic benefits to our employees, contractors, suppliers and host communities”.
In Burkina, 20 per cent of the mining royalties collected by the state and one per cent of mining company revenues go into a state-managed Local Development Mining Fund (FMDL) that finances development projects in mining communities and elsewhere.
In the first half of 2022, contributions to the fund fell by nine per cent from the same period last year, mines ministry reports show.
“When mines close, the whole country loses out,” said Julien Baudrand, senior vice president for sustainability at Fortuna Silver, which runs the Yaramoko gold mine in Burkina Faso.
