Interview: Burkina Faso's transitional government to review mine contracts

Renegade Gold

26/11/2014 16:38

* Burkina latest in a series of African countries to review 
deals 
    * New Burkina govt to revise mining code 
    * Discussing possible compensation to projects looted last 
month 
 
 (Adds negotiations over looting damages, quotes, details) 
    By Mathieu Bonkoungou 
    OUAGADOUGOU, Nov 26 (Reuters) - Burkina Faso's transitional 
government will review mining contracts signed under former 
President Blaise Compaore, responding to concerns that some were 
agreed in opaque conditions, new mines minister Colonel Boubacar 
Ba said. 
    Gold is the West African nation's top commodity and the 
country exported 32 tonnes in 2013. It had been expecting to 
increase output this year with new projects from developers 
TrueGold  TGM.V , Gryphon  GRY.AX  and Roxgold  ROG.V . 
    The interim government's decision follows similar reviews 
carried out by other African countries over the past decade 
after civil war or regime change -- most notably in Democratic 
Republic of Congo and Guinea. 
    Both conducted reviews aimed at cancelling or improving 
mining deals deemed unfavourable to state interests. Other 
mineral-rich African countries, frustrated with lack of 
progress, have also cracked down on unused concessions. 
    "It's a sector that has not always been transparent. I can 
assure you that concerning permits, we will revisit the 
contracts," Ba, a member of a cabinet appointed on Sunday, told 
Reuters in an interview.  
    "I have heard that there are people who have, on their own, 
50 to 60 permits that they are not exploiting. Often they resell 
them. We will put an end to that," he said on Wednesday. 
    Compaore stepped down as president and fled the country last 
month in the face of a popular uprising after 27 years in power. 
    Interim President Michel Kafando was chosen to lead the 
country to elections and he has pledged to end corruption. 
    One of six army officers named to the government, Ba said he 
would push ahead with existing plans to revise the mining code.  
    "We're hearing that many mining companies are moving to 
neighbouring countries and that will have a negative impact on 
our economy," he said. "We will discuss objectively with all our 
partners ... to make (the code) more attractive."  
    Gold leapfrogged cotton to become the landlocked country's 
main export in 2009. Gold prices have since tumbled, however, 
falling to fresh 4-1/2 year lows this month.  
    Hundreds of thousands of Burkinabes took to the streets in 
October to protest Compaore's plan to alter the constitution to 
extend his rule. Amid days of unrest that ended with his removal 
from power, a number of mining projects were looted. 
    Ba said the government had met firms to discuss damages. 
    "Instructions were given ... to evaluate the losses so that 
together we can make propositions to either pay damages or 
compensation," he said.  
    Other Burkina gold miners include Amara Mining  AMARA.L  and 
Canada's Endeavour Mining  EDV.TO . Pan African Minerals is also 
seeking to start production at its 100 million tonne magnesium 
mine at Tambao, in the country's northeast, in 2015. 
 
 (Reporting by Mathieu Bonkoungou; Writing by Joe Bavier; 
Editing by Matthew Mpoke Bigg and Clara Ferreira Marques) 
 ((joe.bavier@thomsonreuters.com; +225 07074101; Reuters 
Messaging: joe.bavier.thomsonreuters.com@reuters.net)) 
 
Keywords: BURKINA MINING/