Burkina sees big boost from new mines, code: minister

Wed Sep 26, 2012 10:20am EDT
 
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By David Lewis and Mathieu Bonkoungou

OUAGADOUGOU (Reuters) - Seven new mines are expected to open in Burkina Faso and together with an improved mining code should double the sector's contribution to the country's economy in the coming years, the west African nation's mines minister said.

The new mining code, a revamp of a 2003 document that is due to be tabled in parliament by the end of this year, will benefit both the state and mining companies in equal measure, Salif Lamoussa Kabora told Reuters in Ouagadougou late on Tuesday.

The current draft of the law includes a 20 percent tax on the sale of licenses, a move that may hit expansion plans by miners operating in the country, which has attracted small and mid-sized companies.

Kabora said there would be a number of other changes to the tax system aimed at increasing government revenues from the sector but declined to give any further details.

Kabora said that the sector's contribution to the economy currently represents 12.7 percent of Burkina Faso's roughly $10 billion gross domestic product. But he said the figure was set to leap with the opening of the nation's eighth mine at the end of 2012 and another six mines in the coming years.

"If I look at the projections, with 14 mines it should come to 20-25 percent (of GDP). That is our aim," he said.

Miners already operating in Burkina Faso, one the world's poorest nations, include Avocet Mining Plc (AVM.L: Quote), Cluff Gold Plc CLUF.L and Blackthorn Resources BTR.AX.

The Bissa-Zandkom gold mine, a joint venture between Burkina Faso and Russia's Nordgold NGOLY.PK, is due to launch production in December.   Continued...