November 27, 2014 / 1:37 PM / in 5 years

Burkina Faso's transitional government to review mine permits

OUAGADOUGOU (Reuters) - Burkina Faso’s transitional government will review some mine contracts signed under former President Blaise Compaore, responding to concerns that exploration permits were granted 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, Gryphon and Roxgold.

The interim government’s decision follows similar reviews carried out by other African countries over the past decade — most notably in Democratic Republic of Congo and Guinea.

Both countries conducted reviews aimed at cancelling or improving mining deals deemed unfavorable to state interests. Other mineral-rich African countries, frustrated with lack of progress, have 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,” said Ba, a member of a cabinet appointed on Sunday.

“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.

A top civil servant at the country’s mines ministry clarified on Thursday that the revision would focus on exploration permits — the initial stage in any mine project. He said companies already in production would not be affected.

“It has to do with research permits only, and not those which are in operation,” said Emmanuel Nonyarma, Secretary-General of Burkina Faso’s mines ministry.

Compaore stepped down as president and fled the country last month in the face of a popular uprising after 27 years in power.

One of six army officers named to the transitional government, Ba said he would push ahead with existing plans to revise the mining code in order to encourage investment, at a time when miners are cutting back.

“We’re hearing that many mining companies are moving to neighboring countries and that will have a negative impact on our economy,” Ba said.

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 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.

Other Burkina gold miners include Amara Mining and Canada’s Endeavour Mining. 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

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