Welcome to Burkina Faso
Overview of Resources
Welcome to Burkina Faso
Burkina Faso is a landlocked country that is located to the north of Ghana in Western Africa. The total area of the country is 274,200 km2, and it has a population of 17,275,115 as of July 2012. The country’s climate is tropical.
|The national flag of Burkina Faso.
Image Credit: CIA Factbook.
Since gaining independence from France in 1960, Burkina Faso had to deal with several military coups, which has resulted in political instability and lack of proper governance. A growing population is another problem faced by this country.
The majority of Burkina Faso’s population is engaged in agricultural activities, and the economy of the country is dependent on the revenues from gold and cotton exports. The GDP of Burkina Faso was $22.32 billion in 2011.
The natural resources of Burkina Faso are limited and include gold, manganese, limestone, and marble. Phosphates, pumice, and salt are also available in small quantities. The mining sector of the country is currently undergoing a big change as nearly 60 international companies are conducting various mining activities in Burkina Faso.
Overview of Resources
Burkina Faso’s mining sector is likely to play a key role in the country’s economy in the near future with the gold mining industry all set to expand. This year, the country’s mining sector will be able to generate an increased revenue of about $2 billion from the $1.4 billion revenue in 2011.
Exploration activities for copper and zinc are also being carried out.
The map of Burkina Faso. Image Credit: CIA Factbook
In 2010, gold production increased by nearly 83% to 24,104 kg compared to 13,181 kg in 2009. Burkina Faso is currently the fourth largest gold producer in Africa, and the third most explored region in the African continent. Recent reports speculate that there may still be several more gold reserves in the northern regions, which is yet to be explored.
All these discoveries have made Burkina Faso a favorite destination for international companies. The following is the list of companies involved in mining gold in Burkina Faso:
- IAMGOLD Corp.
- Semafo Inc.
- Channel Resources Ltd.
- High River Gold Mines Ltd.
- Goldrush Resources Ltd.
- Orezone Gold Corp.
- Volta Resources Inc.
- Riverstone Resources Inc.
- Avocet Mining plc of UK
- Cluff Gold plc of UK
- Goldplat plc of UK
- Ampella Mining Ltd.
- Gryphon Minerals Ltd.
- Middle Island Resources Ltd.
- Mt. Isa Metals Ltd.
- Carbine Resources Ltd.
Volta Resources Inc. owned the prospecting license for Gaoua copper-gold project comprising the Gongondy, the Bouserra, the Dienemera, and the Mt. Biri prospects. The initial estimation of reserves at Gaoua amounted to about 82.6 million Mt of ore.
The Essakane Mine owned by a subsidiary of IAMGOLD produced 4,230 kg while the Inata open pit gold mine owned by Avocet produced 4,284 kg in 2010. The government of Burkina Faso owned 10% interest in each of these mines. Avocet planned to increase its production to 5,100 kg/year.
In the same year, output from the Kalsaka Mine owned by Kalsaka Mining S.A. increased to 2,302 kg in comparison to 1,693 kg in 2009 as the capacity of the plant was increased from 1.2 to 1.6 Mt/yr.
The Bissa-Zandkom gold mine, which a joint venture between the government of Burkina Faso and Nordgold (NGOLY.PK) of Russia, will begin its initial production this December.
The Kiere Mine was owned by AMC Corp. of USA via its subsidiary Burkina Manganèse S.A. The mine is expected to have about 600,000 t of manganese ore reserves.
By 2015, the country will likely have two more mines in operation digging for zinc and manganese. The zinc mine is a joint venture between Blackthorn and Glencore (GLEN.L).
The government of Burkina Faso encourages privatization and has revised the investment code to attract foreign investment in 2004. In 2010, corporate income tax rate was reduced from 30% to 25% and tax on dividends from 12.5% to 7.5%. Similarly, by the end of this year, the old mining code will be revised to equally favor both the state and the mining companies. All this has made the environment conducive for global companies to invest and operate in the country.
Burkina Faso is now buzzing with mining activities, especially in the gold sector, and the economic growth forecast for the next year is reported to be 7%.
However, environmental activists are claiming that gold mining especially in Burkina Faso's northern Séguénéga region is damaging not only the environment but also the social structure. Vegetation is being cleared to make room for mining activities and left barren. The government will have to come up with solution for this issue so as to safeguard its people from the hazards of rampant mining activities.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.