Burkina Faso’s nationalisation of two gold mines, Boungou and Wahgnion, both in the resource rich Birimian-Greenstone belt, has been described in Pan-Africanist circles as a significant turning point in its struggle for economic independence and a reassuring proof that the move towards political sovereignty is in full throttle.
Ibrahim Traoré’s objective, it is believed, is inspired by much more than just reclaiming economic sovereignty. His approach also reflects a broader intention to break from the usual national economic patterns and a shift towards self-sufficiency. His actions aim to unlock government revenue and more resources for crucial sectors such as education, healthcare, and infrastructure.
Among its stated goals, which appears an echo of Thomas Sankara’s Pan-Africanist position, Burkina Faso’s administration has promised to assert control over its national resources.
This is part of an extensive programme by a government that has made it clear that it seeks the realignment of a distorted relationship between African states and their Western partners.
In February 2023, Traoré’s government expelled France’s military from the country. It followed that up, in November of that year, with the approval for the construction of Burkina Faso’s first gold refinery.
The World Gold Council’s 2023 figures say Burkina Faso is the 13th-largest gold producer in the world, producing about 100 tons, equivalent to about U.S. $6 billion in value, each year. Because of an exclusive control over most of the country’s gold by private corporations based in the West, the total annual GDP of the entire Burkinabè economy is only about U.S. $18 billion. In September 2023, it was reported, for example, that Canadian companies owned about U.S. $1.8 billion of Burkina Faso’s gold resources.
The acquisition of the two gold mines by the Burkinabè military junta is the latest in a wave by leaders in the three Sahel states under military rule to exert greater control over their natural resources. “We are going to get our mining licenses back,” Burkina Faso’s President Ibrahim Traoré stated earlier this year.
The Burkinabè decision replicates a move in June 2023 by the military junta in Niger when it stripped French state-owned giant, Orano, of its mining licence at the Imouraren mine, one of the world’s largest uranium mines, in the country’s north.
Mining firms in Mali, which include Barrick Gold, the world’s second-largest producer of the precious metal, are also faced with the possibility of the military-led government acquiring greater share of ownership of new projects under an updated mining code that was adopted last year. Burkina Faso revised its mining code last year to earn more royalties from mining companies following declining gold output as the long-running security crisis forced at least five mines to shut down.
The Burkinabè nationalisation process, some mining experts say, involved “renegotiating contracts with foreign entities and asserting more substantial control over the mining operations, directly impacting several international mining firms such as B2 Gold, Nordgold, and Endeavour Mining.”
contrary to a general perception that it involved the seizure of foreign Mining assets by the military authorities, the nationalisation was actually a well planned process that culminated in the August deal to nationalise the two gold mines for about $80mn, which the London-listed Endeavour Mining agreed in 2023 to sell to West Africa based Lilium Mining, a subsidiary of Lilium Capital, an investment vehicle founded by US-Burkinabe businessman, Simon Tiemtore, for more than $300mn. The price paid by Burkina Faso’s government was a fraction of this cost.
A long list of allegations against the Endeavour mining firm, related to exploitative practices in the region, has inadvertently spurred widespread support for the government’s decision also.
Who is Endeavour mines and what is its history in the region? The company is one of the world’s leading gold producers and the largest in West Africa. It is a UK based company that has mining assets in Cote D’Ivoire, Senegal, and Mali, valued at billions of dollars in the highly valuable Birimian Greenstone belt across West Africa. Natural resource wealth is going straight into the pockets of British and other western economies because of its operations.
Endeavour joined the scramble for the highly lucrative belt when it first acquired 90% ownership of the Boungou open pit mine in July 2020, as part of its acquisition of Canadian-based mining company SEMAFO, leaving the remaining 10% stake with the State of Burkina Faso.
The company also acquired a 90% stake in the Wahgnion mine as part of its acquisition of Teranga Gold in 2021, in which the State of Burkina Faso also kept the remaining 10% stake, comprising several open-pit operations.
There are also reports that the company has not only been exploiting Burkina Faso but also Senegal where it keeps 90 percent of the profit of its operations in the country, an issue that Senegal’s president, Bassirou Diomaye Faye, has vowed to address.
Somewhere along the line in its operations, Endeavour’s actions raised concerns in the mining sector in Burkina Faso and a number of other West African States. The company had come under scrutiny for its exploitative practices and illicit activities.
There was a pollution scandal surrounding the company where contaminated water from its gold mine in Cote D’Ivoire leaked into a river causing harm and poisoning 185 people, which it denied.
In Burkina Faso, in addition to its former chief executive Sébastien de Montessus being sacked at the start of this year for “serious misconduct, the company’s transactions raised concerns following the deal to sell its assets to Lilium mining. Endeavour Mining was accused of misleading Lilium Mining and overvaluing the two mines. As a result, Lilium Mining was reported to have withheld payment due to Endeavour Mining, keeping the two companies embroiled in court proceedings.
According to a Financial Times report, Endeavour launched arbitration in March against Lilium for missing payments, which then lodged a counterclaim a month later that alleged information was concealed and misrepresented about finances and operations at the two mines.
As part of the sales agreement with the government, all legal proceedings between both firms will be dropped. A statement released by Lilium stated that the company will transfer ownership of the two mines to the west African state, which will pay Endeavour $60millionn in cash. Burkina Faso will also pay a three per cent royalty on up to 400,000 ounces of gold sold from Wahgnion, the statement said, a provision that analysts estimated was worth $20mn.
The ongoing exploitative relationship between Western powers and their former colonies continue to stir political tensions that result in stand-offs such as is being witnessed between governments of the AES Confederation and their former colonial overlord, France, and other Western economic partners.
Burkina Faso’s decision clearly signals the country’s frustration with its former Western allies as much as it is an assertion of its sovereign right to seek new alliances in a desperate push against an insurgency that threatens its national existence.
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