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Burundi seeks bigger share income nations mining operations

The government of Burundi is seeking to increase its share of the mineral wealth that foreign mining companies extract from its soil.

Ministry of Energy and Mines made the announcement and pointed out that the country only 10% of the income from the minerals even though it owns the land, according to an official of the Ministry of Energy and Mines.

Effects

To put pressure on foreign mining companies operating in Burundi, the government ordered a shut-down last July of mines belonging to seven British, Chinese and Russian companies. It says the mines can re-open once the contracts have been renegotiated. The suspension of mining put a financial squeeze on the mining companies, but also on Burundian labourers working in the mines. Surrounding communities have also felt a pinch, as their tax revenues have fallen.

The broader community has also been affected. Rainbow Rare Earths had pledged to build schools, pave roads and restore the damaged environment surrounding the mines. But when the mines were closed, these operations stopped. So did an estimated $15,000 in tax payments due to the local communities.

While the impasse continues, some observers say the contract negotiation process itself needs improvement. According to Pamphile Malayika, a member of Burundi’s parliament, the process should be more transparent so that all affected parties can have a say before contracts are signed. This could prevent subsequent disputes and mine closures that harm everyone – the companies, the government, the mineworkers and the surrounding communities.

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