Burkina Faso revises mining code

Burkina Faso has revised its mining code with a goal of increasing royalty rates for gold production and also respond to the challenges faced by the country’s mining industry.

While the state’s stake in mining operations is regulated by stability clauses, the revision of the mining code specifically addresses royalty rates. This means that royalty rate increases apply to both existing and new mining contracts. The minimum royalty rate for gold production in Burkina Faso has been raised, with the rate depending on the spot price of gold.

Gold output

Burkina Faso, which is one of Africa’s major gold producers, experienced a 13% drop in gold output in 2022. This decline in production is attributed to various factors, including deteriorating security conditions and the closure of at least five mines.

The country has been grappling with a volatile security situation, including an Islamist insurgency. This situation has adversely affected mining operations, with mining companies facing significant security risks in the country.

The country has witnessed political instability, including two coups in 2022. This political turmoil has seen countries like the United States and France suspend aid and budgetary reflecting concerns about the country’s political stability.