Nordgold awarded license for gold project in Burkina Faso
Russian miner Nordgold has been awarded an industrial mining licence for the development of the Niou gold project in Burkina Faso. The move is as part of efforts to boost its economy by leveraging high global gold prices. This decision also highlights the growing economic relationship between Burkina Faso’s military-led government and Russia, as the country continues to distance itself from traditional Western partnerships following the 2022 coup.
The Niou gold deposit, located in Kourweogo province within the Plateau-Central region, spans 52.8 square kilometers. The licence was granted to Jilbey Burkina, a company now owned by Nordgold. Nordgold already operates two other mines in the country: Bissa and Bouly.
Mining laws
Under Burkina Faso’s updated mining laws, Jilbey Burkina will control 85% of the Niou project, while the Burkinabe state will maintain a 15% stake without needing to contribute financially. The project is estimated to produce around 20.22 metric tons of gold across an eight-year period.
Government officials indicated that the project should generate 51.5 billion CFA francs (approximately $89 million) in contributions to the national budget and an additional 7.06 billion CFA francs to the country’s mineral wealth fund throughout its lifespan.
Driven by global instability and economic uncertainty, gold prices have surged by more than 25% this year, creating a favorable market environment for gold-producing nations like Burkina Faso. Despite ongoing security challenges caused by Islamist insurgents since 2015, the country remains a significant gold producer, recording over 57 tons of output in 2023 according to Swissaid, a mining-focused NGO.
In addition to Nordgold, major mining companies like Canada’s IAMGOLD, Endeavour Mining, and Australia’s West African Resources Ltd are active in Burkina Faso’s mining sector. Ulf Laessing from Germany’s Konrad Adenauer Foundation, note that partnerships with companies like Nordgold are crucial for the Burkinabe government, which is grappling with a tight budget.
