(Ecofin Agency) - Due to insecurity, several gold mines have closed in Burkina Faso, causing production to drop. Most active mines in the country are controlled by foreign companies, mainly Canadian and Australian.

Burkina Faso wants to take control of its gold mines. In a national radio broadcast, President Ibrahim Traoré criticized the dominance of foreign multinationals in the local gold sector. "All the gold mines are currently on our agenda [...]. "We know how to mine our gold and I don't understand why we're going to let multinationals come and mine it,” Captain Traoré said.

Since assuming power in 2022, Traoré has pushed for increased local participation in mining and wants a larger share of the revenues from gold production. His recent comments follow a tripartite agreement involving Endeavour Mining and Lilium Mining, a company owned by Burkinabé businessman Simon Tiemtoré.

Under this agreement, the Burkinabé State acquired the Boungou and Wahgnion gold mines from Lilium Mining, which had purchased them from Endeavour. The Société de Participation Minière du Burkina (SOPAMIB) now controls these mines and is expected to benefit from new industrial mining operations. Another key player in this initiative is the Agence pour la Promotion de l'Entrepreneuriat Communautaire (APEC), which is already mining in the southwestern region.

Gold mining in Burkina Faso is dominated by foreign companies like London-listed Endeavour Mining at the Mana and Houndé mines, Canada’s Orezone Gold at Bomboré, Iamgold at Essakane, and Australia’s West African Resources at Sanbrado. 

In a press dated October 7, West African Resources said it still has good relations with the government. In the same release, the firm confirmed it would keep operating in Burkina Faso.

“WAF is not aware of any plans by the government of Burkina Faso to withdraw any of its mining permits [...]. Operations at Sanbrado and construction at Kiaka are progressing without interruption. WAF is on track to achieve annual guidance of 190,000 to 210,000 ounces of gold,” the release read. 

While there are no immediate indications that foreign mining permits will be revoked, there is a growing trend of resource nationalization across Africa. This could lead local governments to push out multinationals from their operations. 

However, an Ecofin Pro report dated October 2022 highlights that nationalizing resources could pose risks to investments from mining companies while profiting governments. The author, Louis-Nino Kansoun, pointed out that nationalization can create new jobs and enhance public services in the short term due to the revenue generated from mining. However, this strategy may make a country less attractive to foreign investors and could decrease the sector’s efficiency and competitiveness.

Emiliano Tossou