INTRODUCTION TO Burkina Faso

Burkina Faso located in West Africa, although it is a small country with a land area of 274,000km˛, it is at the centre of considerable exploration interest at the moment. Despite the growing interest from mining companies during the past few years, Burkina Faso is still one of the world’s poorest countries, with a per-capita GDP of US$639. It is ranked 181 out of 187 countries on the 2011 UNDP Human Development Index and receives assistance from the World Bank/International Monetary Fund (IMF) debt-relief and poverty reduction programmes. The country is landlocked, being surrounded by the gold-rich nations of Mali to the north and Ghana to the south, increasing the scope of investments particularly in the mining sector.

Burkina Faso is considered, by mining experts, to be the country with the greatest untested mining potential in West Africa. After the 2004 liberalisation of the mining code, deposits of gold, manganese, zinc, and uranium have attracted significant interest from international mining firms. Due to its numerous economic reforms, Burkina Faso was listed as one of the top ten reformers in the World Bank report, "Doing Business 2009".Burkina’s commercial viability is closely linked to the stability of its neighbours. The ports of Abidjan (Cote d’Ivoire) and Lome (Togo) serve as key shipping points for Burkina’s imports/exports.

INVESTMENT OPPORTUNITIES

The attractiveness of the mining industry to new investors is demonstrated by Burkina Faso’s ranking in the Transparency International Corrupt ion Perceptions Index 2010 which ranks the country 98 out of 178, making it one of the best ranked countries in West Africa (along with Ghana). Furthermore, Burkina Faso is a candidate country for the Extractive Industries Transparency Initiative (EITI).

Burkina submitted a validation report in September 2011 which is currently under review and is noted as having made meaningful progress in implementing EITI. The government has acknowledged the role that the mining sector plays in the country’s growth. It continues to review its mining policy and is mindful to “take into account the socio-economic constraints to the harmonious development of the mining sector”. In October 2010, a feasibility study for establishing a single mining administration was validated and is currently being implemented.

EXPLORATION POTENTIAL

Some of the world’s most prolific mines are located in the West African greenstone belts which cover approximately 3 million km˛, making the area’s exploration potential enormous. Burkina Faso currently accounts for 21% of West Africa’s greenstone belt exposure. Burkina Faso is geologically rich. There has been substantial interest in the nation from mining companies over the last 40 years, with the Poura region producing over 25 tonnes of gold.

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COMPANIES MINING IN Burkina Faso


LEGISLATION & MINING POLICY OVERVIEW

The strategy for mineral resource development in Burkina Faso, is to establish the legal and the regulatory competitiveness framework in such a way as to reduce the tax rate on business profits, limit royalties, disengage the State, plan for a construction phase of mine supports as well as other tax and customs reliefs. The mining code is being adjusted with the aim of creating global mining operations, conforming with global competitiveness requirements.

The main innovations of the new mining policy statement are related to the development of the local mineral processing to answer the needs of the national market, responsibility to the surrounding communities, creation of a local development mining fund, more efficient mining administration, and the establishment of a coordination framework for all stakeholders in the mining sector. All these innovations are aimed at making the law more attractive, while protecting the national interests and competitiveness of the Code at an international level.

Burkina Faso’S ECONOMY

The economy of Burkina Faso is heavily dependent on external assistance and has few exports (cotton was overtaken by gold as the biggest export earner). Agriculture still accounts for a substantial portion of the countries GDP.

In 2010, the Burkina Faso government reported that 774 mining titles were granted, among which were 11 industrial operating permits and 480 exploration permits.