By
Ezra Nnko
Africa-Press – Mauritius. Burkina Faso’s President Ibrahim Traore said, “We are going to get our mining licenses back, and we are going to mine it ourselves.”
On 4th December 2024, Orano, a French nuclear firm owning 63 percent of the Somair mine in Niger, released a statement criticizing the act of the Nigerien government taking total control of the Somair uranium operation. This came shortly after the Niger government revoked the Orano operational license for the extraction of metal used for nuclear weapons from the Imouraren mine in Northern Niger in June 2024. The Niger government had not released any official statement on its decision to expel the Orano company from the major uranium mining company’s operations.
In neighboring Mali, in October 2024, the Malian government nationalized the Yatela gold mine after a retrocession agreement with AngloGold Ashanti, the South African company, and Canada’s Iamgold. Both companies owned 40 percent each, while Mali owned 20 percent. The gold mine was transferred to the state-owned Mali Mineral Resources Research and Development Corporation.
In Burkina Faso, the Ouagadougou government under Ibrahim Traore struck a deal with Lilium Mining Company to acquire and nationalize the Boungou and Wahgnion gold mines for $80 million. The mines were previously “owned” by London-listed Endeavour Mining before being sold to Lilium Company in 2023. The deal includes the government paying $60 million to the London-listed Endeavour, while the remaining $20 million will be paid through a 3 percent royalty on up to 400,000 ounces of gold sold from Wahgnion mines.
Why the nationalization?
Burkina Faso
“We know how to mine our gold, and I don’t understand why we’re going to let multinationals come and mine it.” Burkina Faso President Ibrahim Traore.
Burkina Faso has vast mineral resources ranging from diamonds, gold, zinc, copper, limestone, phosphate, and manganese. For many years, foreign companies have been engaging more in the mining sector, as French company Noldgold mined in Bissa, Semafo, Canadian company operated in Mana, and Australian companies Gryphon Minerals, Blackthorn Resources, and Ampella Mining operated in the south of Burkina Faso. It is estimated that over 1,000 mining-related businesses operate in Burkina Faso. Despite being the fourth largest gold producer in Africa with thousands of mining business operations, the mining sector had been previously enlisted among the subsectors within the industrial sector comprising textiles and agro-processing and recorded contributing 12 percent of GDP and employing only 65,000 people.
On 18th July 2024, Burkina Faso adopted the New Mining Code as a way to monitor and regulate the mining sector. The new code aimed at ensuring the mining sector contributes to economic and social progress while financing security expenses but mostly giving power to the state to control the mining sector. For instance, the New Mining Code established the Mining Development Fund that would fund local development projects and national security programs. This new code permits the state to own a non-contributing or free shareholding interest from 15 to 30 percent or to allocate it to the national private sector as a firm/enterprise owned by a Burkinabe. The code has also reduced the length of large-scale mining permits from 20 to 10 years and small-scale permits from 10 to 5 years.
Burkina Faso has been fighting the insurgency through the Volunteers for the Defense of the Motherland through the Patriotic Support Fund, an internal contribution fund from tax deductions and voluntary contributions. According to the World Bank, Burkina Faso’s security expenses have increased by 138 percent over the last five years due to its counter-insurgency operation in border regions and the eastern part of it. Nationalizing the mining sector, raising the state shareholder interest, controlling the mineral outflows, and reallocating the mining sectors to development projects will at least stabilize the national economy, which was previously highly dependent on France. As for now, the mining sector is the key to Burkina Faso’s social, security, and economic independence.
Mali
In August 2023, Mali adopted the New Mining Code, which will ensure a 10 percent stake in mining projects and an option to buy an additional 20 percent within the first two years of commercial production. The new code abolished some of the tax exemptions that were used as tax avoidance; for instance, exemptions for petroleum products cost tax avoidance of more than 60 million CFA francs (approximately 96 thousand USD). The interest rate has risen from 20 to 35 percent, while it allows the Malian private sector to hold up to five percent of the mining sector share. The code upholds the mining company to treat, refine, and process the mining products within the country, thus boosting the local industries, advancing the technology and local expertise, and avoiding the risk of tax avoidance.
Mali is the third largest gold producer in Africa and thirteenth in the world. Gold contributes 80 percent of its country’s exportation and 30 percent of the tax revenue, while 10 percent of the Malian population depends on the mining sector. It is estimated that Mali has a reserve of 800 tons of gold while possessing two million tons of iron ore, 20 million tons of manganese, four million tons of lithium, and tens of millions of tons of limestone.
The mining sector reform is expected to raise the GDP from 9 to 20 percent while recovering up to 995 million USD, which was not collected due to the previous mining code agreement. It will also stimulate the employment sector and boost the advancement of technology as the new code directs the mining companies to gradually reduce the number of foreign employees from 10 percent in the first three years since being granted a permit for operation to 5 percent in another three years. As for now, there is a slight increase in the unemployment rate from 7.7 percent in 2022 to 6.70 in 2023. According to the African Development Bank, these remarkable reformations together with the lithium production and exportation will stimulate economic growth from 4.7 to 5.3 percent in 2024 to 2025, respectively, while the inflation rate is expected to decline from 2 percent in 2024 to 1.8 percent in 2025.
Niger
Niger is the seventh global uranium producer with the contribution of 5 percent of the world’s mining output, and uranium is the second major exported product after gold in Niger, as it contributes to 5 percent of the country’s GDP. There are seven listed mines in Niger, mostly owned by Niger in partnership with private companies, the French Orano (before its operation was revoked), and the China National Nuclear Corporation (CNNC). Niger, together with Canada, Russia, and Kazakhstan, is the major supplier of natural uranium in European Union countries, as it accounts for a quarter of the EU imports.
Of all the Alliance of Sahel states, Niger poses a very strategic influence mostly in the developed world, as it possesses the very unique product for the development and security of these developed countries. For instance, France imports 15 to 20 percent of its whole uranium imports from Niger; it is also estimated France requires approximately 7,800 tons of uranium on average per year to operate 56 reactors in its nuclear power plants.
The Road Towards Nationalization: The Winner Joins a Party
Russia: The New Resource Partner for ASS.
“We do not give permits to people because they are from Russia or the United States… “…we give permits to a company that pays taxes and respects our laws.” Simon-Pierre Boussim, former Burkina Faso mining minister.
Nationalizing this strategic sector brings Niger to the center of the global economy, although Russia seems to be Niger’s most favorable partner in this new era of the uranium boom. It was recently reported by Niger’s Mining Minister, Ousmane Abarchi, confirming the ongoing negotiations between Niger and Russia investing in uranium and “other sectors.”
If Russia manages to have a deal with Niger and targets EU markets, it may somehow become the major “influential supplier” of uranium in the EU, surpassing Kazakhstan. Niger contributes 26 percent of the total uranium market in the EU, while Russia, via Rosatom, contributes to 17 percent of the total needs.
Currently, Nordgold, a Russian firm, owns 90 percent of the Bissa, Bouly, and Taparko mines, while the government owns 10 percent. The firm is estimated to produce 50 percent of the total gold exported from Burkina Faso. These are the records before the adoption of the New Mining Code.
Russia holds its uranium supply chain to maintain its strategic energy influence globally. Through Rosatom, Russia provides 30 percent of the uranium enriched in the E.U. and 23 percent in the U.S. Keeping Niger off the EU and U.S. grid will be another of Russia’s plans to counter Western influence in global energy politics.
The Scramble for Alliance of Sahel States: Do Africa learn a lesson?
Not only for the Sahel, but Africa should take full advantage of the nationalization of natural resources. Africa should stop being a merely primary producer rather than a stiff competitor in the mineral industry market. Africa should take advantage of owning the resources and investing in the importation of technology and expertise in the mineral industry to add value chains to promote industries and the transformation of the related cross-cutting sectors such as energy, infrastructure, trade, and security. By exporting raw minerals, it’s just like exporting local jobs, limiting the advancement of technology and expertise, and narrowing the tax routes.
This new mining law should not be used as a counter to West/East influence in Africa but rather as a road towards self-independence in utilizing and operating the mining sectors. Tanzania, without the influence from Russia or the West, tried through the Mining Act 2019; Africa may follow in its footsteps. The Alliance of Sahel States should become Africa’s Pink Tide Revolution on Natural Resources.
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