Burkina Faso: Top innovations of the new mining code unveiled

The new mining code of Burkina Faso introduces a plethora of groundbreaking changes aimed at revolutionizing the sector. Here are the key innovations:

1. Mandatory Local Investment: Mining companies are now required to open their capital to Burkinabè investors (Article 10).
2. Revamped Mining Development Fund: The local mining development fund is transformed into a broader development fund, financing endogenous development projects, communal development plans, a patriotic support fund, and a national security support fund (Article 29).
3. Negotiable Mining Conventions: Mining conventions can now be negotiated on a project-by-project basis (Article 35).
4. Enhanced Oversight: Mining administration agents now have the status of judicial police officers, strengthening their power to monitor and control mining activities (Article 192).
5. Exclusion of Individuals: Individuals are no longer eligible for research permits (Article 52).
6. Reduced Preparation Time: The exemption period for preparatory work for mining exploitation is reduced to two non-renewable years (Article 75).
7. Increased State Participation: The state’s mandatory participation in mining companies’ capital increases from 10% to 15%, with the right to acquire an additional 30% stake for itself or the national private sector (Article 66).
8. Ban on Elected Officials: National and local elected officials are prohibited from holding mining titles in their constituencies (Article 42).
9. In-kind dividends: The state can now receive its priority dividend in kind based on the produced or extracted substance (Article 67).
10. Environmental Impact Notice: An environmental and social impact notice replaces the detailed study for obtaining semi-mechanized mining permits (Article 78).
11. Abolition of Tax Benefits: Fiscal and customs advantages for mining companies during the exploitation phase are abolished (Articles 173, 174, and 176).
12. Compensation for Artisanal Miners: Artisanal miners whose sites overlap with large or small mining permits can be compensated or become shareholders in the new company (Article 91).
13. Local Processing Requirement: Large and small mine operators must process or add value to at least 50% of their production within the country (Article 70).
14. Permit Validity: Exploitation permits are now valid for 10 years for large mines and 5 years for small mines (Articles 72 & 73).
15. Increased Penalties for Overproduction: Penalties for exceeding production limits are increased, with 8 points added if the excess exceeds 100% of the forecasted production (Article 214).
16. Enhanced Security: The state will ensure the security of mining sites and activities through a national structure to be created (Article 148).
17. Limit on Mining Titles: A regulatory act will limit the number of mining titles a legal or physical person can hold (Article 13).
18. Domestic Sales Mandate: Holders of semi-mechanized exploitation permits must sell their products on the domestic market (Article 80).
19. State Preemption Right: The state has a preemption right to commercialize gold and other mineral substances (Article 237).
20. Commercialization of Residual Metals: The code includes provisions for commercializing precious metals from mining residues (Article 261).
21. Refined Gold Sales: The commercialization of refined gold within Burkina Faso is now regulated (Article 258).
22. Domestic Market Focus: Only domestic commercialization is allowed for semi-mechanized permit holders and artisanal authorization beneficiaries (Articles 249 & 251).
23. Gold Refining Regulation: Gold refining activities require prior approval (Article 263).
24. Quarry Substance Sales: The code addresses the commercialization of quarry substances and penalizes violations (Title IX).
25. Strengthened Sanctions: The code introduces and reinforces penal and administrative sanctions for violations (Chapter 2 of Title VIII and Chapter 6 of Title IX).

These innovations aim to create a more equitable, transparent, and sustainable mining sector in Burkina Faso, ensuring that the benefits of mining activities are shared more broadly among its citizens.

As a reminder, gold production in Burkina Faso has been declining since 2022. It fell by 13.7% in 2022 compared to 2021, dropping from 66.8 to 57.6 tonnes. Last year, the 12 active industrial mining companies produced 56.857 tonnes of gold and generated 520 billion CFA francs in revenue for the state, according to data from the Ministry of Energy, Mines, and Quarries. As the top export product, with approximately 2,349 billion CFA francs earned, gold contributes 12.2% to the formation of the gross domestic product.

Source: L'Economiste du faso, translated and rewritten by Focus Mines