don't overlook burkina faso for mining success

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http://www.iii.co.uk/articles/14186/dont-overlook-burkina-faso-mining-success

When one casts an eye over a map of Africa, Burkino Faso doesn't necessarily spring to mind in terms of mining prowess.

However, having emerged from a history of political and economic instability, the country has staged a turnaround and analysts believe markets shouldn't be so quick to overlook it.

Just earlier this week, President of the country's Professional Mining Association, Elie Justin Ouedregao, said the country's gold production is likely to rise a whopping 32% to 33.74 tonnes.

That follows on from 25.6 tonnes produced last year and 11.73 tonnes in 2009.

The landlocked country, nestled deep in the heart of west Africa, has spent the past two decades working hard to overhaul its economy; reducing its dependence on agriculture and developing its other resources.

It's a move that has proved fruitful, with Burkina showing constant economic growth for the past 15 years.

In 2003, Burkina Faso - which translates as "land of honest people" - introduced a new mining code with the intention of luring foreign investment.

Since then, mining, and more specifically gold exploration, has gathered momentum and it now plays host to six operating gold mines, as well as over 20 listed exploration companies.

Of course, the country is not without its risks, after it was recently ranked among the least attractive places to do business by the World Bank due its prohibitive energy costs and remote location.

That said, Burkina Faso has worked hard to make its mining sector attractive to outside investors and so far it has outperformed its other labour-intensive industries, with the government outlining its intention to produce gold output worth some $307 million a year from 2015 onwards.

It was also ranked fourth globally by the Fraser Institute in its Survey of Mining Companies 2009.10 for its mineral potential given its current mining policy.

Charles Kernot, analyst at Evolution Securities, said: "We would argue that Burkina Faso is one of the best mining jurisdictions in west Africa, especially when compared to countries such as Guinea and the Ivory Coast.

"With stable politics and good geology, we believe that Burkina Faso is well on the way to being a major player in the west African gold space."

It is against this backdrop that UK-listed companies have decided to develop their assets in Burkina.