Here is an article that touches on it , but not entirely....When...

Here is an article that touches on it , but not entirely....


When looking at the large African Mining countries, it is fair to say that Burkina Faso is still in somewhat of a fledgling state. With a history of political, military and economic turmoil, this West African nation has not always offered the optimal environment for foreign investors to develop mining and exploration assets.

However, after almost two decades of economic reform, trade liberalization and privatization, the country is now on the cusp of a mining boom, intentionally stoked by a series of mining friendly legislation and tax breaks, with the intention of bringing the poverty stricken state into an era of renewed prosperity. It is in this backdrop that a number of mining and exploration companies have decided to move and develop assets in Burkina Faso, looking to take advantage of the natural resources the country has to offer, and hoping to benefit from the surge in mining by ?getting in early?.


Burkina Faso, also know just as Burkina, is a landlocked country located in West Africa, surrounded by six other nations including Ghana, Niger and Togo. Since seizing power in 1984, President Blaise Compaore has strived to take his nation away from its dependence on agriculture, form a developing economy and improve relations with the west, with hopes of bringing in foreign investment. In a large way this diversification came as a necessity, with prices from its primary export, cotton, falling significantly during the 1990?s, sparking a need to look elsewhere for potential growth areas and at the resources available to the country.

After a series of economic reforms and financial liberalization, it has now managed to get this process underway, and has consistently showed economic growth of around 6% for the last 15 years, also helped by increasing farm production. It has undergone a fairly widespread privatization programme, and has won the faith of foreign donors by adhering to strict policy rules set out by the International Monetary Fund (IMF) and the World Bank (WB). Most recently, it has implemented some major changes to the tax system and created a number of ?mining friendly? programmes with the specific aim of bringing in new mining and development companies taking advantage of its significant natural resources (namely gold and some uranium).


With this, it has begun in recent years to inaugurate its first industrial scale gold mining operations, and under pressure from local operators, plans to continue to change its policies towards the industry in coming years, with big changes expected in tax policies coming from Ouagadougou (the country?s capital). Between 2008 and 2009 for example, the number of exploration licenses awarded by the government rose by 11%, climbing from 537 to 597. The government has also stated its intention to target gold output worth $307mln per annum from 2015. To achieve this, the government has announced their intention to set up a ?mining development fund? next year, with Groupement des Professionnels Miniers (GPMB) behind the move. Both the government and mining companies themselves are expected to contribute to the fund, although specific details have yet to be released. Further to this, they intend an inauguration of a higher education institute for mining engineers and other executives in order to keep up with the boom in the industry.

There are still some risks in the area however, that can not be overlooked by potential foreign investors. The country was recently ranked among the world?s worst places to do business form the World Bank, for example, suffering from prohibitive energy costs and relative remoteness. Having said that, it has been noted that the mining sector is outperforming other labour intensive industries so far in winning new investment. There are also some questions surrounding the political future, after several riots have broken out in the past year as well as a gun battle between police and army recruits.

Since President Compaore came to power in a coup d??tat in the 1980?s, he has kept a tight grip on power, most recently ?winning? an 80% majority in the 2005 Presidential polls. With stability being a key factor to any foreign investment, the potential for political turmoil, if and when President Compaore no longer holds power, brings about many unknown factors for those companies looking to establish themselves for the long term.


All these developments and potential problems for the sector bring about the question; what companies have begun to take advantage of the new backdrop for mining and exploration and how have they fared so far? To date, prospects for those mining and exploration companies who have been operating in Burkina Faso have been fairly good, both financially and in the quality and levels of mineralization offered by their exploration properties and permits.