Burkina Faso

EITI Status Meaningful progress

Joined EITI in 2009

Latest Data From 2016

Latest Validation 2018

Last updated 20 December 2018

Overview

The mining sector in Burkina Faso is considered one of the most dynamic in West Africa. The development of the mining sector was made possible through intensified investment, the opening of industrial mines and an evolution of the legal and regulatory framework for the sector. The main resources are gold, zinc, copper, manganese, phosphate and limestone. Traces of diamonds, bauxite, nickel and vanadium have been recorded in various geological formations. However, gold remains the most exploited ore in Burkina Faso.

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Tax and legal framework

Mining activity in Burkina Faso is governed by the 2003 Mining Code, pending the ongoing adoption of implementing decrees for the 2015 mining code. The Ministry of Economy and Finance, in particular the General Tax Directorate (DGI), the General Treasury and Public Accounting Directorate (DGTCP) and the General Customs Directorate (DGD), collect duties, taxes and revenues from the mining sector. The principle of unicity of public accounts (“unicité des caisse”) means that the funds belonging to all public bodies must be deposited in the Public Treasury, which acts as the treasurer (“Caissier de l’Etat”). There are a few exceptions where companies pay directly to local Government units (such as patentes).

Mining permits are granted by the Council of Ministers after consultation with the Minister of Mines and the National Commission. Licenses are allocated on a 'first-come, first-serve' basis. According to the 2015 EITI Report, no technical or financial criteria are taken into account for new license allocations. The acceptance of the applicants’ dossiers is based on the administrative documents, provided for in the legislation, but not on the applicant’s ability to make the expenses needed for the successful development of the mining site. Permit maps can be obtained without any restriction from the Bureau of Mines and Geology of Burkina Faso (BUMIGEB), on payment of fees depending on the data requested. Burkina Faso had begun a project to modernize its mining cadastre with the support of the World Bank, with the installation of a new computerized system which should be completed by June 2018.

With respect to contract transparency, article 15 of the new Mining Code provides for the publication of contracts or mining agreements in the Journal Official du Faso. Mining contracts cannot deviate from the model agreement (Decree no. 2005-049/PRES/PM/MCE on a Model for mining agreements, 2005).

Beneficial ownership disclosure

There is currently no government policy for beneficial ownership disclosure. In the absence of a legal framework, the EITI Committee had decided to disclose the actual ownership data in the EITI Report for companies included in the reconciliation scope. To this end, the Committee adopted the definition provided for in the EU's fourth Anti-Money Laundering Directive.

Burkina Faso published a beneficial ownership roadmap for the publication of beneficial owners in the mining sector by 1 January 2020. The vision of the roadmap is stated as ‘the free access by all Burkinabe citizens to data from license registers, mining contracts and the identity of the physical persons who hold mining assets in Burkina Faso, or who control mining companies by 2020". The roadmap has four main axes, namely (i) the institutional and legal framework (ii) capacity building (iii) information, communication and publication and lastly (iv) partnership and cooperation. The study identifies risks in the implementation of the roadmap such as a lack of financing, poor buy-in by mining companies, a lack of reliable information and difficulties in accessibility and poor coordination between the organisations involved.

The 2015 EITI Report was unable to clearly identify any beneficial owners. It was however able to identify physical persons for 2 of the 23 companies, namely SEMAFO and SMB. 12 companies are known to be publicly listed mainly on the Toronto, London and Australia stock exchanges (IAM GOLD Cooperation, SOMITA, BMC, BISSA Gold, OREZONE INC SARL, Gryphon Minerals Burkina Faso, High River Gold Mines WA, Kiaka gold, BIRMIAN Resources, Riverstone Resources NC, Jilbey Burkina SARL and Roxgold Sanu).

Production

According to data provided by the General Directorate for Mines and Geology and the Cadastre (DGMGC), the total industrial production of refined gold for 2015 was 36.17 tonnes. Based on mining companies’ declarations, gold production at the end of 2015 amounted to 35.1 tonnes of refined gold at a valued of USD 1,419 million. Zinc production amounted to 134 643 tonnes in 2015. The value of zinc production was USD 54.5 million. No manganese production was recorded during the period 1 January to 31 December 2015.

A parliamentary inquiry into the mining sector published in 2016 included a review of the artisanal exploitation of gold, and in particular, informal production (p. 70).17 According to the results of the survey, production from informal gold mining was estimated to be between 15 and 30 tonnes per year for the period 2006-2015, with a shortfall in tax revenue for the State estimated at USD 182.4 million.

The country’s main exploration projects include Essakane (gold), Mana (gold), Inata (gold), Taparko (gold), Youga (gold), Bissa (gold) and Perkoa (zinc and iron-silver). There were 5 projects under construction as at 31 December 2017 notably Tambao manganese, Seguenega gold, Narissiguima gold, Niaka Nogbele gold and Bagassi Balé.

Ministry of Mines and Energy (2014), Mining sector of Burkina Faso and beyond, investment opportunities in 2014

Université de Rouen (2012), L’orpaillage face à l’arrivée des industries minières aurifères : cas du Burkina Faso

Roskill and Africa Mining Reports (2015), The mining sector after the coup: challenges and opportunities facing the government

Natural resources

Burkina Faso has rich deposits of gold, zinc, copper, manganese as well as iron, nickel, limestone, dolomite and phosphates. Abundant mineral resources are found along an arc from the country’s southeast to northwest. Gold reserves have grown rapidly in the past decade, with over 15 major discoveries since 2006.

Commodity	Reserves	Unit	Significance
Gold	154.2	metric tons
Zinc	6	million metric tons	The Perkoa zinc mine holds some of the largest zinc deposits in Africa. 14.5% Zn.
Copper	70	million metric tons	0,35% to 0,25% Cu.
Manganese	19	million metric tons	45% to 55% Mn.
Iron, titanium and vanadium	66	million metric tons	35% Fe2O3 with 35000 tons of V205 at 0,7%.
Nickel	30	million metric tons	1,2% to 1,5% Nickel and 0,05% Cobalt.
Bauxite	12.7	million metric tons
Limestone	93.1	million metric tons	45% to 55% CaCO3.
Dolomite	20.7	million metric tons
Phosphates	131.2	million metric tons	20% P205.
Antimony	700	metric tons
Graphite	9000	metric tons
Marble	100,000	metric tons

Section 3.2.9 “Mining potential and reserves” in 2013 EITI Report, USGS Burkina Faso Minerals Yearbook 2013

Revenue collection

The latest EITI disclosures (2013) show that Burkina Faso received USD 407 million from extractive industry taxation. All of these revenues came from gold and were mainly collected through customs duties (30%), corporate income tax (28%) and royalties (16%). While there is no provision for signature bonuses or production premiums in the Mining Law, they are levied in practice.

IMF (2016), Technical assistance report, mining taxation: modelling of five mining operations

KPMG (2013), Analyse du partage des benefices des activités aurifères au Burkina Faso

Groupe de Recherche et d’Information sur la Paix et la Sécurité (2015), Nouveau code minier au Burkina : de l’or au benefice de

Reconciled revenues by top 5 companies

Revenue allocation

Like budget revenues, revenues from the mining sector are collected and allocated in accordance with the principle of budget universality. This consists of combining all the fiscal resources into one fund, and in charging all the public expenses to this fund without distinction. Payment flows not directly allocated to the national budget are limited to: municipal taxes (road taxes and entertainment taxes) paid to local authorities and contributions to the National Bureau for Environmental Evaluations (BUNEE) and the Environmental Rehabilitation Fund (FRE). Municipal taxes are not applicable to the mining sector.

Policy recommendations and reforms

The 2015 Mining Code includes innovations, such as the abolition of the mining convention in the exploration phase; the obligation for holders of mining titles and their subcontractors to grant "preference to Burkina Faso enterprises for any contract for the supply of services or supplies of goods under equivalent conditions of price, quality and time"; the possibility, exceptionally, to submit to competition, the mining rights or the authorisations considered as assets; penalizing illegal activities related to the trade, transport, possession and illegal storage of rough diamonds; and banning and penalizing the use of mercury, cyanide and other hazardous chemicals.

Since 2015, Burkina Faso has launched the modernisation of its mining cadastre with the support of the World Bank, including the installation of a new computerised system. The finalisation of the project is expected mid-2018.

Innovations

The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.

Burkina Faso participated in the beneficial ownership pilot and the 2012 and 2013 EITI Reports contained some beneficial ownership details (alongside legal ownership information).
The 2013 EITI Report discloses both mandatory and voluntary social expenditure, split between cash and in-kind payments. It also includes details of non-governmental beneficiaries.
Burkina Faso EITI is supporting the World Bank in its study of women in the industrial mining sector and further means of support from companies.
Burkina Faso is undertaking a study on CO2 emissions in its mining sector, including possible reduction and mitigation measures. Piloted by the EITI Secretariat in Ouagadougou, the study is supported by France and is part of Burkina Faso’s Intended Nationally Determined Contribution (INDC), submitted to the 21st COP in Paris in December 2015.

Implementation

The government of Burkina Faso committed to implement in 2008. On 16 April 2008, the Council of Ministers adopted decrees creating the Supervisory Committee, a Steering Committee and a Permanent Secretariat. On 15 May 2009, the country was admitted a candidate country. In February 2013, Burkina Faso was recognised as compliant with the EITI Rules (EITI, 2013). Burkina Faso EITI Reports have covered the fiscal years 2008 to 2015, with the first EITI Report covering fiscal 2008 and 2009. The seventh EITI Report, covering the fiscal year 2015, was published in March 2017.

Burkina Faso's progress by requirement

EITI Reports and other key documents

Burkina Faso 2017 EITI Annual Progress Report

Published Date:

July, 2018

Burkina Faso 2016 EITI Report

Published Date:

June, 2018

Burkina Faso's 2016 EITI Report covers extractive activities in the country for that fiscal year.

Burkina Faso 2016 Annual Progress Report

Published Date:

June, 2017

The Annual Progress Report provides an overview of all EITI Burkina Faso's activities during the past year.

Burkina Faso 2017-2019 work plan

Published Date:

July, 2017

The work plan presents all activities EITI Burkina Faso is planning for the period in question.

Burkina Faso 2015 EITI Report

Published Date:

February, 2017

Burkina Faso's 2015 EITI Report covers extractive activities in the country for that fiscal year.

Burkina Faso 2014 EITI Report

Published Date:

December, 2016

Publisher:

Burkina Faso EITI

Burkina Faso's 2014 EITI Report covers extractive activities in the country for that fiscal year.

Burkina Faso 2015 annual progress report

Published Date:

December, 2016

Publisher:

Burkina Faso EITI

The Annual Progress Report provides an overview of all EITI Burkina Faso's activities during the past year.

Burkina Faso 2016-2018 workplan

Published Date:

July, 2016

Publisher:

Burkina Faso EITI

Burkina Faso published its 2016-2018 EITI workplan which was approved by its tri-partite multi-stakeholder group on 28 June 2016. This document serves as a road map for the execution of activities aimed at consolidating transparency in the extractive industries.

Its main objectives include ensuring the effective functioning of the multi-stakeholder group, publication of mining contracts on the website, improving the quality of EITI reporting and preparation for the country's Validation.