Sitting on a gold mine

Burkina Faso may be losing out on millions of dollars from gold.

The recently published EITI Report showed that Burkina Faso’s gold production reached nearly 33 tons in 2013, up 9% from the previous year, and over 20 times the country’s total gold production in 2006.

This massive increase in production has made Burkina Faso Africa’s fourth largest producer of gold. The rapid expansion of Burkina Faso’s industrial and artisanal mining sector in recent years has led to a dramatic shift in the country’s economy, which presents opportunities and challenges. According to government statistics, the number of people directly involved in artisanal mining is estimated at 1 million. 

Mineral smuggling from the artisanal mining sector

Whilst the main bulk of production comes from industrial mining (accounting for almost 99% of total output according to official figures), production from the artisanal mining is also significant, though poorly documented. 

Declared production from artisanal mining was 0.5 tons in 2013, but undeclared production was estimated as at least 8.8 tons according to a report by the Berne Declaration, a NGO investigating the sources of Switzerland’s gold. The study alleges that almost all of the gold produced by artisanal miners slips through the country’s borders undetected. In 2013, the NGO reported that approximately seven tons of gold left the country undeclared and was exported to Switzerland via Togo. Additionally, the EITI Report revealed that only 37 of the certified 63 trading houses declared their revenues to the Office of Mines and Geology. 

Important changes in turbulent times 

Massive protests forced President Blaise Compaoré to resign from office in October 2014 after 27 years in power. A transition government led by President Michel Kafando was appointed and tasked with the mandate of organising elections and facilitating the handover of power in one year. 

The temporary government managed to introduce some reforms, including the adoption of a new mining code by parliament in June 2015. The Code reaffirms Burkina Faso’s adherence to the EITI and makes it mandatory for all agreements and contracts between the government and mining companies to be published in the country’s official Gazette. It also calls for the establishment of various funds including one for environmental rehabilitation, improved security at artisanal mining sites and for the prohibition of the use of toxic chemical products. This wide sweeping reform was signed into law by the interim President in July 2015. Soon after however, there was a failed military coup to overthrow the transition government. Despite this setback, the transition government handed over power to the democratically elected President Roch Marc Christian Kaboré in December 2015. 

The political instability notwithstanding, EITI implementation continued unimpeded. The EITI Burkina Faso requested a two month extension for the publication of its 2013 Report and avoided suspension. The report highlighted the importance of implementing those reforms for better governance of this growing sector. 

EITI’s potential in improving the artisanal mining gold sector

Could the EITI be a catalyst for greater public awareness and a platform for deeper discussions on the artisanal gold mining sector, with the ultimate goal of bringing gold revenues back to Burkina Faso? By requiring all the buying houses to disclose the amount of gold that is bought and sold every year, EITI data can highlight how the sector really operates. The EITI also provides the opportunity to compare government data with other sources, such as the Report by the Berne Declaration. 

Whilst the EITI has traditionally focused on the formal, large-scale mining sector, it is increasingly being used in some countries to provide a more comprehensive picture of the contribution of the entire extractive sector to the economy. This includes fiscal revenues, employment, exports, livelihoods, investment and contribution to GDP through linkage industries. 

 

Access the Burkina Faso 2013 Report

For more information about extractive transparency in Burkina Faso, visit the country page on eiti.org.