After ”white gold” — cotton — failed to live up to expectations in recent years, the impoverished West African nation of Burkina Faso has turned its energy to digging for real gold.
To make up for low prices on the cotton market that have hit its top export earner, Burkina Faso has relaunched its large-scale mining sector.
Cotton, dubbed ”white gold” during its heyday in this country which is Africa’s top producer of the commodity, used to bring in about 60% of export earnings.
But cotton earnings are now reduced and the focus has turned to gold mining with the aim of luring foreign investment into a sector that had long been relegated to small scale gold diggers.
”A mining code adopted in 1997 … was reviewed in 2003 to make it more attractive,” said Adama Barry, the Burkinabe representative in Nantou Mining, a affiliate of the Australian giant AIM.
”The tax regime is now good and done in a way that lures investors,” he said.
Over a period of six months, the West African country has handed out 420 prospecting licences to Australian, Canadian, European and South African mining firms.
And this week should see the first grams of the yellow metal being extracted on large-scale commercial levels by Canada’s High River Gold, one of the six foreign firms so far granted exploitation licences.
High River Gold will be mining at Tarpako in Burkina Faso’s northern Nemantenga province.
The landlocked country, ranked by the United Nations as the fourth least developed country in the world, last produced gold on a large scale more than seven years ago before its western-based Poura Gold Mine closed shop in 1999.
With the re-industrialisation of the mining sector, the state’s projections are that 10 tonnes of gold per year should be achievable by the year 2010, almost a ten-fold jump the current output from small producers.
Tax revenue from the yellow metal production should also take a corresponding jump to around €26-million ($37-million) per year by the same period and play a part in reducing poverty.
”The country’s current policy is to attract the maximum numbers of investors, and to have them turn their interest to mining, especially gold so as to generate wealth,” said Mines Minister Abdoulaye Adoulkader Cisse.
The impoverished country also looks up to the gold-mining sector to stimulate development in the areas where mining will take place as well as generate employment in a country where youths under 25 constitute 65% of the population.
Burkina Faso places much hope in its minerals where research has also shown there are diamond and uranium deposits.
”When you look at our geographical positioning, Burkina Faso is between Ghana and Mali, two of Africa’s largest gold producers and has practically similar geological structure,” said Cisse.
But administrative hurdles to give real guarantees to foreign investors and to rid the system of red tape, remain according said Barry, who also heads the Professional Miners Group of Burkina Faso, a grouping of about 30 local and foreign mining firms.
”Mining trucks [at times] spend several days a customs when they should be at the mines. Even the tax exemptions provided for in the books are not always respected by relevant offices,” he lamented. – Sapa-AFP