Burkina Faso has awarded an industrial mining licence to Russian mining company Nordgold for the Niou gold deposit in the Kourweogo province of the country, reported Reuters.
The licence aims to capitalise on high gold prices to bolster the country’s economy, which has been impacted by security challenges.
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Burkina Faso, a significant gold producer, has been combating Islamist militants since 2015. Swissaid reports that the country produced more than 57 tonnes (t) of gold in 2023.
The surge in gold prices, which have increased by more than 25% this year, is attributed to geopolitical tensions and the trade policies of US President Donald Trump.
The licence is expected to strengthen economic relations between Burkina Faso and Russia as the country shifts its focus from traditional Western partners.
The Niou gold project in Burkina’s Plateau-Central region spans 52.8km² within Jilbey Burkina’s exploration licence area, now owned by Nordgold.
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By GlobalDataNordgold also operates the Bissa and Bouly mines in the region.
According to the Council of Ministers, the Niou mine is projected to produce approximately 20.22t of gold over eight years.
Jilbey Burkina will maintain an 85% interest in the project, with the Burkinabe Government holding a 15% stake, in line with the nation’s new mining laws. This arrangement does not require any financial contribution from the government.
The project is expected to contribute CFA Fr51.5bn ($89.2m) to the state budget and CFA Fr7.06bn to the state’s mineral wealth fund over its lifetime.
Germany’s Konrad Adenauer Foundation Sahel programme head Ulf Laessing said: “The cooperation with Nordgold and other industrial mines is important as the country faces a budget crunch.”
However, Laessing also noted that the Niou project might impact local artisanal miners by displacing their source of income.
The government has announced that the mine could create 204 jobs and support employment at the nearby Bissa Gold SA mine.
Earlier this month, Fortuna Mining, a Canadian company specialising in precious metals mining, finalised an agreement with Soleil Resources International to sell its stake in Roxgold Sanu, which operates the Yaramoko gold mine in Burkina Faso, along with its other subsidiaries, for $130m (C$180.57m).
