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Gold: Burkina Faso and its mining industry facing the challenge of terrorism

In Burkina Faso, the deadly attack on a convoy by the mining operator Semafo led the latter to suspend gold production at its Boungou site. The Burkinabé gold industry is facing serious security challenges, which have not, for the time being, discouraged foreign companies.

The Canadian company Semafo whose coach convoy was trapped between Boungou and Fada now embodies the severity of the terrorist risk for the mining industry as well as the extraordinary boom in gold mining in Burkina Faso. The Boungou mine alone, which went into production last year, has enabled the Sahelian country to produce an additional 15% of gold in 2018. This has raised Burkina Faso, with its 52 tonnes of gold, to the fourth. rank of Africa, and among the top ten world producers. The impact on employment is limited, 30,000 direct and indirect jobs, but tax revenues soar, nearly 400 million euros last year.

Additional security expenses

Is terrorism in the Sahel likely to call into question the Burkinabé gold rush? The situation is increasingly complicated for the mining industry: 28 attacks in three years, including 19 this year alone, most related to Islamist terrorism. Expats are traveling only by helicopter from the capital Ouagadougou to the mining sites. Buildings must be reinforced with armor. The road convoys are escorted by the Burkinabe army, but it is not enough as the tragedy of the Semafo convoy has proved. This year the Burkinabé government has asked private companies to finance a fast force, helicopters, which has not been successful for the moment.

But the activity remains profitable

But so far neither the risks nor the additional expenses have deterred foreign companies present. Production costs in West Africa, on prolific deposits, remain unbeatable, and the price of gold is at its highest for six years. Semafo only suspends production but stresses that the mine site itself is secure. Neither its Canadian competitor Iamgold, who operates the country's first gold deposit, Essakane, near the Niger border, nor the Russian Nordgold in the center and joined by RFI intend to leave the country.

Exploration slows down

But the climate of violence risks dissuading exploration, which requires traveling over vast areas. Until last year, the pace of investment was sustained in Burkina Faso, according to the World Bank, but the Burkinabé Chamber of Mines observed the reduction or even freezing of exploration budgets since the assassination last January, from Canadian geologist Kirk Woodman .