- First withdrawal in October 2021 for the same reasons
- A legal procedure had suspended the withdrawal decree
- Is the transitional government ignoring this procedure?
- Inata owes 4.5 billion FCFA to the State
- It owes 7 billion FCFA to workers and 11 billion FCFA to Ecobank
On 9 February 2023, the transitional government took the decision to withdraw the industrial exploitation permit for the large gold mine of the Belahourou Mining Company (SMB) SA in Inata in the province of Soum, Sahel Region. According to the report of the Council of Ministers announcing this decision, the Balaji Group, which holds this licence, is experiencing management problems that have led to an accumulation of debts to the state and to workers. To support the company, the state has concluded a protocol agreement for the restructuring of its debt. Through this agreement, the company committed to pay the Burkinabe State the sum of 4.285 billion FCFA in fixed fees and 300.880 million FCFA in penalties. The first payment, which was due by 30 June 2021, could not be honoured by the mining company, whose installations and equipment were also confiscated by its bank.
Surprising decision
This is a very surprising decision insofar as the permit was already withdrawn on 13 October 2021 by the Council of Ministers following the failures of the contractor Baladji, which has not been able to bring the mine back into operation since 2018.
The reasons given by the transitional government are therefore not new. They date back to 2021 and led the government of President Roch Marc Christian Kaboré to withdraw.
Following the withdrawal in 2021, the Baladji group’s lawyer lodged an appeal in court which resulted in the suspension of the withdrawal procedure. This means that the first withdrawal is still in force but it is the decree that has only been suspended. Has the transitional government forgotten or is it ignoring the first withdrawal and the ongoing procedure?
It is also clear that the reasons for this second withdrawal are exactly the same, if not ‘word for word’, as the first withdrawal.
The Inata permit seems to interest the governments of the transition of MPSR.
It is recalled that under the transition of President Paul Henri Damiba, the government had entered into negotiations with the Baladji group for the resumption of the licence after compensation. The coup d’état interrupted these negotiations.
Inata has a history full of ups and downs
On 8 February 2018, Baladji bought the Inata licence from the Avocet Group for 5 million USD, i.e. approximately 2.750 billion FCFA. Having noted that no exploitation activity was undertaken on the ground, the government sent a formal notice to the Balaji Group in February 2021. This formal notice is in accordance with Article 112 of the 2015 Mining Code, which stipulates that a mining permit may be withdrawn following a 60-day formal notice that has remained unsuccessful when exploitation work has been suspended, without authorisation, for more than two years. It can also be withdrawn for non-payment of fees and taxes provided for in the mining regulations and for the company’s lack of technical and financial capacity to honour its commitments. At the time, Balaji had not lacked arguments, including the security situation leading to difficulties in accessing the site and the terrorist attacks to which the mine has fallen victim on several occasions, to justify the lack of activities. Baladji then promised to resume activities in August 2021. Seeing nothing coming after August 2021, the government proceeded to withdraw.
Baladji owes 18 billion FCFA to former workers and Ecobank
The Baladji Group is the subject of 2 other lawsuits. The first is the work of the ex-workers who are demanding the payment of 7 billion FCFA of damages and the second by Ecobank for dissipation of materials.
In 2013, this bank granted a loan of 30 billion FCFA for the construction of the ore processing plant and to acquire mining machinery and light equipment. The mine has not been able to honour the repayment and still owes 11.7 billion FCFA. The bank seized the assets in order to sell them at auction. In the absence of buyers, Ecobank Burkina was the purchaser of all the assets. Balaji repurchased the mine with these debts and offered to buy back all the auctioned assets. But Ecobank discovered that Balaji had dissipated part of the assets. Ecobank went to court and this other court case is ongoing.
Pierre Balma
#Mines_Actu_Burkina
