This is a column by Abdel Khalifa DIARRA, President of the Chamber of Gold and Precious Metal Counters of Burkina Faso. He is an expert in trading and small-scale exploitation of precious metals after the appointment of the new government.
Burkina Faso has had a transitional government since 25 October 2022; according to the Prime Minister, His Excellency Mr Appolinaire KYELEM De TAMBÈLA, it is a combat government. The first observation that can be made in the ministerial department in charge of mines is the reunification of the department in charge of mines and quarries with that of energy. Mr Simon Pierre BOUSSIM has inherited this ministry in a context where “everything is urgent” and in which “it is necessary to move quickly”. Minister BOUSSIM will have to move very quickly in the implementation of the new organisation chart of this strategic ministry by avoiding unnecessary administrative burdens; at this level, he has a definite advantage because in the past, these two ministries were merged. It is therefore sufficient to dust off an old organisation chart of this ministry, correct the imperfections and have it validated. Normally, this should happen very quickly so that the department can focus on developing the mining, quarrying and energy sectors.
On the mining front, the Minister is expected to work on several issues, including the continuation and adoption of texts enshrining certain reforms within the mining sector. These include, in priority, the following:
1- The draft decree on the regulation of gold smelters and other precious substances, gold refineries and units for processing mining residues containing precious metals in Burkina Faso. As a country whose main export is gold, Burkina Faso does not have a gold refinery. This is due to the absence of a legal regime applicable to gold refining, as in mining, prior authorisation from the administration is required before any operations can be undertaken. This lack of a legal regime has been a real obstacle to the installation of industrial gold refining units in Burkina, despite the many attempts of national and international economic operators. The draft text currently being adopted should therefore correct this shortcoming and many other situations in order to allow the development of another aspect of the mining sector: smelting, refining and processing of mining residues. However, Minister BOUSSIM will have to take steps to ensure that this decree is the result of a consensus between the mining administration and the various economic actors in the mining sector so that it can play its role fully and achieve its objectives. From what we know of this draft text, there is no unanimity because it contains several shortcomings that could lead to the creation of a monopoly situation or an effect contrary to the desired one. It is therefore urgent that a workshop to amend this text be organised in order to perfect it and rid it of all the provisions that could be counterproductive.
2- The fight against gold marketing fraud Fraud in the marketing of gold is a major problem in the artisanal mining sector. The state does not have reliable statistics on the quantities of gold extracted by artisanal miners. But what is known is that only a small percentage of artisanal gold production goes through the legal circuit. In order to put an end to fraud in the marketing of gold, the National Anti-Gold Fraud Brigade was created; but this has not really had the desired result, since fraud persists and is gaining ground. The idea was therefore put forward to look for the causes of fraud in the marketing of gold and one of the determinants of this situation is the high cost of the “extraction rights” of a gram of gold in Burkina which is 200 FCFA. The extraction rights for a kilogram of gold in Burkina are therefore 200,000 FCFA; this is only part of the problem, as the state does not collect these rights from gold miners and has not carried out an awareness-raising campaign in this regard. The administration recovers these extraction rights from the gold merchants when they export the gold, although they have not withheld them from the purchase price of the gold from the artisanal miner. This results in an abnormal increase in the cost of gold export operations, pushing some actors to take illegal export routes. A project to modify the amount of extraction fees has therefore been initiated by the mining administration, but at this level, the formulation of the relief provisions will lead to a situation where the objectives pursued are not achieved. It is urgent to adopt an inclusive approach with all actors in order to put an end to fraud in the marketing of gold by putting in place a simple system for the collection of extraction rights for artisanal gold production. The Chamber of Gold and Precious Metal Counters of Burkina Faso has already identified solutions to reduce fraud in the marketing of gold and will submit its solutions to Minister BOUSSIM at the appropriate time.
3- Strengthening the capacities of the National Agency for the Supervision of Artisanal and Semi-Artisan Mining (ANEEMAS), the creation of a one-stop desk, and the dematerialisation of the mining cadastral procedures with a view to its reopening. ANEEMAS is a very important structure for the artisanal mining sector, which is a driving force for economic development in several regions of Burkina Faso, but it is clear that it is not sufficiently equipped with the means and capacities to carry out its mission of supervising the artisanal mining sector. It is therefore important to provide this agency with adequate resources so that it can fulfil its supervisory role. Furthermore, it is not useful that ANEEMAS has the status of a state gold buying counter, as this attribution prevents it at a certain level from fulfilling its supervisory mission. The state would benefit from creating a national gold buying and marketing counter that would only buy gold from private comptoirs regularly established in Burkina. As the President of Faso has said, we must put an end to unnecessary administrative burdens, and in the mining sector, there is plenty of them. Minister BOUSSIM will make a positive impact during his time at the head of the Department of Energy, Mines and Quarries if he succeeds in setting up and making effective a one-stop desk to handle gold export operations, because to date, gold exports in Burkina Faso go through several administrations, which makes this operation unnecessarily complicated; a one-stop desk is eagerly awaited by the gold buying and marketing companies. This counter could, for example, be housed at ANEEMAS and be made up of agents from the various administrations involved in the export procedure in order to improve the processing time of operations. With regard to the mining cadastre, we believe that for a mining country, it is a disaster that the mining cadastre is closed for more than a year, causing the state to miss out on several mining investment projects, because the first step in a mining investment project is to obtain a mining title or authorisation. The difficulties in the functioning of the mining cadastre that led to its closure can be solved by digitising the operations of the mining cadastre. A digital platform can be made available to actors for their applications for permits and various other mining documents. This will allow for better monitoring and speed in the processing of applications. Finally, there is the thorny issue of VAT on raw gold, which will have to be settled in good understanding with the Minister of Economy, Finance and Forecasting, the issue of liberalising the gold trade in Burkina, and the issue of securing the various mining sites by strengthening the capacities of ONASIM.
Abdel Khalifa DIARRA President of the Chamber of Gold and Precious Metal Counters of Burkina Faso, Expert in trading and small-scale exploitation of precious metals.
