Burkina Faso denies favouring Russia's Nordgold over gold mine permit

Burkina Faso did not award a mining permit to Nordgold because it is a Russian company, its mines minister told Reuters on Sunday, rebuffing Western concerns that the ruling junta is seeking closer ties with Moscow.

"We didn't give the permit to Nordgold because it is a Russian company, far from it," Simon-Pierre Boussim told Reuters in an interview on the sidelines of the Mining Indaba conference in Cape Town.

"We do not give permits to people because they are from Russia, or from the United States... we give permits to companies that pay taxes and respect our laws."

The government - which took power in September in the country's second coup in just eight months - granted a gold mining permit to Nordgold in December.

Nordgold operates the Bissa and Bouly mines in the gold-rich West African country. It also owns the Taparko mine, which it shut down in April last year due to security risks.

Nordgold applied for the Yimiougou mine permit in 2017, Boussim said. The mine, in the Centre-Nord region's Sanmatenga province, is expected to produce 2.53 tonnes of gold over its four-year life, according to the government.

Mines ministry official Jean-Baptise Kabore said the mine aims to start production this year.

Nordgold, which is under U.S. sanctions, did not immediately respond to a request for comment.

Ghanaian President Nana Akufo-Addo in December caused controversy by saying Burkina Faso had hired mercenaries from Russia's Wagner group to help it fight Islamist militants, and was paying them through a mine.

Burkina Faso has denied paying Russian mercenaries by giving them the rights to a mine, but has not formally confirmed or denied the allegation that it has made an agreement with Wagner.

Burkina Faso's neighbour Mali hired Wagner last year to help it fight insurgents.

The prospect of the group expanding its presence in Africa has troubled France and the United States, who say it exploits mineral resources and commits human rights abuses in countries where it operates.

Worsening conflict in Burkina's north has dented gold production, causing several mines to shut down and others to produce less.

Endeavour Mining's Boungou mine produced 35% less gold in the first three quarters of 2022 compared to the same period in 2021.

Lower productivity was partly due to delays in getting security escorts for convoys that deliver supplies to the mine in the country's east, the company said.

Boussim said he believes that gold production will increase and the government will gain better control over the security situation in the coming months.

"A mine cannot be safe unless the country itself is safe," Boussim said.

Burkina Faso plans to build a gold refinery to increase the value it gets from its mineral resources. Boussim said the government was receiving interest from investors, without specifying elaborating.

The government has not yet decided whether the refinery will process gold from industrial mines or also from the country's vast artisanal mine sector, Boussim said.