Burkina Faso Takes Control of Gold Mines Following Dispute Resolution
Mon Sep 02 2024
Burkina Faso has nationalized two gold mines, Boungou and Wahgnion, following a legal settlement between Endeavour Mining PLC and Lilium Mining. The decision concludes a protracted legal dispute between the two companies over the ownership and financial obligations related to the mines.
The government of Burkina Faso will pay Endeavour Mining $60 million and a 3% royalty on up to 400,000 ounces of gold produced at the Wahgnion mine. This agreement marks the end of legal proceedings that had been ongoing since March. Endeavour had accused Lilium of missing over $100 million in payments, while Lilium countered that Endeavour had misrepresented the financial status and operational capabilities of the mines.
The nationalization of the mines is part of a broader trend in Africa, where governments, particularly those under military regimes, are increasingly asserting control over natural resources. This move follows similar actions in other African countries, such as Niger, where the military junta recently revoked the mining license of a French state-owned company.
Endeavour Mining, which operates gold mines across Senegal, Ivory Coast, and Burkina Faso, expressed gratitude to the government of Burkina Faso for its mediation efforts. Lilium Mining, a subsidiary of Lilium Capital, founded by US-Burkinabe businessman Simon Tiemtore, declined to comment on the settlement.
The Boungou and Wahgnion mines were initially sold by Endeavour to Lilium for over $300 million. However, disputes arose shortly after the sale, leading to arbitration in London. The settlement agreement requires both companies to abandon their legal claims against each other.
The nationalization of these mines is expected to have significant implications for the mining industry in Burkina Faso and the broader region. It underscores the increasing willingness of African governments to take control of their natural resources, a trend that has been gaining momentum in recent years.
The government of Burkina Faso has not yet detailed its plans for the future operation of the Boungou and Wahgnion mines. However, the move is seen as a strategic effort to maximize the country’s benefits from its natural resources.
Source: https://www.africa.com