Burkina Faso has awarded an industrial mining license to Russia’s Nordgold for a new gold project, signaling deeper economic ties between the country and Russia. The move, announced by the military-led government on April 25, aims to capitalize on high gold prices to bolster an economy affected by ongoing security challenges.
The Niou gold project, located in Kourweogo province, spans 52.8 square kilometers within the exploration area previously held by Jilbey Burkina, now owned by Nordgold. This new mine adds to Nordgold’s operations in the region, including the Bissa and Bouly mines. The government expects the Niou mine to produce 20.22 metric tons of gold over the next eight years.
Under the terms of the agreement, Jilbey Burkina will retain an 85% stake in the project, while the Burkinabe government will hold 15%, as per the country’s updated mining regulations. The project is projected to contribute 51.5 billion CFA francs (approximately $89 million) to Burkina Faso’s budget and 7.06 billion CFA francs to the national mineral wealth fund.
The gold industry has gained traction as gold prices have surged by more than 25% this year, driven by geopolitical tensions and U.S. trade policies. Burkina Faso, already a key gold producer, produced over 57 tons of gold in 2023, according to Swissaid, a non-governmental organization that monitors mining activity.
While the partnership with Nordgold is seen as vital to Burkina Faso’s government, which is facing financial strain amid a persistent fight against Islamist militants, it could have social consequences. The Niou mine is situated in a large artisanal mining area, where local miners rely on small-scale operations for their livelihoods. Experts like Ulf Laessing from the Konrad Adenauer Foundation warn that the industrial project might displace these workers, potentially depriving them of essential income.
The project, however, is expected to create around 204 jobs, while also providing support for employment at the nearby Bissa Gold SA mine.
