Burkina Faso nationalizes two gold mines amid ongoing legal dispute

Burkina Faso has finalized an agreement to nationalize two gold mines for approximately US$80 million, a deal originally set for over US$300 million with Lilium Mining by Endeavour Mining Plc.

Under the revised arrangement, Lilium will transfer ownership of the Boungou and Wahgnion mines to Burkina Faso. The West African country will pay Endeavour US$60 million in cash and grant a 3 percent royalty on up to 400,000 ounces of gold produced from the Wahgnion mine, which is estimated to be worth around US$20 million.

As part of the settlement, both Endeavour and Lilium will drop their legal disputes. Endeavour had sought arbitration in March over unpaid dues, while Lilium countered with a claim alleging Endeavour had misrepresented financial and operational details about the mines.

Endeavour has expressed gratitude for the mediation efforts by Burkina Faso’s government, while Lilium Mining, a subsidiary of Lilium Capital founded by Burkinabe businessman Simon Tiemtore, has refrained from commenting. Burkina Faso’s junta has yet to respond to requests for comment.

This action by Burkina Faso reflects a broader trend among African nations seeking increased control over their natural resources, particularly as military regimes rise to power. For example, in June, Niger’s military junta revoked the mining license of French state-owned Orano for the Imouraren uranium mine, one of the largest globally. Orano has since taken legal steps to safeguard its rights.

Burkina Faso, Mali, and Niger – countries grappling with a decade-long Islamist insurgency that has led to extensive casualties and displacement – have also experienced several coups since 2020. These nations have shifted away from former colonial power France and the broader Western community in favor of closer ties with Russia.

In Mali, gold miners like Barrick Gold face potential government pressure to increase their stakes in new projects due to a revised mining code introduced last year. Burkina Faso has similarly updated its mining code to secure higher royalties from mining companies amid declining gold production and the closure of several mines due to ongoing security issues.

Endeavour Mining, a leading gold producer, has expanded rapidly through acquisitions and divestitures, becoming a major London-listed company with a portfolio of five operating mines in Burkina Faso, Ivory Coast (Côte d’Ivoire), and Senegal.