The price of gold has increased by 30% since the start of the year, benefiting Burkina Faso, where gold constitutes 77% of exports, 16% of GDP, and 22% of government revenue, according to the World Bank.

Canadian Orezone Gold reported a 23% rise in revenues for the third quarter of 2024, year-on-year, despite lower production and sales. The company, which runs the Bomboré gold mine in Burkina Faso, saw its average selling price reach $2,473 per ounce, up from $1,019 per ounce a year earlier. 

Orezone sold 27,698 ounces for $68.5 million in Q3 2024, against 29,167 ounces for $55.7 million in Q3 2023. Although production dropped by 13.5% year-on-year to 26,581 ounces, the higher gold prices offset this decline.

Gold prices have risen by around 30% since the beginning of this year and hit an all-time high of $2,686 per ounce in September. Australia’s West African Resources, which operates the Sanbrado gold mine in Burkina Faso, also benefited from rising prices. By the end of September 2024, it achieved an average selling price of $2,493 per ounce up 29% from the third quarter of 2023 resulting in a 26% year-on-year revenue increase to $123.76 million while maintaining stable sales volumes.

The Burkina Faso government will receive part of these increased revenues through mining royalties. In 2023, Ouagadougou reformed its royalty structure to impose a 7% royalty when gold prices exceed $2,000 per ounce, compared to a lower rate when prices are between $1,500 and $1,700 per ounce. The government could also gain more revenue from its minority shareholdings in gold mines and various taxes.

President Ibrahim Traoré has stated that the government will become more involved in the mining sector. This year, the state purchased the Boungou and Wahgnion gold mines from Endeavour Mining. The Société de Participation Minière du Burkina (Sopamib) and the Agence pour la Promotion de l'Entrepreneuriat Communautaire (Apec) are expected to take control of additional gold mines soon.

However, the revenue surge for gold producers and potentially for the state depends on gold production levels. Since 2022, production in Burkina Faso has declined due to terrorism threats. The country produced 57.3 tonnes in 2023 compared to 66.8 tonnes in 2021. The World Bank reports that insecurity is disrupting industrial gold mining.

Gold contributes 77% of Burkina Faso’s exports, 16% of GDP, and 22% of government revenue.

Emiliano Tossou