The new Burkina Faso mining code, passed by its acting parliament - the National Transitional Council on 26 June – has made it compulsory to contribute towards local community development.

More specifically, the new code introduces a monthly payment of 1% of the turnover of companies to a designated fund for local mining communities. In a step that reveals its own commitment towards this new initiative, the state will pay 20% of its mining revenues into the fund.

Additional changes in the new mining code include the removal of a 10% tax break on profits and further includes the elimination of some customs duties and tax exemptions, and the imposition of value-added tax on mining equipment.

This is the first time in 12 years changes have been made to Burkino Faso’s mining code which was among requirements set by the World Bank for the release of US$100 million in budget support for the West African country. The funds were frozen in February pending passage of the new code and an anti-corruption law, which was adopted in March.

Attempts to amend the 2003 mining code started in 2010 following a 41% increase in gold production and a rise in gold prices. The country's gold-mining sector is now the fourth largest in Africa after South Africa, Ghana, and Mali.

What caused the delay?

The first draft of the mining code was adopted by the Council of Ministers in October 2013 but was later suspended in February 2014 due to low commodities prices and pressure from the local mining lobby.

However, President Blaise Compaoré, in power for 27 years, was forced out of office in a popular uprising in October 2014. His departure brought in place the transitional government and the National Transitional Council, which comprises largely civil society representatives, a constituency that has been advocating receipt of more revenue from the mining sector.

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