Description: Burkina Faso’s junta leader, Ibrahim Traore, inaugurated the country’s first gold refining factory in Ouagadougou. Traore stated that the project was primarily financed by the government in cooperation with the National Precious Metals Company (Sonasp) and in partnership with the country’s private sector. The refinery would have a capacity of 164 tons per year with the expected capacity of 515 tons in couple of years. Foreign companies looking to enter the country’s gold production industry would be subjected to 15% tax and would have to use domestic workforce. The move is part of Traore’s strategy to nationalize Burkina Faso’s industrial capabilities in order to reduce reliance in several sectors from former western partners. Since overthrowing the government, Traore has devised closed bilateral ties with Vladimir Putin and Russia, which is Burkina Faso’s major strategic partner.
Impact: Traore’s nationalization of Burkina Faso’s mineral wealth is likely to make him and his regime a target for foreign powers which aim at countering Russia’s influence in the country or establishing political, military or economic ties to exercise influence over the country. The inauguration likely nominally regulates Burkina Faso’s gold production but it’s unlikely to resolve the issues of artisanal mining operations which are frequently exploited by terrorist organizations operating in the country. Russia, as Burkina Faso’s strategic partner, is highly likely to receive favorable conditions for investments in the country’s gold production industry which in turn likely provides Russia with a major financial valve to finance its war efforts in Ukraine and keep the ailing national economy afloat. Terrorist groups are likely to increase their activities in the highly unregulated artisanal mining sector, which likely indicates that security instability would remain Burkina Faso’s major short to mid – term challenge.