Burundi: foreign mining companies suspended

In Burundi, the State has stepped up efforts to develop the country's mineral resources. After President Evariste Ndayishimiye expressed the wish to renegotiate operating contracts, the government suspended the activity of all companies in the sector.

In Burundi, the big cleaning has started. "The State, owner of Burundian soil and minerals, is not making the profit it should", indicates a letter sent to foreign mining companies active in Burundi. The Minister of Mines, Ibrahim Uwizeye, also denounces, in the same letter, the "numerous breaches of the mining code" of which these companies are accused. Seven international mining companies received the same letter on Thursday. For the government, current mining agreements are unbalanced. The head of state, Evariste Ndayishimiye, wants to establish a win-win relationship with mining companies operating in the country.

This step, which shows the great courage of the Burundian authorities, takes place in a favorable diplomatic context. Burundi is currently playing the role of lever for relations between Central Africa and East Africa. President Ndayishimiye made a comeback in his country's diplomacy in the two sub-regions. Not only he signed cooperation agreements with the DRC, but also with Tanzania and Kenya. Currently, Burundi is well placed to assert its sovereignty in all areas. This will undoubtedly require a nationalization of the industrial mining sector. The royalties and shares of state-owned enterprises in the mining sector simply do not match the amounts raised by international mining companies.

5. So I am happy to be at #Kinshasa and to have witnessed the signing of agreements that will revitalize trade, social, political and diplomatic exchanges between the #Burundi and #RDC. Our friendship and diplomatic ties were already excellent and solid. pic.twitter.com/RdFb81Srtq

- HE Evariste Ndayishimiye (@GeneralNeva) July 13th, 2021

A more sovereign mining industry

Burundi is endowed with significant deposits of rare earths, gold, iron and copper. The late President Pierre Nkurunziza also prided himself on the “real treasure” on which Burundi would sit. He promised in 2015 that “Burundi will say goodbye to poverty”. However, the contracts signed between the Nkurunziza regime and the mining companies provided only for 10% of the profits for the State, and no royalties.

In light of the discovery of new deposits, President Evariste Ndayishimiye had put a brake on the transfer of mining contracts to foreign companies. However, the national companies do not have the technical capacities to carry out an efficient and competitive exploitation of these fields.

So, taking advantage of the new transport and infrastructure contracts signed with neighboring African states, Ndayishimiye killed two birds with one stone. First, he ended the isolation of Burundi. He is counting on the renewed friendship with Kenyatta, Félix Tshisekedi and Samia Suluhu Hassan, among others, in order to impose the Burundian voice in the two sub-regions. Second, he put pressure on Western mining companies, before completely shutting down their activities while waiting to renegotiate contracts in favor of the state. Lastly, above all, it wishes to attract new investors for the deposits discovered in December 2020.

Among the seven mining companies affected, Gakara is the only rare earth mining player in Africa. On another level, Ndayishimiye intends to lead by example by fighting corruption within state bodies. The mining contracts called into question would have been "signed in total secrecy". The president seeks to stand out from his late predecessor, accused of having received bribes against the signing of contracts that are nevertheless disadvantageous for the state.

🔴🇧🇮🇹🇿 #Burundi-#Tanzania The president @SuluhuSamia received with great fanfare on the steps of @NtareHouse by his counterpart @GeneralNeva.
21 cannon shots were fired. No foreign head of state had so far been entitled to such honors.
8 memoranda of understanding will be signed pic.twitter.com/uLqv70kTxf

- Ikiriho (@Ikiriho) July 16th, 2021