Burkina Faso has officially raised its free-carried interest in major gold mining projects from 10% to 15% under its new Mining Code, signaling a strategic pivot toward greater control over its natural resources. 

This reform, implemented in August 2024, marks a turning point in the country’s approach to managing its vast gold reserves, which constitute over 70% of its export earnings.

Ranked as the fourth largest gold producer in Africa, after Ghana, South Africa, and Sudan, Burkina Faso has long relied on foreign mining companies to explore and exploit its mineral wealth. While these firms, which are mainly from Australia, Canada, and the UK have brought capital and technical expertise, the returns for local communities and the state have historically been modest. Most profits have been expatriated, leaving limited economic impact within the country.

The 2024 revision to the Mining Code was introduced under Captain Ibrahim Traoré’s administration, which came to power in 2022. Since assuming leadership, Traoré has placed resource nationalism and sovereignty at the center of his economic agenda, emphasizing that the Burkinabè people must benefit more substantially from their country’s gold riches.

The reform increases the state’s free-carried equity stake to 15%, meaning the government will receive a larger share of profits from mining operations without having to contribute capital investment. This adjustment will apply to both existing and new projects, including the high-profile Sanbrado, Kiaka, and Toega gold mines operated by Australia-listed West African Resources.

Despite initial uncertainty, West African Resources has agreed to the updated terms, with Chairman Richard Hyde affirming that the company’s 2025 production guidance of 190,000 to 210,000 ounces of gold at an all-in sustaining cost under $1,350 per ounce remains unchanged. Construction of the Kiaka project is also progressing as scheduled, with the first gold pour expected in Q3 2025.

From an industry perspective, the reform is part of a wider African movement demanding fairer mining agreements and stronger national benefit. Similar resource nationalist policies are being considered or implemented in other mineral-rich countries like Tanzania, the Democratic Republic of Congo, and Zambia.

However, while this shift may improve government revenues and domestic ownership, it also presents risks. Some investors may view increased state involvement as a signal of regulatory unpredictability or future nationalization threats, potentially affecting foreign direct investment.