Burkina Faso seeks new partner for $1 billion manganese project
(Bloomberg) — Burkina Faso is looking for a new partner to mine the world’s largest manganese deposit after rights disputes thwarted two earlier attempts to develop the $1 billion project.
Pan African Minerals, a unit of Timis Mining Corp., was told to stop production at the Tambao mine in 2015 following a change in leadership in the West African nation. The company then petitioned the International Court of Arbitration in Paris to prevent its permit from being withdrawn, but the case is still pending.
“It makes sense that we find a strategic partner who is reliable and start a new project,” Mining Minister Oumarou Idani said in an interview in the capital, Ouagadougou. He cited a “breakdown of confidence” between the government and Pan African Minerals, which is seeking as much as $4 billion in damages.
“They didn’t respect their obligations,” he said.
Souleymane Mihin, managing director of Pan African Minerals, said by phone he couldn’t comment because the court case is ongoing.
With estimated reserves of 100 million metric tons, Tambao is the world’s largest resource of manganese. Tambao was the focus of an earlier rights dispute between Burkina Faso and Dubai-based Wadi al Rawda Investments LLC, which signed an exploitation agreement in 2007. The dispute was settled in 2013.
While the manganese project has been dogged by delays, Burkina Faso has seen a surge in gold mining in the past decade. Output jumped to 47.5 tons last year and may reach 55 tons in 2018 as a new mine developed by Canadian company Semafo Inc. is expected to start production this year, Idani said.
There are three areas in the country that may contain oil, and the government last week told the mining ministry to write an oil code, he said. “Oil production is very expensive and to get investors you have to have oil legislation that protects them,” he said.
Gold accounted for 8.5 percent of the country’s gross domestic product in 2015, the latest figure available, according to government data.
(Written by Simon Gongo)