Assault on Canadian miner in Burkina Faso threatens gold’s last frontier

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NAIROBI/JOHANNESBURG/LONDON (Information) – As jihadists wreaked ever extra havoc within the final two years, mining companies in Burkina Faso rolled out further safety measures, from barracks for presidency troops defending them to secure rooms for employees behind barbed wire and piles.

Individuals are seen close to a hospital in Ouagadougou, the place among the wounded had been taken for remedy, after an ambush on employees close to a Canadian-owned mine in Burkina Faso November 7, 2019. Information/Bado Vincent NO RESALES. NO ARCHIVES

Expatriates usually fly out and in, whereas native employees nonetheless drive however in guarded convoys.

That has added hundreds of thousands of dollars to safety prices for international corporations, primarily from Canada and Australia, working within the West African nation the place industrial miners are forecast to provide 60 tonnes of gold this yr.

But this week’s assault on a convoy ferrying lots of of native workers and contractors from a mine owned by Canada’s Semafo has uncovered simply how susceptible companies nonetheless are.

A minimum of 37 civilians died, with one other 60 injured and dozens extra feared lacking.

Deserted buses and pickups lay riddled with bullets. Bloodied our bodies had been slumped within the autos and on a purple grime street. Navy reinforcements arrived however solely after the lead escort car was blown up, officers stated.

“That is the deadliest incident concentrating on the mining trade, or any personal companies, within the Sahel for the reason that 2013 In Amenas hostage disaster,” stated Vincent Rouget, an analyst at Management Dangers Group, referring to an assault on a fuel plant within the Algerian desert that killed dozens of international hostages.

There was no declare for Wednesday’s ambush, however the modus operandi – a bomb assault on army escorts adopted by gunmen unleashing bullets – advised the involvement of Islamist teams. They’ve been pushing south from strongholds in northern Mali to hold out assaults throughout a lot of Burkina Faso and components of western Niger.

Over 1,000 individuals have been killed in Burkina Faso since 2016 and almost 500,000 extra have fled their properties, primarily this yr. On this time, there have been dozens of assaults on industrial and small-scale mining operations.

It’s an acute dilemma for miners.

The area is seen because the gold trade’s last frontier, with giant untapped reserves. Lured by comparatively low-cost mining, companies have invested billions during the last decade – however enlargement by al Qaeda and Islamic State-linked militants may drive them to rethink.

WORTH THE RISK?

“Due to the escalating safety state of affairs in Burkina, there are corporations reducing their publicity to the nation or leaving,” stated Invoice Witham, the top of AAMEG, a physique representing Australian useful resource corporations in Africa.

“However the miners nonetheless see West Africa as an entire as fairly a great funding.”

Semafo’s Toronto-listed shares dropped 10 % after the assault. And main mines simply over the borders in northern Ghana and Ivory Coast are actually inside putting distance of Islamist strongholds, consultants warn.

Final yr, AQIM, the primary al Qaeda affiliate in West Africa, informed followers Western corporations, particularly from France, had been “reputable targets”.

Semafo, whose employees, contractors or escorts have been attacked three time within the final 18 months, declined to remark additional, saying solely that it had beefed up safety since these episodes.

Eight different corporations contacted by Information across the Sahel wouldn’t give particulars of their further safety prices.

West Africa has lengthy been thought-about a dangerous prospect the place political instability, unstable tax regimes and difficult relations with small-scale miners weigh closely on boardrooms.

But authorities incentives and the potential to provide gold comparatively cheaply led to over $7 billion invested in mining tasks within the area between 2004 and 2018, in line with a tally by S&P International, a market intelligence firm.

This peaked at $1.2 billion in 2012 alone, when gold costs had been at an all-time excessive.

That yr, al Qaeda-linked teams took over northern Mali however gold operations had been unscathed as most mines are within the south, lots of of kilometers away from militant strongholds.

Since then, France has deployed over four,000 troops to the area, there’s a 16,000-strong United Nations peacekeeping mission in Mali, and West African leaders have launched regional safety initiatives. Nevertheless, native armies are shedding floor.

Since 2017, researchers documented at the least 28 violent incidents at mines or involving mining employees in Burkina Faso, 17 of them this yr, in line with a Information evaluation of information compiled by the Armed Battle Location & Occasion Information Venture.

A minimum of 12 of these occasions this yr, which embrace assaults on employees, abductions and the usage of improvised explosive units, had been linked to jihadists. Previous to Wednesday, at the least 54 individuals had been killed in mining-related violence this yr, 5 occasions as many as all of 2018.

“BRACING FOR AN ATTACK”

This has pressured the trade to just accept that the risk has unfold nicely past Niger’s northern deserts, the place the likes of Frances’s Areva have uranium mining operations and expatriates have been kidnapped, stated Rouget.

In October 2018, France scrambled two jets to strike militants attacking a gold mine in northern Burkina Faso.

Earlier this yr, Burkina Faso’s authorities requested mining companies to assist fund a fast response unit with helicopters to answer incidents like Wednesday’s, however the initiative didn’t materialize, in line with two individuals concerned in conferences.

One firm safety official stated his agency spent hundreds of thousands of dollars on armored autos, bullet-proof partitions and security rooms. “We’re bracing for an In Amenas-style assault,” he stated.

Nevertheless, some analysts consider mines nonetheless have enough defenses.

“The one factor that may shift the notion amongst gold miners that publicity to this insecurity is a danger price taking is a direct assault on a mine website – an unlikely prospect,” stated Eric Humphery-Smith in danger consultancy Verisk Maplecroft.

The highest investor in Semafo stated danger and gold mining went hand-in-hand, and additional safety prices wouldn’t be a game-changer.

“Clearly it is going to add perhaps a couple of dollars to the price of producing an oz. of gold, however it isn’t going to vary the general economics,” stated Joe Foster, gold fund portfolio supervisor at VanEck Funding Administration, which has a 10.1% stake in Semafo.

One quick impression could possibly be restrictions on how far afield companies are ready to ship geologists.

In Might, Oumarou Idani, Burkina Faso’s minister of mines, recognized exploration corporations as excessive danger. “They work over giant areas, typically 250 sq. kilometers … it’s troublesome to have a safe means of working over that measurement of space.”

Months earlier, Kirk Woodman, a Canadian geologist with 20 years’ expertise within the area, was kidnapped and located lifeless.

That was a “an enormous wakeup name”, a former senior mining government who’s now an investor informed Information.

“Miners are going to danger exploring additional afield quite a bit much less now,” he stated, asking to not be named. “This may have an effect on what number of new gold deposits are discovered.”

(Map of assault: here)

David Lewis in Nairobi, Helen Reid in Johannesburg, and Zandi Shabalala and Ryan McNeill in London; Modifying by Andrew Cawthorne