Burundi Halts Rare-Earth Mining over Low Revenue Generation

The government of Burundi has confirmed the suspension of the operations of several international mining companies, complaining it was not getting its fair share of income from the country’s mineral wealth.

In a letter to the companies, Mines Minister Ibrahim Uwizeye said the decision was taken earlier this month because of “numerous failures” regarding the country’s mining code.

“The state, which owns the soil and minerals, is not making a profit as it should,” the letter said.

Uwizeye described the mining contracts as “unbalanced”.

While reflecting on a better way to improve the mining contracts, he said “… we want to renegotiate all these agreements for the benefit of the people because these minerals must be used to finance the development of the country,”

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The seven companies involved are of British, Chinese, and Russian origin but the main target of Burundi’s ire is UK-listed Rainbow Rare Earths.

Rainbow, via a subsidiary that is 10-percent owned by the Burundi government, operates Gakara, the only producing rare-earth mine in Africa.

Rare-earth minerals are crucial to the manufacture of magnets used in industries of the future like wind turbines, robots, and electric cars, as well as consumer goods such as smartphones, computer screens, and telescopic lenses.

Others companies whose operations have been suspended are involved in mining gold and coltan, which is used mainly in electronic devices.

Burundi had high hopes from its industrial mining operations, particularly rare earth, but revenue so far has been less than expected.

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Uwizeye said Burundi was demanding a more equitable share of the revenue from the Gakara project and had ordered Rainbow to halt exports of rare earth concentrates until the situation was resolved.

President of Burundi’s main anti-corruption watchdog Olucome, Gabriel Rufyiri,” disclosed that the nation expects to earn about $1.5 million from mining in the 2021 fiscal year… this is very little compared to what is exported,”

President Evariste Ndayishimiye, who took office in June 2020, has made fighting corruption a top priority in Burundi, which has for years been ranked among the top 10 most corrupt countries, according to Amnesty International.

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