The main laws applicable to mining activities are:

• the Mining Code adopted by the National Transition Council on 18 July 2024 modifying the  Mining Code of 26 June 2015 and signed by the President on 16 June 2016 (the “New Mining Code”)
• The Law No 017-2024 dated 18 July 2024, relating to local content in mining sector in Burkina Faso
• The Order (Arrêté) dated 29 December 2023 modifying the Order (Arrete) 30 December 2021 establishing the list of goods and services provided by mining compagnies
• Investment Code (Law No 038-2018/AN dated 30 October 2018)
• The Tax Code dated 2023
• The Environment Code (Law No 006-2013/AN dated 2 April 2013)
• The Law No 028-2017/AN dated 18 May 2017 organizing gold and others precious substances in Burkina Faso
• The Order (Arrêté) N°2024-0022/MEMC/SG/DGCM dated 24/01/2024 on cadastral proceeding of mining sector
• The Order (Arrêté) N°2018/136/MMC/SG dated 16 July 2018 on exceptional renewal conditions of research permit
• The Decree N°2023-1454/PRES-TRANS/PM/ MEMC/ MEFP du 27 October 2023 modifying the Decree N°2017-0023/PRES/PM/MEMC/MINEFID du 23 January 2017 fixing taxes and mining royalties
• The Decree N°2017- 0036/PRES/PM/MEMC/ BURKINA FASO MATDSI/ MINEFID/ MEEVCC/ MCIA managing mining titles dated 26 January 2017.
• Burkina Faso is a member of WAEMU, which passed a Regulation No. 18/2003/CM/UEMOA dated 23rd December 2003 containing a Community Mining Code, and ECOWAS, which passed a Directive No. C/DIR3/05/09 harmonising guidelines and policies in the mining sector.

In accordance with those two regulations, the New Mining Code creates an obligation for the holders of mining rights and their subcontractors to give “preference to companies from Burkina Faso for any contract for the supply of goods or provision of services on equivalent prices, quality and delivery terms”. The Mining legislation envisages different mining titles: exploration permit, industrial exploitation permit and semi-industrial artisanal exploitation permit. The activities of prospecting, traditional artisanal exploitation and exploitation for quarry substances are granted by administrative authorisations.

With the New Mining Code, the Burkinabe government seeks to improve regulation and supervision of the mining industry. A technical commission is to be established to oversee the granting of exploration licences and mining conventions. Mining conventions are no longer required during the exploration phase and exploration licenses remain valid for a period of one year. By contrast, the duration of mining conventions has been reduced from 20 years (as in the previous mining code) to five years, but may be renewed for consecutive periods of five years.

Licence holders are required to notify the Ministry of Mining of any significant changes in the feasibility study as regards production estimates. Failure to adequately amend the feasibility study could give rise to penalties ranging from 100 000 000 cfa to 250 000 000 cfa. (Article 209) The New Mining Code provides for additional grounds for revoking mining titles, which include on-site employment of children, undue delay (of more than one year) or suspension of exploitation and nonrenewal of licences upon expiration. The New Mining Code provides that the exploitation licence is a right in rem on immovable property which is assignable, transferable and indivisible and may be subject to a mortgage. (Article 71)

A mining convention is only signed when an exploitation permit is granted and not during the exploration phase and its duration is five years (previously 20 years), renewable every five years.

Mining conventions can be renegotiated before their expiry date by the Minister of Mining if the technical commission mentioned above is of the opinion that such renegotiation is appropriate, and if the counsel of ministers authorises such renegotiation.

Additionally, since 2009, Burkina Faso has been a member of the Extractive Industries Transparency Initiative (EITI), an international organisation promoting and maintaining a global standard to assess the levels of transparency around countries’ oil, gas and mineral resources. The EITI Standard comprises a set of requirements that governments and companies have to observe in order to be recognised as “EITI Compliant”. Countries implement the EITI Standard to ensure that the payment of taxes and other costs made by oil, gas and mining companies to governments are fully disclosed. The EITI Standard, recently revised and replaced by the EITI Standard 2016, is the authoritative source on how countries can implement the global transparency standard for improving governance of natural resources.

Any foreign individual or legal entity can carry out mining activities governed by the New Mining Code as long as:

• following the principle of reciprocity, their country of incorporation also allows individuals or legal entities from Burkina Faso to carry out mining activities in that country; and
• they are registered in Burkina Faso and have an agent whose qualifications are lodged with the Administration of Mines.

The New Mining Code, maintains a local development fund and a rehabilitation and mine closure fund. These funds are financed through a mix of a 1% monthly tax on exploitation production, State contribution and a mandatory annual contribution from mining companies based on environmental impact assessments. The New Mining Code also introduces several obligations in support of local businesses and employees. For example, it requires that mining companies give preference to qualified local employees, businesses and contractors. Similarly, mining companies are required to provide professional training to local managers. Although the government of Burkina Faso does not require investors to purchase materials from local sources, investors lose their customs and tax advantages when they import materials available locally.

The government of Burkina Faso’s free equity participation under the New Mining Code is raised to 15%. It can now also acquire additional equity if it reaches an agreement with the mining company in accordance with the provisions of the Uniform Act on Companies. Overall, the government of Burkina Faso can subscribe to 30% at least, of share capital of the mining company.

The New Mining Code creates a ‘preferential’ dividend status whereby the government of Burkina Faso has priority in the distribution of dividends and is paid before any other allocation of distributable profits. The government of Burkina Faso can also require that payment in kind of ores extracted. 

The New Mining Code maintained several tax regime changes at the exploration and exploitation phases introduced by the previous Mining Code. Significantly, a 20% capital gains tax has been imposed on the transfer of mining titles, except where the transfer is to a company created for the sole purpose of holding an exploitation license. The standard corporate income tax rate is 27.5%. Capital gains arising from the disposal of fixed assets and shares are normally included in taxable income for half the original capital gains amount. Under the previous Mining Code, companies are guaranteed stability of the tax regime but the taxes likely to have the most impact - mining taxes, royalties and duties - are excluded from this stability guarantee. The New Mining Code continues to exclude these taxes and also reduces the stability guarantee of the included taxes from the duration of the mining convention to a maximum period of 10 years (Article 180).

A surface tax is to be paid annually by any title or authorisation holder, based on the occupied land area and the duration of the title or authorisation.

Proportional royalties related to the value of extracted or sold products are based on the value and nature of the extracted products.

Under the New Mining Code, mining licence and industrial operations permit holders are to contribute, as a special contribution, 1% of their monthly turnover (excluding taxes), or 1% of the value of the products extracted during the month, and proportional royalties linked to the value of the products collected by the government of Burkina Faso .

Interest paid to residents is taxed at 25%. This rate is reduced by half (12.5%) for income from deposit accounts and current accounts with a bank or financial broker. The rate applicable to other interest and similar payments is normally 6%. Dividends paid to residents are taxed at a standard rate of 12.5%.

Withholding tax (WHT) applies to dividends, royalties and payments to non-resident companies for services rendered in Burkina Faso. Interest paid to non-resident companies is subject to WHT at a maximum rate of 15% under the UEMOA tax treaty. Under the tax treaty with France, interest is taxed in the sourcing state giving rise to a tax credit in France.

Dividends: Dividends paid to non-residents are taxed at a standard rate of 12.5%. This is always the case, save where double taxation agreements are in place. For example, under the tax treaty with France, non-resident companies are subject to WHT at a maximum rate of 15%; under the UEMOA tax treaty, 10% of dividends gross amount; and under the Tunisia tax treaty, 8% of dividends gross amount.

Director’s fees and other products distributed to shareholders by operating enterprises that are set up as commercial companies are subject to a 12.5% or 6.25% withholding tax, which the recipient may credit against corporate income tax.

Non-resident contractor fees: in the mining sector, companies are subject to a withholding tax at the standard rate of 20% of the amount paid to a provider of services that is not registered in Burkina Faso. A reduced rate of 10% applies to mining companies but only for operations directly linked to mining activity.

Interest: a withholding tax applies to interest at the standard rate of 25%.

Royalties: Withholding tax applies to royalties at a rate of 20%.

Within the CFA Franc zone the transfer of funds is free. There are no exchange controls between Burkina Faso and the other countries which belong to the CFA Franc zone.

In line with UEMOA regulations, most financial operations must be performed through authorised (locally licensed) intermediary banks. Specific authorisations must be obtained to open offshore accounts or onshore foreign currency accounts.

In addition, pursuant to the UEMOA regulations onshore and offshore accounts in foreign currency held by Burkinabe entities are subject to an approval of the Minister of Finance (acting with a prior consent of the BCEAO (Central Bank of the UEMOA)). In practice, the opening of offshore or onshore accounts in a foreign currency may prove difficult.

All revenues from the sale of minerals must be repatriated to Burkina Faso within one month from the due date of payment, which in turn must occur within one hundred and twenty (120) days from the date of shipment.

There is the possible exception in the UEMOA regulations which arguably permits the opening of a foreign currency account in France without consent (since France is within the ‘zone franc’). The position is not clear in this regard – there are differing views on how/whether this works, especially given that onshore foreign currency accounts require approval.

Exchange control regulations apply in Burkina Faso. Subject to compliance with foreign exchange regulations foreign investors have the right to transfer, in the currency used at the time of the investment, profits, all types of proceeds from the invested capital, proceeds from liquidation or realisation of their assets and salaries. 

The revised OHADA Uniform Act on Security Law (the “Uniform Act”) adopted on 15 December 2010 brought substantial changes to the existing security legislation and made secured lending more streamlined and effective (note that the Uniform Act governs all security created on or after 16 May 2011 - all security created before 16 May 2011 will continue to be governed by the former Uniform Act). Whilst the Uniform Act allows lenders to take security over a broad range of assets in Burkina Faso, it does not regulate all types of security (e.g. security over mining titles). That will be set out in the mining code for the particular jurisdiction - sometimes the mining title is considered as a movable asset, and sometimes an immovable asset, and it can be difficult to obtain security in practice as there is no specific registry.

There is no concept under the Uniform Act similar to an English-law style floating charge covering all or most of a company’s assets. Generally each type of asset is subject to a specific security with different creation and perfection requirements. Under the Uniform Act, it is possible to take security over future assets and to secure future debts if such future assets or future debts are sufficiently identified.

Generally, the local security package granted in connection with a project financing includes:

• Pledge of shares or financial instruments (nantissement de valeurs mobilières et comptes titres): Share security is usually taken in respect of any material companies in Burkina Faso (i.e. those holding mining titles) which will allow the lenders to foreclose on the pledged shares upon the occurrence of an event of default under the relevant financing. The Uniform Act also provides that a pledge can be taken in respect of the shares of a company or its securities account (which includes any securities/shares credited to the securities account and any cash proceeds such as dividends).
• Pledge over bank accounts (nantissement de compte bancaire): This type of security covers the onshore bank accounts to which the pledgor has day-to-day access. The pledgor is generally allowed to use funds in the account until an event of default occurs. Upon enforcement, the creditors will be entitled to receive the credit balance of the bank account.
• Mortgages (hypothèque): Mortgages can be taken over any buildings and fixed structures (including future buildings) located in Burkina Faso. Although the Uniform Act regulates this security, mortgages remain very dependant upon local law and practice. Mortgages must be notarised and recorded with the mortgage registry in order to be perfected.
• Security over receivables (cession/nantissement de créances): The Uniform Act provides that a claim against a third party can be assigned or pledged. This allows the lender to take security over receivables governed by local law (for example intercompany receivables or project receivables).

Enforcement procedures have been streamlined and improved following recent amendments to the Uniform Act. As a result, upon an enforcement event the secured lenders are generally vested with the three following enforcement options:

• sale of pledged assets at public auction (which can generally take place eight days after formal notification to debtor);
• petition to court for appropriation of an asset (which will take place once a court-appointed expert has valued it); and
• self-appropriation of the pledged asset without a court order (if agreed between the parties in the relevant pledge agreement). In other words, should the relevant pledgor fail to pay an amount on its due date, the creditor may automatically (without court order) become the owner of the pledged assets after a certain period. The pledged assets must then be valued by an expert and if that value exceeds the amount of the relevant secured liabilities, the pledgee must repay the excess amount to the pledgor. Certain restrictions apply if the debtor granting the security is a non-professional. Self-appropriation of mortgaged properties is also recognised by the Uniform Act provided that the mortgagor is a legal entity and that the building is not used for habitation purposes.

Registration can be carried out at the request of the creditor, the securities trustee or the grantor of the security interest. The perfection process varies in respect of each category of security, but generally the process can be summarised as follows:

• approval of the security by the appropriate corporate entity granting the security;
• registration of security with the local tax authorities and local “Registre de Commerce et du Crédit Mobilier” “RCCM” (note that neither cash collateral agreements nor independent guarantees need to be registered with the RCCM); and
• for most security, notification to the relevant pledged debtors (by bailiff or simple notification) and any applicable account banks.