NAIROBI/JOHANNESBURG/LONDON — As jihadists wreaked ever extra havoc within the final two years, mining corporations in Burkina Faso rolled out further security measures, from barracks for presidency troops defending them to protected rooms for employees behind barbed wire and lumps.

Expatriates typically fly out and in, whereas native workers nonetheless drive however in guarded convoys.

That has added thousands and thousands of {dollars} to security prices for overseas 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 12 months.

But this week’s attack on a convoy ferrying a whole bunch of native staff and contractors from a mine owned by Canadas Semafo has uncovered simply how susceptible corporations nonetheless are.

No less than 37 civilians died, with one other 60 injured and dozens extra feared lacking.

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Canadian company suspends operations at Burkina Faso mine after 37 killed in attack

Deserted buses and pickups lay riddled with bullets. Bloodied our bodies had been slumped within the automobiles and on a pink dust highway. Navy reinforcements arrived however solely after the lead escort automobile was blown up, officers mentioned.

“This is the deadliest incident targeting the mining industry, or any private businesses, in the Sahel since the 2013 In Amenas hostage crisis,” mentioned Vincent Rouget, an analyst at Management Dangers Group, referring to an attack on a fuel plant within the Algerian desert that killed dozens of overseas hostages.

There was no declare for Wednesday’s ambush, however the modus operandi a bomb attack on navy escorts adopted by gunmen unleashing bullets urged 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 practically 500,000 extra have fled their properties, primarily this 12 months. On this time, there have been dozens of assaults on industrial and small-scale mining operations.

ANALYSIS: Deadly attack near Burkina Faso mine highlights ‘escalating’ security situation

Kidnapped Canadian discovered lifeless in Burkina Faso: security officers

Kidnapped Canadian discovered lifeless in Burkina Faso: security officers

It’s an acute dilemma for miners.

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

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“Because of the escalating security situation in Burkina, there are companies looking at decreasing their exposure to the country or leaving,” mentioned Invoice Witham, the pinnacle of AAMEG, a physique representing Australian useful resource corporations in Africa.

“But the miners still see West Africa as a whole as quite a good investment.”

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

Final 12 months, AQIM, the principle al Qaeda affiliate in West Africa, instructed followers Western corporations, particularly from France, had been “legitimate targets”.

READ MORE:37 lifeless in attack on mining staff in Burkina Faso: experiences

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

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

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

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But authorities incentives and the potential to provide gold comparatively cheaply led to over $7 billion invested in mining initiatives within the area between 2004 and 2018, in accordance 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 12 months, al Qaeda-linked teams took over northern Mali however gold operations had been unscathed as most mines are within the south, a whole bunch of kilometres away from militant strongholds.

Since then, France has deployed over 4,000 troops to the area, there’s a 16,000-strong United Nations peacekeeping mission in Mali, and West African leaders have launched regional security initiatives. Nevertheless, native armies are dropping floor.

ANALYSIS: Deadly attack near Burkina Faso mine highlights ‘escalating’ security situation

Chrystia Freeland confirms Kirk Woodman, Canadian kidnapped in Burkina Faso, discovered lifeless

Chrystia Freeland confirms Kirk Woodman, Canadian kidnapped in Burkina Faso, discovered lifeless

Since 2017, researchers documented a minimum of 28 violent incidents at mines or involving mining employees in Burkina Faso, 17 of them this 12 months, in accordance with a Reuters evaluation of knowledge compiled by the Armed Battle Location & Occasion Information Undertaking.

No less than 12 of these occasions this 12 months, which embrace assaults on employees, abductions and the usage of improvised explosive units, had been linked to jihadists. Previous to Wednesday, a minimum of 54 individuals had been killed in mining-related violence this 12 months, 5 occasions as many as all of 2018.

This has compelled the business to just accept that the menace has unfold properly past Nigers northern deserts, the place the likes of Frances’s Areva have uranium mining operations and expatriates have been kidnapped, mentioned Rouget.

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

Earlier this 12 months, Burkina Faso’s authorities requested mining corporations to assist fund a fast response unit with helicopters to reply to incidents like Wednesday’s, however the initiative didn’t materialize, in accordance with two individuals concerned in conferences.

READ MORE:6 lifeless after gunmen attack church in Burkina Faso: official

One firm security official mentioned his agency spent thousands and thousands of {dollars} on armoured automobiles, bullet-proof partitions and security rooms. “We are bracing for an In Amenas-style attack,” he mentioned.

Nevertheless, some analysts consider mines nonetheless have adequate defences.

“The only thing that would shift the perception among gold miners that exposure to this insecurity is a risk worth taking is a direct attack on a mine site an unlikely prospect,” mentioned Eric Humphery-Smith in danger consultancy Verisk Maplecroft.

The highest investor in Semafo mentioned threat and gold mining went hand-in-hand, and additional security prices wouldn’t be a game-changer.

“Obviously it will add maybe a few dollars to the cost of producing an ounce of gold, but it is not going to change the overall economics,” mentioned Joe Foster, gold fund portfolio supervisor at VanEck Funding Administration, which has a 10.1% stake in Semafo.

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ANALYSIS: Deadly attack near Burkina Faso mine highlights ‘escalating’ security situation

Canadian with B.C. connection discovered lifeless in Burkina Faso

Canadian with B.C. connection discovered lifeless in Burkina Faso

One speedy impression might be restrictions on how far afield corporations are ready to ship geologists.

In Could, Oumarou Idani, Burkina Fasos minister of mines, recognized exploration corporations as excessive threat. “They work over large areas, sometimes 250 square kilometres … it is difficult to have a secure way of working over that size of area.”

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

That was a “a big wakeup call”, a former senior mining govt who’s now an investor instructed Reuters.

“Miners are going to risk exploring further afield a lot less now,” he mentioned, asking to not be named. “This will affect how many new gold deposits are found.”


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