The government of Burundi has suspended the operations of seven foreign companies involved in mining gold and coltan. The main target is UK-listed Rainbow Rare Earths, which operates the only producing rare-earth mine in Africa. The government says it wants a more equitable share of revenue from the Gakara project.
Gakara is home to one of the world’s largest rare earth reserves, which are essential components in many hi-tech goods.
Mines Minister Ibrahim Uwizeye said in a letter to the firms obtained by AFP that the decision was made earlier this month due to multiple failures in the country’s mining legislation. “The state, which owns the soil and minerals, is not making a profit as it should,” according to the letter—describing the mining contracts as “unbalanced.”
“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,” he told AFP Thursday.
The seven foreign companies involved are of British, Chinese, and Russian origin, but the primary focus of Burundi’s wrath is directed at Rainbow Rare Earths, a UK-listed company.
Burundi had great expectations for its industrial mining activities, especially rare earth, but income has been lower than anticipated so far. As a result, Burundi, according to Mines Minister, is seeking a more fair share of income from the Gakara project and has ordered Rainbow and several others to stop rare earth concentrate shipments until the issue is addressed.
“Burundi expects to earn about $1.5 million from mining in the 2021 fiscal year, but this is very little compared to what it exports,” said Gabriel Rufyiri, head of Olucome, the country’s primary anti-corruption body.
Burundi’s President Evariste Ndayishimiye who took over from late former President Pierre Nkurunziza in June 2020 has made fighting corruption a top priority.
Rare-earth minerals are crucial to the manufacture of magnets used in future industries like wind turbines, robots and electric cars. But the country, unfortunately, has for years been ranked by International organizations among the “top 10 most corrupt countries”.