A change in leadership in Burkina Faso caused Pan African Minerals, a unit of Timis Mining, to stop production at the Tambao manganese mine in 2015.
But now the West African nation is once again searching for a partner to develop the $1-billion deposit.
In a recent interview, Mining Minister Oumarou Idani stated, “Pan African Minerals did not respect their obligations,” adding, “[i]t makes sense that we find a strategic partner who is reliable and start a new project.”
He explained there was a “breakdown in confidence” between the government and Pan African Minerals. The company is seeking as much as $4 billion in damages, and has petitioned the International Court of Arbitration in Paris to prevent the withdrawal of its permit, but the case is still ongoing.
This conflict is not the first time Tambao has caused issues. The mine was the focus of an earlier rights dispute between Burkina Faso and Dubai-based Wadi al Rawda Investments, which signed an exploitation agreement in 2007.
After completing a feasibility study, the company accused the government of refusing to recognize its rights to the project, and in 2011 took the matter to the court. The dispute was settled in 2013.
Tambao’s reserves are estimated at 100 million MT, making it the largest manganese resource in the world. Burkina Faso hopes that it will generate revenue that could be invested elsewhere in the region.
Such investments could include: constructing a quay to ship manganese at Ivory Coast’s Abidjan port; building a railway from the Mont Klahohyo iron ore deposit in Ivory Coast to the port of San Pedro; and developing a uranium mine in Niger.
In the last year, output of gold in the country has jumped to 47.5 MT, and there is a chance that it may reach 55 MT in 2018, thanks to a new mine developed by Canadian company Semafo (TSX:SMF). The mine is expected to start production this year.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.