Burundi, a landlocked country in East Africa, is endowed with substantial gold reserves, particularly in its northern and western regions. Despite its potential, the gold sector faces challenges related to regulation, governance, and market dynamics. This guide provides an in-depth overview for investors and traders interested in purchasing gold from Burundi, emphasizing legal compliance, ethical sourcing, and practical considerations.

Overview of Gold Mining in Burundi

• Gold Reserves and Production: Burundi’s gold reserves are modest, with the Central Bank holding approximately 0.03 tonnes as of mid-2024. Annual gold production fluctuates, with estimates ranging between 396 kg and 953 kg from 2015 to 2019. The sector is predominantly artisanal, with over 6,500 miners engaged in gold extraction activities. Key mining areas include the provinces of Cibitoke, Bubanza, and Kayanza, where miners utilize rivers such as Nyamagana, Muhira, Kaburantwa, and Kagunuzi for alluvial gold extraction.
• Artisanal Mining Practices: Artisanal miners in Burundi employ rudimentary methods to extract gold, often resulting in environmental degradation and health hazards. The use of explosives in mining operations has led to fatal lung poisoning among local populations due to toxic fumes. Additionally, the lack of proper waste management contributes to water pollution and soil erosion.

Legal and Regulatory Framework

• Licensing and Export Regulations: The Burundian government has implemented measures to regulate the gold sector. In 2019, the government banned mining cooperatives and companies from selling gold to private buyers, designating the Central Bank as the sole purchaser. To export gold legally, entities must obtain a mining counter-permit and an International Conference on the Great Lakes Region (ICGLR) certificate, ensuring the gold is conflict-free. A 5% tax is levied on the purchase price of gold, and all transactions must be documented for customs clearance.
• Government Initiatives and Challenges: The government has established public-private partnerships, such as African Mining Burundi (AMB) and Tanganyika Mining Burundi (TMB), to promote industrial mining. However, these initiatives have faced challenges, including land disputes, environmental concerns, and allegations of irregularities in compensation and mining practices. In 2021, the government suspended TMB’s activities due to violations of the mining code and unresolved compensation issues.

Gold Market Dynamics

• Export Statistics and Market Trends: Gold is Burundi’s most valuable export product, accounting for 37% of total exports in 2019. The country exported $66.8 million worth of gold in that year, a decrease from $113 million in 2018. Despite its potential, the gold sector has not developed to a commercial level, with annual production averaging 0.5 tonnes. The lack of transparency, high levels of corruption, and inconsistent taxation have discouraged international companies from investing in the sector.
• Illicit Trade and Smuggling: The porous borders with neighboring countries have facilitated the smuggling of gold into Burundi, often from conflict zones like the Democratic Republic of the Congo (DRC). Licensed comptoirs have been known to refine and export this illicit gold, sometimes to destinations such as the United Arab Emirates. This illegal trade undermines efforts to regulate the sector and poses challenges for legitimate buyers seeking to ensure the ethical sourcing of gold.

Purchasing Gold from Burundi

• Identifying Reputable Suppliers: Given the challenges in the gold sector, it is crucial to engage with reputable suppliers. Entities such as Sawaminerals Africa offer professional support, including fraud checks, due diligence, escrow services, and logistics for purchasing gold from Burundi. Engaging with established and transparent suppliers helps mitigate risks associated with illicit trade and ensures compliance with legal requirements.
• Due Diligence and Compliance: Before proceeding with any transaction, buyers should conduct thorough due diligence. This includes verifying the authenticity of mining licenses, export permits, and assay reports. Ensuring that the gold is conflict-free and ethically sourced is paramount. Buyers should also be aware of the 5% tax on gold purchases and ensure that all transactions are properly documented for customs clearance.

Ethical Considerations

• Conflict-Free Sourcing: Ensuring that the gold is sourced from conflict-free zones is essential. The ICGLR certificate serves as a guarantee that the gold has not been used to finance armed conflicts. Engaging in transactions involving conflict-free gold supports peace efforts and aligns with international ethical standards.
• Environmental and Social Responsibility: Supporting sustainable and responsible mining practices is crucial. Buyers should engage with suppliers who adhere to environmental protection standards and promote the welfare of local communities. This includes ensuring safe working conditions for miners and minimizing environmental degradation associated with mining activities.

Conclusion

Purchasing gold from Burundi presents opportunities but requires careful navigation of legal, ethical, and logistical challenges. By partnering with reputable suppliers, conducting thorough due diligence, and adhering to both Burundian and international regulations, buyers can engage in responsible and profitable gold transactions. Staying informed about the evolving landscape of Burundi’s gold trade is essential for sustained success and ethical engagement in the market.