Burundi opens mining sector to investment, seeks Australian expertise

Burundi is opening up to foreign investment in mining from exploration through to end-use manufacturing, Hassan Kibeya, Burundi's minister of energy, industry, trade and tourism, said Sept. 4.

Kibeya laid out Burundi's strategic "road map" for the mining sector at the Africa Down Under conference in Perth, Australia.

"Burundi is not well known globally ... The Burundi mining sector is at its early stage, and it is now emerging, and we believe that this is the moment to open it fully to the world. We are actively opening doors to different partners, especially Western investment," Kibeya said.

Burundi officials are already negotiating with an Australian Securities Exchange-listed company regarding a lithium mining permit, which they hope "will be highly significant."

Burundi's geology includes lithium, gold, tin, rare earths, kaolin, copper, cobalt, titanium, amethyst, gemstones and granite, plus about 6% of the world's nickel reserves, the minister said. It also has East Africa's second-largest reserves of columbite-tantalite — otherwise known as coltan — behind the Democratic Republic of the Congo, according to Kibeya.

"The challenge that we face is we have this mining exploited artisanally" on a small scale with limited industrial oversight, so production is low, and the government wants to transition to an industrial way of mining, Kibeya said.

Most minerals are exported as raw concentrate, which exposes it to commodity price volatility — a challenge faced by other African economies — while energy deficits and logistics bottlenecks restrict large-scale project bankability, Kibeya said.

Thus, the government wants to connect isolated mines to a more integrated supply chain model, then develop a processing hub with better connectivity, also to regional trade corridors and export hubs, the minister said.

Mining reforms

To this end, Burundi is implementing reforms to boost mineral value addition and regional integration, in order to "connect Burundi directly to global green energy transition industry and that can reshape demand for the minerals that we hold," Kibeya said.

An investment code was formalized in 2021 with the creation of the Burundi Development Agency, while modernized frameworks were launched for rail transport in 2022 and for resource extraction in 2023, according to the presentation.

New regulations were also launched in 2023, allowing freely negotiated rates between operators and clients, while an Independent Competition Commission has also been established to ensure market fairness, the presentation said.

While Burundi's standard corporate tax rate is 30%, miners pay just 5% in the first year of production, which rises to 25% by the fifth year, according to Kibeya's presentation.

There are also value-added tax and customs exemptions for the import of construction materials, equipment and production inputs, with "free repatriation of profits after payment of applicable taxes and duties," the minister's presentation said.

Burundi needs equipment and technology to extract, concentrate and refine minerals, then manufacture products from these materials for end customers, Kibeya said.

Derisking bankable projects firstly requires digitization to "guarantee a transparent and digital mineral cadastre, license reform and also technical readiness." "Our target is explicit, 100% of transparency and a Tier 1 of investor confidence," the minister said.

To this end, Kibeya signed an agreement in March with US group KoBold Metals Co., an artificial intelligence startup backed by Microsoft founder Bill Gates, to digitize geological data.

Surveys also must be done due to the lack of data to explain the country's mining and geological characteristics, Kibeya said.

The minister also signed a deal in March to give Isle of Man-headquartered Lifezone Metals Ltd. exclusivity over the Musongati nickel project in Burundi in the East African nickel belt, which also hosts Lifezone's Kabanga nickel project in Tanzania.