OUAGADOUGOU, Apr. 28 (AGCNewsNet) - Burkina Faso's military-led government has granted an industrial mining licence to Russian miner Nordgold for a new gold project, as the West African nation looks to capitalise on record-high gold prices to shore up an economy battered by insecurity.

The licence covers the Niou gold deposit in Kourweogo province, Plateau-Central region, and is expected to yield around 20.22 metric tons of gold over an eight-year lifespan, the council of ministers said late on Thursday.

The move signals deepening economic ties between Burkina Faso and Russia, as the junta that seized power in 2022 continues to pivot away from traditional Western allies towards Moscow.

The Niou deposit covers 52.8 square kilometres within the exploration licence area previously held by Jilbey Burkina, now owned by Nordgold. Nordgold already operates the Bissa and Bouly mines in the country.

Under Burkina Faso's new mining regulations, Jilbey Burkina will retain an 85% stake in the project, while the Burkinabe government will hold the remaining 15% without financial contribution.

The project is expected to contribute 51.5 billion CFA francs ($84 million) to the state's budget over its lifespan and 7.06 billion CFA francs ($11.5 million) to the state's mineral wealth fund, officials said.

"The cooperation with Nordgold and other industrial mines is important as the country faces a budget crunch," said Ulf Laessing, head of the Sahel programme at Germany's Konrad Adenauer Foundation.

However, he warned that the project would be located in a large artisanal mining area and could deprive many informal miners of a crucial source of income.

The government said the Niou mine could generate 204 direct jobs and help sustain employment at the nearby Bissa Gold SA mine.

Burkina Faso, a major gold producer, has been fighting Islamist militants since 2015. It produced over 57 tons of gold in 2023, according to NGO Swissaid, which monitors the mining sector.

Mining companies operating in Burkina Faso include Canada's IAMGOLD and Endeavour Mining, as well as Australia's West African Resources Ltd.

Gold prices have surged by more than 25% this year, fueled by geopolitical instability and U.S. President Donald Trump's trade policies.

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