Mining companies involved in extraction and export of rare earth minerals in Burundi have been suspended from their operations pending a pack of accusations and violations.
Prime Minister Alain-Guillaume Bunyoni has not had kind words for these mining companies and this takes the whole matter to another level.
“Many of these companies have received formal notices to immediately stop operations because we realized that they were only there to plunder our mineral wealth,” the Premeir said.
“They have duped the Government from the conventions that govern their operation to the execution of their activities. Some sort of scoundrels, ” Prime Minister Bunyoni said earlier in April.
Rainbow mining Burundi mining company has been specifically notified to suspend all its operations and has been issued a formal notice.
In a letter dated March 31, 2021, the Prime Minister’s office specifies to the Ministry of Hydraulics, Energy and Mines that following the progress report of the commission for evaluating the mining agreement on the rare earth deposits of Gakara, the export of rare earths is now prohibited pending the violation of the Convention signed between the Burundian Government and the company Rainbow mining Burundi.
However, later on May 18, 2021,Rainbow mining wrote to the government requesting for negotiations to adopt the win-win principle.
On June 24, 2021, the Ministry of Energy and Mines announced the suspension of mining activities for rare earths of Gakara “until the adoption of the clauses resulting from the negotiations between the company Rainbow mining Burundi and the Burundian Government.”
According to local media reports, the mining companies have been issuing juicy bribes to higher officials in the government and evading taxes or in most cases declaring very low taxes.
According to a source, the Rainbow Mining Company paid a minimum tax in relation to the value of the various elements contained in the rare earths; “the company only paid its taxes for the basic elements and not on the associated elements among rare earths.”
“As Rainbow mining is reluctant to show its results in terms of content for the rare earths it exports, the state only collects 10% of the profit of what it should have,” says a source within the ministry in charge of mines.
Rainbow mining company is also accused of not honouring its contractual obligations contained in agreements.
For example, “It was planned to build socio-economic infrastructure such as schools and health facilities. For example, the company was to build a technical school in Mutambu (Bujumbura rural province) and a paved road leading there, It did not do any of these.”
According to the Ministry of Mines, the state is within its rights to suspend the continuation of mining operations carried out by the company.
Gabriel Rufyiri the President of Olucome – an Observatory for the fight against corruption and economic embezzlement argues that the problem is with the mining law.
“It is said in the Mining Code that the company signing the agreement has 51% of the shares, 39% held by other shareholders and 10 % of shares belonging to the Burundian State. Under these conditions, the win-win principle is not possible. ”
Gabriel Rufyiri also points to the responsibility of the public authorities: “How is it that things could have come to this when the State has a vice-president on the Board of Directors within the mixed company of ‘mining not to mention other members of the same Council? ”
“When we take a look at the international markets, we realize that Burundi exports large quantities of raw materials, but we will never know the income from their sale. It is looting of mineral resources. But by whom? That’s the big question,” Rufyiri notes.
Rufyiri calls for this case to be brought to justice; “We need to prosecute those who represented the Burundian government in the negotiation and monitoring of mining by companies. This is the crux of the matter. ”
“The code, which there is reason to believe will be amended, must not be implemented behind closed doors, but be the result of a consensus between all the partners (government, civil society, etc.)”, he concludes.