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Burundi: Govt Sets Sights On Oil
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East African Business Week (Kampala)
4 August 2008
Posted to the web 5 August 2008
Bujumbura
Burundi could become a leading oil and minerals exporter of the region following a protracted exploration and prospecting exercise kicked off by government recently.
According to Burundi's Director for Geology and Mines Mr. Damien Riragonya Burundi potentially large oil deposits are said to be existing on the Burundi side of Lake Tanganyika area.
Oil sips have been sighted and satellite images have added weight to earlier studies. Oil has been sighted on the Rusiszi basin along the border with the DRC. Interest has grown in exploring Burundi's oil and already companies have flown in and laid papers to government for exploration and prospecting licences. "We have four applications for oil exploration. We have divided the oil zones into four blocks. Three blocks are in the lake area, i.e. BCD and Kisizi Basin Delta as a Block A. Block D has been awarded to Surestream Petroleum.
Surestream Petroleum is a private exploration and production company headquartered in London. At the moment for many various reasons, mining in predominantly in the hands of artisanal mining groups, earning only a paltry over a million dollars...
Prominent of which is the instability that hit the country and lack of a comprehensive strategic framework for the oil and mining industry.
But thanks to a renewed interest by government, and a need to diversify the economy away from agriculture, the department of mines and geology is working overdrive to revive and grow this industry to a billion dollar industry employing over a million people.
The East African Business Week visited the department in Bujumbura and had an indepth discussion with the with Director General of Mines and Geology
Engineer Damien Rirangoya who explained that the country was endowed with unknown quantities of nickel, cobalt, tangsten, tantalum, gold, tantalum, casterine (tin), cobalt, and peat.
Prospects exist for uranium, and oil prospecting is underway.
Lots of nickel deposits exist in Burundi in the Musongati region in Central and south eastern parts of the country.
We signed a contract in 1999 with an Australian company Andeover Resources NL. They stopped work because of insurgency. They were charged with carrying out a feasibility study for three years and did not deliver. In June 2007, government terminated their contract. However, Andeover has now sued the government at the International Chamber of Commerce in Paris.
Apart from that we have many companies that have shown interest and some have arrived and are carrying out feasibility studies, prospecting and others actual activity.
In 2006, the government granted a permit to do research on nickel. There are potentially huge deposits of nickel in the north eats of the country, known as the nickel belt. An international company Danyland Ltd working with a BHP Bilton, have taken up the venture to exploit nickel here.
In the southern Makamba region, BHP has also been granted a mining permit to mine Nickle. In 2004, another company a British company, Mineral Search of Africa was given a permit for nickel in Rutovu near Musongati.
Vanadaium deposits exist in Mukanda). A permit has been granted to International Gold Exploration AB from Sweden.
International Gold Exploration AB has been granted a permit to prospect for gold in the north west of the country in Butara area in 2006. Another company operating in the same area was given a licence for gold. Caracal Gold, an American firm, has started operations.
International Gold has similarly been given a permit for uranium exploration in the Musongati area.
We also have deposits of peat in the Kagera area north east of the country. This is being handled by the National Office for Peat. Peat has been exploited since 1978 and consumed 100% by the army and police as fuel energy. About 10,000 tonnes is mined annually.
Another mineral with in Burundi is bastnaesite, used in the manufacture of electronic parts. This was mined between 1948 and 1978. It is no longer commercially viable. Government is looking at more areas for exploitation as studies show that it exists in other places in the country.
Tin, tantalum and tungsten deposits exist in the northern part of the country and government is looking for investors in this area.
According to Rirangonya, cement rocks are spread out through out the country. Phosphate is also available but has been discovered very deep in the ground and the department is still looking at the commercial viability of the mineral.
We are now reviewing the mining code expected in October. The project is being financed by the World Bank and PAGE (Economic Management Support Programme - (EMSP).
In the mining code, we are looking at lowering the fiscal terms required by investors. Under the existing code, they were too high for investors. We want it lowered from 7% and make it conducive for investors.
Today acquiring a mining licence is much easier.
Once a company makes an application to the department, it is studied by the relevant authorities and experts and sent to cabinet and parliament for debate and onward transmission.
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Since 2006, we have signed concessions with many companies have made invitations for many others. In the last four years we have received lots of applications.
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| Copyright © 2008 East African Business Week. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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