In the mining sector, at least 10% of the shares of a mining company must belong to the government and, in addition, the mining company must ensure the participation of Burundi nationals in the equity capital of the company. As reported by the IFC (2022), the government's practice is to determine in mining conventions that 39% of the capital of the licensed mining company be held by Burundi shareholders, 10% by the government of Burundi and the remaining 51% by the foreign investors (see for instance the Mining Agreement on Rare Earth Deposits Gakara).
"Section 1: Scope of application
Article 1: The provisions of this Code apply to all operations of prospecting, research, industrial and artisanal exploitation, processing, detention, transport and trade as well as the closure of mines, mineral substances or fossils, thermal waters and quarry products on the territory and in the territorial waters of the Republic of Burundi, with the exception of liquid or gaseous hydrocarbons which are governed by special laws
Section 2: Definitions
Article 2: For the purposes of this Code, we understand by: [...]
29° Mining company: Company under Burundian law which engages in industrial mining
[...]
Article 13: To hold a prospecting authorization, any natural or legal person must have their physical address in Burundi before the title is issued and any change in their address must be communicated to the Minister within a period not exceeding one month. . Other conditions for obtaining and exercising this authorization are defined by regulation.
[...]
Article 27: Only legal entities can hold a mining title. To hold a mining title, any legal entity must have its head office in Burundi before the title is issued and any change in its address must be communicated to the Minister within a period not exceeding one month.
[...]
Article 61: The mining exploitation title consists of the exploitation permit to which a mining agreement must be annexed. The mining agreement accompanying an operating permit must at least contain provisions relating to the mining company's commitments in terms of the creation of infrastructure, socio-economic contributions and in terms of recruitment, with equal qualifications, of personnel of nationality Burundian or subcontractors of Burundian nationality. The model of this mining agreement concluded with the State is defined by ordinance.
[...]
Section 3: The operating permit [...]
Article 63: The granting of an industrial exploitation permit gives rise to the allocation to the State of at least ten percent (10%) of the shares or shares of the operating company.
The State's participation cannot be diluted in the event of an increase in share capital.
Without prejudice to the provisions of the first paragraph, the State does not carry out mining activity. It plays the role of regulator.
[...]
Article 65: The mining agreement accompanying an exploitation permit must at least contain provisions relating to: [...]
c) the creation of the mixed mining company (SM);
d) State participation of at least ten percent (10%) of the share capital of the mining company; [...]
h) the commitments of the mining company in terms of creating infrastructure, socio-economic contributions and in terms of recruiting, with equal qualifications, staff of Burundian nationality or subcontractors of Burundian nationality; [...]
l) clauses allowing Burundian investors to acquire shares against payment.
[...]
Paragraph 2: The issuance of the purchasing and export counter approval for artisanal mining mineral substances
Article 97: Approval for a counter for the purchase and export of artisanal mineral substances is given by the Minister for a period of two years under the conditions specified by regulation.
The refusal of approval must be in writing, reasoned and made within one month following the submission of the application.
Any natural person, any legal entity having its head office and administrative office in Burundi and whose corporate purpose is the purchase, sale and export of artisanal mining mineral substances is eligible for the title of purchasing and marketing counter. export of artisanal mineral substances if it meets the requirements of this Code.
[...]
CHAPTER II: QUARRYING [...]
Article 120: The artisanal quarry exploitation permit is issued by the Minister to any natural person of Burundian nationality or to any legal entity under Burundian law who requests it.
Article 176: The provisions of Decree-Law No. 1/138 of July 17, 1976 relating to the Mining and Petroleum Code of the Republic of Burundi relating to hydrocarbons remain in force until the intervention of new legislative provisions in this area. [...]" (LAW N°1/21 OF OCTOBER 15, 2013 PROVIDING BURUNDI MINING CODE)
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"Article 89:
The holder of mining or quarry rights as well as the companies working on his behalf must give preference to Burundian companies of their choice for any contract, provided that they offer comparable prices, quantities, qualities and delivery times. .
In all cases, the share of small and medium-sized enterprises (SMEs) and other businesses owned or controlled by Burundians must be progressive in compliance with the minimums below unless contrary agreements duly ratified by Burundi:
Phase | Year | Percentage
Mine development | - | 10%
Mining | 1st to 5th grade | 15%
Mining | 6th to 10th grade | 20%
Mining | 11th to 15th grade | 25%
Mining | Beyond the 15th year | 30%
Section 90:
In order to promote the development of the private sector, holders of mining or quarry rights as well as companies working on their behalf must implement the support plan for the creation and/or capacity building of SMEs and other companies owned or controlled by Burundians for the supply of goods and services widely used in their activities.
Section 91:
Each holder of mining or quarry rights must submit annually to the Minister in charge of mines a report on their use of SMEs and other companies owned or controlled by Burundians. The report provides details on the progress of the holder of the mining or quarry right to achieve the minimum share defined in this article, as well as its activities in favor of the creation or strengthening of Burundian capacities. The report, a copy of which is submitted to the Ministry in charge of SMEs, will be published in the Official Bulletin of Burundi and on the Ministry's website.
Section 92:
The holder of the mining or quarry right as well as the companies working on his behalf must comply with the requirements of labor legislation.
Subject to the provisions of paragraph 1, the holder of the mining or quarrying right must employ as a priority Burundian executives with the required skills. To this end, the holder of a permit for the industrial exploitation of mining substances must, during the development phase, present to the ministry in charge of professional training and to the mining administration a training plan for Burundian executives to enable them to acquire the skills required by the management of the company in order to occupy management positions within the first five years from the date of the first commercial production.
Section 93:
The selection procedures are announced through the press. The holder of a mining or quarry right as well as the companies working on his behalf are required to employ, as a priority, residents of the local community or neighboring communities and in all cases, exclusively Burundians for all jobs. not requiring qualification.
The minimum quota of Burundian employees per phase of development of the project and/or per period of operation of the company is defined below.
Percentage during the development phase
Category of workers | Percentage
Executives | 33%
Framing | 50%
Qualified workers | 66%
Unskilled workers | 100%
Percentage during the operational phase
Category of workers | 1st-5th year
Executives | 20%
Framing | 30%
Qualified workers | 40%
Unskilled workers | 100%
[...]
Paragraph 2. The issuance of the operating permit [...]
Article 101:
The State participates, without payment of fees and as owner of subsoil resources, up to at least ten percent of the shares or shares of the mixed mining company.
[...]
Section 103:
In addition to what is provided for by the relevant provisions of the Mining Code, the Mining Agreement sets out the rights and obligations of the parties as well as the operating methods of the mixed mining company.
The Mining Agreement comes into force and ends concurrently with the exploitation permit. [...]" (DECREE N°100/193 OF JUNE 16, 2015 PROVIDING MINING REGULATIONS OF BURUNDI)
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"Article 13: State participation in the capital of SMEM
$1. The State participates without payment as owner of the subsoil and for the entire duration of the Agreement, in the capital of SMEM up to ten percent (10%). The State's participation in the capital of SMEM cannot be diluted by a capital increase or any other operation.
$2. The State has at least ten percent (10%) of the seats/votes in the General Assembly and on the Board of Directors of SMEM.
$3. In addition to the seats/votes that the State has in the Board of Directors and in the General Assembly, the State is represented by a person assuming the position of Vice-President in each of the two bodies. The management team must include up to 40% of nationals.
$4. In addition to the ten percent (10%) of State shares, the State and/or Burundian economic operators can acquire for consideration shares in the capital of SMEM up to 39% at the market price. [...]" (MINING AGREEMENT ON THE RARE EARTH DEPOSITS OF GAKARA)
LAW N°1/21 OF OCTOBER 15, 2013 PROVIDING BURUNDI MINING CODE
DECREE N°100/193 OF JUNE 16, 2015 PROVIDING MINING REGULATIONS OF BURUNDI
MINING AGREEMENT ON GAKARA RARE EARTH DEPOSITS
[<a href="https://faolex.fao.org/docs/pdf/bur143121.pdf">Law</a>],[<a href="https://www.obm.bi/wp-content/uploads/2020/05/REGLEMENT-MINIER-EN-KIRUNDI-VALIDE_OCTOBRE-2015.docx.doc">Reg</a>],[<a href="https://www.rainbowrareearths.com/wp-content/uploads/2015/03/FinalSignedRB_GvtBdi_ML_Convention_27_3_2015.pdf">Convention</a>],[<a href="https://www.ifc.org/content/dam/ifc/doc/mgrt/cpsd-burundi-en.pdf">Other</a>]