West Africa stands at a crossroads, with its gold mining sector caught between soaring global prices and a host of daunting challenges. As gold prices have surged past $2,700 an ounce this month—an increase of over 20% since the start of 2023—the region’s rich reserves are tantalizingly close to being fully tapped. The Birimian belt, which stretches across Ghana, Ivory Coast, Burkina Faso, and the Mali-Senegal border, is a gold-rich corridor that has long attracted investment. Yet, the promise of prosperity remains elusive due to ongoing political instability and rampant illegal mining, particularly in Burkina Faso and Mali.
The prospects for a robust and transparent mining sector in West Africa could indeed be transformative. A well-regulated industry could not only enhance government revenues but also improve local economies and pave the way for exploration of other valuable metals. However, the shadow of instability looms large, deterring international investment and stifling the growth of a sector that could be a lifeline for many.
GlobalData estimates that gold production in West Africa reached a commendable 11.83 million ounces in 2024, with Ghana, Burkina Faso, and Mali leading the charge. Recent government initiatives signal a renewed commitment to regain control over supply chains. Ghana’s announcement of its first greenfield gold mine since 2013, Cardinal Namdini, set to produce over 350,000 ounces annually, marks a significant step forward. Similarly, Burkina Faso’s recent legal maneuvers to reclaim the Wahgnion and Boungou mines from Endeavour Mining reflect a broader trend of governments asserting authority over their mineral wealth.
Yet, while these developments are promising, the reality is that production is projected to decline by more than 1% between 2025 and 2030. The geopolitical landscape plays a critical role in shaping investor sentiment. Countries like Ghana and Ivory Coast, which boast more stable governance, are poised to attract more capital, while their less stable neighbors face an uphill battle. Theo Yameogo from EY highlights that regions under military or populist control often see illegal mining flourish, creating an environment that is uninviting to legitimate investors.
Illegal mining is not merely a nuisance; it has far-reaching implications. Jorden de Haan from Pact points out that over 90% of gold in these nations is smuggled, depriving governments of tax revenues and undermining local economies. The specter of money laundering and terrorism financing looms large, particularly in areas plagued by instability. The challenge is cyclical: without a stable environment, investment will not flow, and without investment, stability remains a distant dream.
One potential solution lies in the formalization of the artisanal and small-scale mining (ASM) sector, which accounts for nearly half of the region’s gold production. However, this is easier said than done. Countries have struggled to implement effective formalization strategies, often overlooking the complex social and economic factors at play. High unemployment and food insecurity complicate the landscape, making it difficult to enforce regulations when livelihoods are at stake.
The path to formalization requires a nuanced approach that goes beyond merely establishing regulations. Governments need to empower small-scale miners through training, access to tools, and land rights. The concept of professionalizing these miners could lead to a more sustainable industry, but it’s not a one-size-fits-all solution. As Yameogo notes, achieving this balance is fraught with challenges, and without addressing the root causes of illegal mining, the cycle of informality may persist.
In sum, West Africa’s gold mining sector is at a pivotal moment. With the right mix of governance, investment, and community engagement, the region could turn its mineral wealth into a powerful engine for socioeconomic development. But without addressing the underlying issues of instability and illegal mining, that potential may remain just that—potential. The stakes are high, and the future of West Africa’s gold industry hangs in the balance, awaiting decisive action and strategic thinking from all stakeholders involved.
