Mining sector: The Ouagadougou Commercial Court annuls a "onerous" contract and orders two multinationals to pay 5.2 billion CFA francs

The West African mining sector has just set a major legal precedent. In a judgment rendered on June 10, 2026, the Ouagadougou Commercial Court ruled in favor of the Burkinabe company Riverstone Karma SA, declaring the Gold Purchase Agreement between the mine and the multinational companies Franco-Nevada (based in Barbados) and Sandstorm Gold Ltd. to be null and void. In addition to this contract cancellation, the two financial giants specializing in royalties were jointly ordered to pay the local company the sum of 5,218,224,600 CFA francs, or approximately US$9.3 million.

The origins of this dispute date back to March 2022, when Néré Mining, a company with majority Burkinabe ownership, acquired the Karma mine. It inherited a complex and particularly asymmetrical financial arrangement created in 2014 by the previous owners in exchange for an initial $100 million loan to build the mine. Although this capital was fully repaid in 2021, the unfavorable financial terms of the agreement continued to apply. Many analysts described this agreement as a "leonine" contract, imposing disproportionate obligations for an indefinite period, including an initial minimum term of 40 years, automatically renewable in 15-year increments. The agreement notably required the mine to deliver a portion of its gold production each month at an 80% discount, subsequently converted into a 5.2% royalty on its production, without any possibility of setting a predetermined interest rate. Furthermore, any financial commitment exceeding $10 million required the prior approval of Franco-Nevada, thus blocking the site's industrial modernization. Significantly, Riverstone Karma SA itself never signed this contract, which was negotiated by its parent company at the time, but remained obligated to bear all the associated costs.

The case examined by the Burkinabe justice system highlights the direct negative consequences of this contractual arrangement on Burkina Faso's public finances. By relying on shell companies domiciled in tax havens, the multinationals are accused of circumventing WAEMU (West African Economic and Monetary Union) rules to the detriment of national economic order. For the Burkinabe Treasury, the repercussions translated into a drastic decrease in the tax base due to the sale of gold at a price far below the world market rate, effectively reducing taxes paid. Furthermore, the Burkinabe state suffered a reduction in its dividends as a shareholder due to the stifling of distributable net profit, while the national balance of payments was weakened by the absence of regulated foreign currency inflows.

By firmly rejecting the multinationals' challenges to its territorial jurisdiction, the Ouagadougou Commercial Court affirms the full sovereignty of the national courts within the WAEMU zone in the face of the concealed exploitation practices of international firms. This ruling marks a clear break with historical mechanisms of economic dependence and sends a clear signal to international markets. Through this decision, the Burkinabe justice system is helping to redefine the rules of the game in the African mining sector, reiterating that future financing contracts must be based on fairness, respect for national laws, and an equitable sharing of the value of natural resources.