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Mining companies in Burundi accused of plunder

Mining companies in Burundi accused of plunder

Mining companies involved in extraction and export of rare earth minerals in Burundi have been accused of plunder by the government. Prime Minister Alain-Guillaume Bunyoni said the companies have been suspended from their operations pending a pack of accusations and violations.

“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.They have duped the Government from the conventions that govern their operation to the execution of their activities. Some sort of scoundrels,” said Prime Minister Bunyoni.

Rainbow mining company is among the companies 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.

Win-win principle

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.”

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. The Rainbow Mining Company has been reported to have 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,” said the ministry in charge of mines.

Rainbow mining company is also accused of not honouring its contractual obligations contained in agreements.

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