Canadian gold miner Iamgold Corp. is attempting to reassure investors after the company suffered its second attack on a bus convoy of workers inside of three months, amid growing jihadist violence in West Africa.
On Friday, a convoy of buses and supply trucks carrying 33 employees and contractors to Iamgold’s Essakane gold mine in Burkina Faso was ambushed. Immediately following the attack, which occurred twelve kilometres from the mine, one employee and one contractor went missing.
“At the time of the incident, passengers on the buses and the drivers of the trucks fled the area and two individuals could not be immediately located, but were subsequently found safe,” Gord Stothart, chief executive officer of Toronto-based Iamgold, wrote in an e-mail to The Globe and Mail.
The Friday incident happened after a similar attack on an Iamgold convoy in late August, in which a member of a government security team escorting the convoy was shot and injured. The attacks also arose amid a backdrop of growing militant violence in West Africa. Thousands of people have been killed in recent years by Islamist insurgents and other militant groups in the sub-Saharan Sahel region of West Africa, which encompasses parts of Mali, Niger and Burkina Faso. Over the past few years, both small-scale artisanal miners and large gold companies have been targeted with insurgents in some cases stealing equipment or demanding ransoms after kidnappings.
In late 2019, 39 employees of another Canadian gold mining company, Semafo Inc., were killed in a gun attack by jihadists while en route to a mine in Burkina Faso. In the aftermath, Semafo was sold at a discount to Britain’s Endeavour Mining Corp., and the affected mine was closed for about a year amid safety concerns. Earlier that same year, an executive of Vancouver-based junior gold company Progress Minerals was found dead in Burkina Faso after being kidnapped
Iamgold’s Essakane mine is located in the northeastern part of Burkina Faso, the epicentre of the chaos in the Sahel.
“It is by far the most violent region in the country,” said Dan Eizenga, research fellow with the Africa Center for Strategic Studies. “One out of every eight attacks in Burkina Faso takes place in the immediate vicinity of this mine.”
Iamgold has repeatedly warned investors of the risk of terrorist attacks over the past couple of years.
“Jihadist activities in Burkina Faso and Mali present a serious security risk to the company‘s Burkinabe and Malian operations and its personnel,” the company wrote in a regulatory filing this year. The Essakane mine is potentially “a valuable target to a terrorist organization due to the presence of a high number of employees and expatriates.”
On Monday, Iamgold said it remains “strongly committed to ensuring the health, safety and security of personnel and operations,” as it assesses the situation and makes appropriate changes.
Mr. Stothart said in the e-mail that the site has “implemented enhanced protection measures for our work force and facilities, modified certain of its transportation arrangements and strengthened its threat identification system.”
Iamgold did not respond to a question about whether the company was looking at flying more workers to and from the site, in lieu of busing people in on convoys.
“We do not discuss the specifics of our security arrangements, in order to ensure the ongoing safety and security of our personnel, " Philip Rabenok, manager investor relations with Iamgold, wrote in an e-mail.
So far, the attacks on Iamgold have not had a material impact on production at Essakane.
Against this backdrop, Iamgold is attempting to tilt its portfolio increasingly toward jurisdictions with much safer security footprints. The company is building the Côté mine in Ontario, which it hopes to have in operation in 2023. Once up and running, Côté will be one of the biggest gold mines in Canada.
Essakane, however, remains for now Iamgold’s biggest asset by far, producing 314,000 ounces of gold so far this year, or 70 per cent of the company’s entire output.
Shares in Iamgold rose by 1.8 per cent to close at $3.47 apiece on the Toronto Stock Exchange on Monday.
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Niall McGee