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In Burundi, mining activity operates under a dual regulatory framework governed by the Investment Code and the Mining Code. The Investment Code establishes a broad, open regime designed to attract foreign capital, applicable to all sectors including mining. The Mining Code, as the sector-specific legislation, was revised in 2023 and now imposes more rigorous and detailed stipulations, particularly regarding revenue sharing and state involvement.

While the Investment Code offers broad incentives and facilitation for investors through inclusive policies, the Mining Code imposes additional obligations on operators via specific tax regimes, revenue mechanisms and stricter oversight. Therefore, mining investors in Burundi benefit from general investment incentives but must also comply with distinct regulations.

Incentive policies

The 2021 amendments to Burundi¡¯s Investment Code create a favourable regime for foreign investment extending to mining exploration, exploitation and other sectors. A new chapter details a structured incentive scheme offering both tax benefits and administrative facilitation.

For the mining sector, preferential measures include: (1) duty-free import of equipment and raw materials; (2) a corporate tax relief scheme for more than five years, starting at 5% in year one, 10% in year two, and progressively increasing to 25%; (3) tariff exemptions for East African Community goods; (4) value-added tax benefits on capital goods; and (5) expedited visa and work permit procedures.

The standard incentive period is five years, with extensions to 10 years permitted for priority sectors including mining, agriculture and finance.

Burundi also provides institutional safeguards for foreign investment. The property rights of natural and legal persons are protected under domestic legislation from expropriation and nationalisation.

Foreign-invested firms are eligible to participate in government tenders and secure land ownership, and investors are entitled to freely remit profits after fulfilling tax obligations.

For dispute resolution, options include recourse to national authorities and arbitration at the International Centre for Settlement of Investment Disputes. These provisions are designed to reduce investment thresholds, provide predictability, and ultimately boost Burundi¡¯s competitiveness in attracting foreign capital.

Stringent regulations

Burundi has been intensifying national regulation within its mining industry since 2021. The period from 2021 to 2023 saw the government suspend or cancel licences for multiple foreign mining operations, notably at major sites such as the Gakara rare earth deposit and the Musongati nickel project. The objective is to renegotiate mining contracts considered disadvantageous to the country.

In this context, the Mining Code, promulgated in 2023, has substantially increased the state¡¯s involvement and benefit sharing in mining projects. It mandates a minimum free-carried interest of 16% for the state in mining joint ventures, with this share rising by 5% at every licence renewal. The state may also purchase additional equity, allowing for a potential total holding of 49%.

The 2025 Implementation Regulations further grant the state the right to appoint two-fifths of the board and exercise a veto on key matters. This marks a decisive policy shift from the previous version of the Mining Code, which required only a 10% minimum state share and confined the state to a purely regulatory, non-operational role.

The revised legislation provides for state revenue acquisition not only through shareholding, but also via a production sharing mechanism, guaranteeing a base share of at least 16%, which escalates by 5% per licence renewal.

Burundi¡¯s government predominantly opts for this production sharing approach. It offers lower costs, ensures earlier and more direct fiscal returns and facilitates easier regulatory control, as monitoring requires only export verification without involvement in JV management.

The Mining Code also enhances national oversight of the mining value chain via export limits on raw minerals, support for domestic processing, stricter localisation targets and a comprehensive revision of the fiscal system.

This reform agenda is not just an echo of African resource nationalism. It is a realistic policy for Burundi, pursued within its institutional limits, to advance industrialisation by bolstering state income and embedding itself more firmly in the industrial process.

Takeaways

Investors must recognise the core intent behind Burundi¡¯s regulatory approach. The country is not opposed to foreign investment, but is pursuing a strategy of ¡°conditional partnership¡±.

This implies that firms are expected to go beyond merely complying with legal duties such as in-country processing, technology transfer, employee upskilling and social obligations, and to view these as part of a broader alignment with national development goals.

Engaging more substantially in the local value chain within the prescribed institutional structure allows firms to lessen policy-related risks and cultivate a stronger, more credible partnership with the host government.

Viewed in a broader context, Burundi¡¯s reforms illustrate a regional trend where African resource producing countries are abandoning a purely capital-focused ¡°scale-driven¡± model in favour of a ¡°value-oriented¡± strategy that seeks comprehensive benefits.

Firms that embrace this change ¨C by establishing leading practices in technical standards, local operational integration, ESG (environmental, social and governance) performance and value-added production ¨C are set to secure a strategic position within Africa¡¯s reshaping resource governance framework.

Cheng Jun is an equity partner and Hu Jia is an associate at Zhong Lun Law Firm