Australia's Perenti Global to end two Burkina Faso contracts after attack

(Reuters) - Australian mining services company Perenti Global Ltd said on Monday that it would exit mining services contracts in Burkina Faso following an ambush of a convoy with workers at a Canadian-owned gold mine in the region.

Women stand outside Bogodogo hospital where officials met with family members of victims of an ambush on workers near a Canadian-owned mine, in Ouagadougou, Burkina Faso November 7, 2019. REUTERS/Anne Mimault

Shares of Perenti ticked up following the announcement to rise 0.3% at 0206 GMT to A$1.95, compared with a 0.5% gain on the Australian benchmark.

In early November, attackers blew up an armored vehicle escorting a workers’ convoy and opened fire on their buses, killing 39 people and wounding 60 others, the worst attack the West African country has seen in years.

Some of the workers who were attacked worked for Perenti’s African Mining Services unit which has been contracted by Canadian gold miner Semafo Inc as well as London-headquartered gold miner Nordgold.

“The attack near Boungou was unprecedented and has prompted the Company to re-assess where and how it is prepared to operate,” Perenti Managing Director, Mark Norwell said.

Semafo suspended operations at its Boungou mine following the attack vowing to resume only after security was assured.

Perenti On Monday said in a statement that it is in talks with Semafo to terminate their contract should circumstances surrounding the mine remain the same.

Meanwhile, the company also notified Nordgold that it will exit its contract for mining services in Bissa by Dec. 14.

However, the company said it would continue to operate in three other sites located in central Burkina Faso considering them to be “lower risk” regions.

The total written down value of property, plant and equipment across the two sites is about A$85 million ($57.68 million), the company said, stating that it does not expect the cessation of operations to have a material effect on its 2020 earnings.

Separately, the company’s African mining services unit is looking to temporarily suspend operations at its Nsuta site in Ghana as part of its restructuring efforts.

Meanwhile, its Surface Mining Industry Sector Group also secured A$165 million in new and extended contracts on Monday.

($1 = 1.4736 Australian dollars)

Reporting by Shreya Mariam Job in Bengaluru; Editing by Christian Schmollinger