(Bloomberg) -- Burkina Faso forcibly purchased 200 kilograms of gold from a unit of Endeavour Mining Plc as the West African nation faces a worsening food crisis and its military leaders fight an Islamist insurgency.

Endeavour shares fell 3.8% in Toronto on Wednesday after reports the government had issued a decree to take the gold from the company’s Semafo Burkina Faso SA unit to cover “public needs.” Endeavour confirmed it had signed a contract to sell about 7,000 ounces from its Mana mine at current market prices. 

“This sale is in line with the country’s mining code which stipulates that it may acquire gold directly from mining companies, in exceptional circumstances for reasons of public necessity, subject to fair and pre-agreed terms,” Endeavour said in a statement.

Interim President Ibrahim Traore took power in September in the second coup in six months, promising to step up the fight against the militants that control almost half the country’s territory. Burkina Faso, which is seeking to process gold locally to generate more revenue from its key export, sought to reassure investors after announcing the forced purchase.

“The government reassures investors and all the other partners of Burkina Faso that the requisition decision comes within an exceptional context dictated by public needs in which the state is asking certain mining companies to sell part of their gold production to the state,” it said in a statement.

It wasn’t clear how or in what currency the Burkina Faso government would pay for the gold. A spokesman for the mining ministry declined to give further details on the reason for the purchase.

Gold mining operations have been hampered by violence in the country, where 2.6 million people face acute food insecurity. 

Russia’s Nordgold halted operations at the Taparko concession in April, saying workers’ lives were in danger. In August, gunmen killed six people in an attack on a convoy returning from Endeavour’s Boungou mine.

Burkina Faso last month ended its military collaboration with France, after relations frayed when Traore’s junta came to power. French troops withdrew from neighboring Mali after a 2020 coup in the former colony and the deployment of the Wagner Group, a Kremlin-linked Russian private military company.

--With assistance from Thomas Biesheuvel.

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