[miningmx.com] – RANDGOLD Resources would settle a long-standing $123m tax dispute with the Mali government before the close of the current financial year, said Mark Bristow, CEO of the UK-listed gold producer.
Randgold said in its second quarter and interim report that “… it had received claims for various taxes from the State of Mali totalling $123m”. The matter has been a feature of the gold firm’s quarterly statements and dates back to the previous Mali government before the 2012 ouster.
“We will get it sorted out this year,” said Bristow referring to a claim tax made by the previous Mali government in respect of the group’s Loulo, Gounkoto and Morila mines and the Kankou Moussa gold sales operation.
“It relates to the old regime. It interpreted our conventions in an imaginative way, shall we say,” said Bristow of the Mali government led by former leader Amadou Toumani Toure.
Toure’s administration was toppled in 2012 by rebels who were subsequently replaced by the current government led by President Ibrahim Boubacar Keita.
“The new government is in a good position to settle it as it is legitimate whereas the interim government would not deal with us. They actually encouraged arbitration because they had no political mandate,” said Bristow.
In a separate issue, Randgold said it was also hopeful of retrieving $138.6m in VAT repayments from the governments of the Democratic Republic of Congo (DRC) and Mali.
Bristow said there had been three-year repayment agreement with the DRC on recouping VAT receiveables, but in Mali an agreement was more protracted owing to a requirement for parliamentary approval of budget amendments.
“There is no dispute about the validity of the VAT repayments,” said Bristow. “What they need to do is have the International Monetary Funds sign off on a special budget provision. We have gone quite far and we are expecting the legislation (to change the budget) to go to parliament after recess in the August holidays,” he said.
Randgold Resources posted a $162.3m profit from mining representing a 54% increase year-on-year. The improvement was the result of higher gold production from Loulo-Gounkoto, as well as the newly commissioned Kibali mine in the DRC, which offset $209 per ounce decline in the dollar gold price year-on-year.
“We got our act together, especially on Loulo-Gounkoto,” said Bristow.
Commenting on a Bloomberg News report that he intended to “shake up” the gold producer’s exploration strategy, he added: “We’ve done an annual review and we could do things better. I think we’ve collected a bit of baggage in our thinking”.
The restructuring would capitalise on the surplus of geological skills following the contraction in the mining sector. “There’s alot of geologists flipping hamburgers at the moment. Whenever we bring top guys in, they bring new ideas,” he said.
This was after Paul Harbidge, who had been head of exploration at Randgold, had resigned after 14 years at the company.
