Mark Bristow lambastes Ghana as a mining destination

Randgold Resources walked from a proposed joint venture with AngloGold Ashanti on the Obuasi mine in Ghana because of a combination of technical mining issues and management’s deep concern about the social situation around the mine and the probability of  illegal mining activities.

That’s according to Randgold CEO Mark Bristow speaking at a media briefing in Johannesburg today at which he commented, “ the social risk there was enormous.”

Bristow also cited Randgold management’s concern over the “complete lack of support” from Government for plans to redevelop Obuasi as well as the level of corruption in the country which Randgold first encountered when it bid for control of the former Ashanti Goldfields in 2003.

“Corruption is a big issue in Ghana,” Bristow commented.

Randgold pulled out of the proposed JV in December last year and Obuasi was subsequently invaded by illegal miners in January.

AngloGold Ashanti has now brought arbitration proceedings against the Ghanaian government through the International Centre for Settlement of Investment Disputes (ICSID) requesting that ICSID make an urgent order forcing the government to “amongst other things, re-instate military security and restore law and order to the Obuasi mine.”

In August, AngloGold CEO Srinivasan Venkatakrishnan denied the illegal mining issue was the reason that Randgold had walked away from Obuasi saying the invasion took place some six weeks after Randgold had decided to opt out.

Bristow commented, “ when we got there (Obuasi) we could not make it work. There were some major environmental issues to be dealt with and the social licence from the community around was scary……you have seen what happened as a product of that.”

Bristow also delivered a damning indictment of the Ghanaian government stating “we were very concerned about the complete lack of support from the Government for this whole plan. When we go into a country we see ourselves as partners with Government because we are developing a national asset.

“They did not see it that way. We pointed out no-one had made real money investing in mining in Ghana and, if they wanted me to bring my shareholders’ fresh capital into the industry we needed a convention; we needed rules of the game; we needed to know that they would support this investment and deal with these illegal miners and other issues around the mine.”

Bristow added, “we have made many attempts to invest in Ghana and we have always been rattled by the intervention at the political level for big investments which is quite aggressive – it’s a bit like South Africa.”

In a reference to the benefits of mining in the French speaking countries of West Africa – where the bulk of Randgold’s operations are located – Bristow commented, “ Ghana used to have the best mining code. It has always been a ‘go to’ country because the official language is English but we don’t have to speak English to do business.”