The DRC government continues to sit on $1bn in profits due to Barrick and AngloGold Ashanti

Mark Bristow, CEO, Barrick Gold

The government of the Democratic Republic of Congo (DRC) continues to sit on more than $1bn in profits from the Kibali gold mine due to Barrick and AngloGold Ashanti as the deadline looms for yet another prediction made by Barrick CEO Mark Bristow on when the funds will be repatriated.

In August, Bristow told Miningmx that “It will definitely get paid this year. I was hoping for this week” after noting that the appointment of Malangu Kabedi-Mbuyi as the DRC’s central bank governor in July was a key development.

He said the pay-out of profits only required the signature of the governor commenting “we have met with the governor and she totally understands the situation” but he also cautioned that “I’ve been wrong enough on this.”

Miningmx could not reach Bristow for comment on the latest situation. Last update was in Barrick’s results for the September quarter which stated Barrick’s $510m share of the Kibali profits was “subject to various administrative steps before they can be distributed to the joint venture shareholders and are held across three bans in the DRC including two domestic banks.”

The amount due to Barrick and AngloGold Ashanti has doubled from $250m each early in 2020 and is now material to their balance sheets. In Barrick’s case it is equivalent to 10% of the $5bn in cash and cash equivalents the group held at end-September.

In October 2020 Bristow said all that remained to get the money out was the paperwork but commented, “Being Africa, sometimes paperwork takes a little longer than normal but it is far down the road.”

The reluctance by certain third world country governments to let hard cash out of their economies is not restricted to the DRC as shown by the September quarter report from AngloGold Ashanti as well as the punitive terms of the recent deal struck between Petra Diamonds and the Tanzanian government over the re-opening of the Williamson diamond mine.

AngloGold Ashanti noted its “free cash flow was further impacted by the continued lock-ups of value added tax (VAT) at Geita (Tanzania) and Kibali and export duties at Cerro Vanguardia (Argentina)”

The group said VAT refunds due from the Tanzanian government amounted to $152m at end-September while the DRC owed it $74m in VAT refunds and it had $23m in “export duty receivables” due from Argentina.

AngloGold Ashanti added the Cerro Vanguardia mine had $140m in cash “eligible to be declared as dividends” for which it had applied to the Argentinian government to be allowed to pay the dividends offshore.