ENDEAVOUR Mining CEO Ian Cockerill has warned West African nations not to repeat the mistakes of South Africa by introducing regulations that will hurt long-term investment.
“We’ve seen down in South Africa for instance. Basically when they brought in the new mining code in 2004, 20 years later we see what has happened. Effectively there has been an investment strike there,” said Cockerill.
South Africa’s Minerals and Petroleum Resources Development Act set down black empowerment targets including 26% ownership of companies (or units of production). The Mining Charter, which set other targets in place, was re-written on several occasions.
“That’s the last thing West Africa needs. It needs fresh investment, it needs tax flow, it needs employment, and I think we as business have a responsiblity to sit down and have an honest and open dialogue with the authorities.”
Net fixed investment in South Africa’s mining sector has fallen from a 20 year high of R45bn in 2010 to around R22bn in 2022, according to Minerals Council of South Africa data published last year.
Cockerill was speaking at Endeavour Mining’s third quarter results presentation last week in which the group reported a 0.39 cent per share third quarter earnings loss which increased the year-to-date loss to 0.71 cents/share.
Cockerill’s comments come amid a raising in the temperature of relations between mining companies and host governments this year, especially in Mali.
On November 9, Resolute Mining CEO Terry Holohan was detained by Mali government officials following a meeting in Bamako about certain progress “open claims” made against Resolute which it said were unsubstantiated.
Barrick Gold employees were also detained in Mali last month. As with Resolute, Barrick is involved in discussions with Mali regarding allegations of unpaid tax. Barrick’s CEO, Mark Bristow says he remains open to finding an amicable agreement.
While Endeavour has no operating footprint in Mali other than a development asset, Kalana, Cockerill said the company had recently held discussions with Côte d’Ivoire.
“We are in discussion with the government and we are saying: ‘be careful. You are now starting to push the outer edge of the envelope. We understand you need taxes but we invested in operations given certain criteria.
“Be careful you don’t introduce criteria that discourages investment because the gold industry in Côte d’Ivoire is a very healthy portion of GDP. We don’t want Assafou [a 4.5 milion oz resource] to be unduly prejudiced by any deleterious increase,” he said.
Cockerill said that in general relations between Endeavour and Burkina Faso and Senegal were healthy, although the company had also warned them about imposing new regulations that would deter fresh investment.
