Endeavour Mining runs four mines located in three West African countries – Cote d’Ivoire, Burkina Faso and Senegal – and that is an aspect which seems to worry some Western world investors because of recent political developments in the region. These include the threat of jihadist revolutionaries moving south from the Sahel area as well as recent military coups in Mali, Burkina Faso and Guinea coupled with an apparent shift by the new regimes away from the West.
In particular there are concerns over a growing Russian influence in West Africa.
Cockerill, like his peers operating in West Africa such as B2Gold CEO Clive Johnson, plays such fears down. “Risk is very much in the eye of the beholder. You could argue quite conclusively that the risk of mining in America is very high, certainly in many states, for a variety of reasons.
“The one thing you learn from operating in Africa is to manage volatility. You learn to make yourself resilient and to cope with unpredictability and inconsistency. If you want a quiet nine to five life then working anywhere in Africa can be extremely challenging but West Africa today is the single largest gold producing area in the world.
It is also one of the most prospective areas in the world for gold and it has a relatively short time period for permitting, says Cockerill. Projects can be permitted and then implemented in a much shorter time period than anywhere else in the world. The reason for that is West African governments have realised that developing a gold mine in its own backyard can be lucrative. “If you understand West Africa and you have the right people and you know how to manage the risks then the rewards certainly justify those risks,“ says Cockerill.
Turning to geopolitics Cockerill said the history of West Africa showed a pattern of ebb and flow over time. “You had the colonial power – France – in there for a long time and then they got kicked out. The Russians came in during the 60’s and 70’s then they retreated and the French came back in. Now the French are going again.
“I would argue it’s part of a natural cycle. What we are seeing is behaviour from governments that you would expect. They are looking for a bigger share of the economic pie.”
Cockerill said a big positive in West Africa was a recognition of the rule of law. During an illegal strike at Endeavour’s Houndé mine in Burkina Faso Endeavour won a court decision ruling the strike illegal. “Then the actual prosecutor went out to the mine and personally handed down the judgement to the strikers. He told them that if they did not go back to work they would be fined for every hour that they did not work. Can you honestly say that would happen elsewhere? Cockerill asked.
“I am less inclined to listen to stories about working in OECD countries. Fine, you would expect things there to go a certain way but probably the returns are not what they would be elsewhere.
“The issues (in West Africa) are – do you understand the level of risk; do you understand the level of volatility; and do you have the right people with the right mentality and attitude who can actually cope with that and work in a constructive atmosphere with government? “I have always found if you have an open communication you can get through”
