[miningmx.com] – MARK Bristow, CEO of Randgold Resources, said he
had sympathy with the Democratic Republic of Congo (DRC), which is seeking to alter
its mining code to give it an undilutable 35% of new mining projects built there.
Bloomberg News reported in October that the DRC was considering proposals to
revamp its mining laws that would give Government a 35% stake in the mining
industry, as well as higher proportion of royalties.
The report was later clarified by Martin Kabwelulu, the DRC’s mines minister, who told
Reuters the DRC government would not apply the mining code changes, if
implemented, retroactively.
“I am sympathetic to African governments, especially the DRC. There is a lot of
exploitation of African countries’ resources without the revenue,” said Bristow in an
interview with Miningmx. “It’s not all about greed in Africa.’
Last month, Bristow warned African countries that they risked damaging their
economies by pushing for “quick returns’ from the mining companies operating in
their countries.
Following the release of Randgold Resources third quarter results today, however,
Bristow was more conciliatory, saying that the DRC would follow due process in
implementing an update of its 10-year-old mining code, culminating in a tripartite
discussion before promulgation.
Commenting on whether Africa had become more unpredictable since Randgold
Resources commissioned its first mine (Morila) in Mali in 2000, Bristow said: “It’s
become a much easier environment. If you want to invest in Africa, you need a
quality asset in which all stakeholders can participate.’
In the last two months, Ghana and Cote d’Ivoire have expressed an interest in
introducing a 10% and 19% windfall tax on mining profits respectively. Randgold
Resources has paid Mali some $800m in taxes in seven years.
THIRD QUARTER
Randgold Resources posted a 15% quarter-on-quarter decline in net profit to $121.3m,
a performance that was still “in line’ with the third quarter of the company’s 2011
financial year.
Production came in at 204,475 ounces, slightly down on the previous quarter. Sales
were 10% lower, however. This was put down to timing with shipping and the effect
of a stock take at the refinery.
Speaking to Reuters, Bristow said annual production would be closer to the 825,000 oz
low end of a full-year output range, which stretched to 865,000 ounces.
Of the company’s mines, its Loulo complex in Mali was the stand-out performer, with
the underground sections at Yalea and Dara performing well.
Power supply problems at Tongon, a mine in Cote d’Ivoire, interrupted production. All
in all, Randgold estimated it had lost 50,000 ounces of gold since being connected to
the country’s electricity grid since December.
In terms of its projects, opencast mining had started at Kibali in the DRC, but
operations would not kick off until mills were delivered, currently en-route.
Another project, Gounkoto in Mali, had shown potential for underground mining with
an estimated 1 million oz identified grading at 5 grams/tonne. Another project,
Massawa, in Senegal, could be supplied with hydropower.
