BARRICK Gold expected to be paid $500m in joint venture revenue from the Democratic Republic of Congo (DRC) “very soon”, according to Reuters which cited the Canadian firm’s CEO, Mark Bristow.
In terms of an agreement with the DRC, 60% of revenue earned from the Kibali mine, which Barrick controls in joint venture with AngloGold Ashanti, has to be repatriated to the central African country for economic development purposes, internal dividends, and to pay creditors. The balance of the revenue is paid into a joint venture offshore account to pay creditors and to meet other obligations.
The joint venture partners are, however, allowed to extract any excess revenue from the DRC. However, this requires the approval of the DRC authorities. As that approval has been slow coming, the monies have built up over time and were estimated to be $500m at the close of the last quarter.
Bristow told Reuters that a resolution on the repayment of the monies in the DRC was close in January before the interruptions posed by COVID-19. Bristow expected the cash to be cleared for exit “very soon”, said Reuters. He declined to provide a specific timeline, but said there had been intensive discussions with the central bank as well as the mines minister and prime minister.
Barrick needs the $500m in order to pay back loans and dividends, Bristow told Reuters. AngloGold Ashanti declined to comment, referring Reuters back to Barrick. In May, Bristow had said the issue of the $500m “keeps us awake at night”.
Barrick’s push to get the money out comes as the DRC’s economy is under significant strain from the pandemic, with foreign currency reserves shrinking and mining companies taking longer to repatriate the 60% of mineral sales, said Reuters.
“Unfortunately, we have noted that repatriation of the 60% is currently erratic,” mines minister Willy Kitobo Samsoni told Reuters. He warned mining companies to repatriate that capital immediately, or risk sanctions as set out in the mining code.
