Africa is generally considered a high-risk mining environment, but gold explorer and miner Randgold Resources CEO Mark Bristow argues that the problem is rather that companies are not flexible enough to adapt their management techniques to different mining environments.

“Risk in mining relates mainly to management rather than jurisdiction,” says Bristow. He adds that unfounded prejudice might also inform people’s risk perceptions, stating that a lack of cultural understanding on the part of investors is a large barrier in terms of attracting foreign direct investment (FDI) to Africa.

Bristow partly attributes Randgold’s success in West Africa to its ability to negotiate the continent’s different cultural spheres.

“I would rather mine in the Democratic Republic of Congo (DRC) than somewhere in South America because I understand the culture of the DRC,” says Bristow.

In terms of mining, there are world-class deposits in West Africa. The region is home to the Birimian Shield, which is the nucleus of the old crust in West Africa, spanning across Senegal, Mauritania, Niger, Mali, Côte d’Ivoire, Ghana and Burkina Faso. Accessing these deposits requires strong management, Bristow asserts.

He acknowledges that challenges remain in parts of West Africa, but adds that Randgold has developed the ability to endure tumultuous political and socioeconomic environments.

High taxes in Mali and the DRC, concerns about proposed new mining codes in the DRC and Senegal, and illegal mining in West Africa are significant challenges, says Bristow.

In Mali, there was a coup in March 2012 and an outbreak of Ebola in 2014. However Randgold’s Loulo, Gounkouto and Morila mines, in Mali, have continued to run steadily, with the company assisting government in managing the Ebola outbreak.

Further, Randgold’s Tongon mine, in the northern region of Côte d’Ivoire, had poured its first gold in 2010 after a long period of civil unrest in the country.

Côte d’Ivoire currently shows steady gross domestic product (GDP) growth of about 9% a year and is peaceful, with Tongon producing about 230 000 oz/y, Bristow enthuses. The country, due to have an election in October, has two ports, a sophisticated civil service and is the only West African nation with a fully functioning power grid, he adds.

Bristow believes that other African nations, including the DRC, are beginning to gain more stability after enduring civil wars of their own.

Despite the fragile control of the State in the DRC – especially in the eastern region and close to Randgold’s 500 000 oz/y Kibali gold mine – the clarity of the country’s legislation makes it the easiest location in which to set up a mine, he says. The DRC is due to have an election in November 2016.

Randgold in West Africa
Randgold Resources entered into the supposedly risky West African market in 1995, when the gold price was at a low of $300/oz, but Bristow says that, owing to good management strategies and a flexible, hands-on business model, the company has achieved significant success in the region.

He says in the 1980s, as resources in more infrastructurally endowed nations began to diminish, mining companies that sought to venture elsewhere had to change their business model to a more hands-on approach – “miners could not remote control their mines from Denver or Johannesburg”.

Bristow explains that Randgold bases its business model on shared benefit, dialogue and durability: a sustainable mining enterprise entails profitable mining projects to the benefit of all stakeholders, including the Treasury and communities. To achieve the goal of shared benefit, the company has sought to employ and develop local skills, thereby contributing to the skills base of the region.

There are no expatriates in executive management structures at Randgold’s operations in Mali, with fewer than 50% of management positions occupied by expatriates at operations in the DRC and Côte d’Ivoire, illustrates Bristow.

Bristow laments that Africa still endures exploitation at the hands of corrupt politicians and investors that regard Africa as a place to make a “quick buck”, and highlights the importance of being a corporate citizen, citing Randgold’s high engagement with the governments in West Africa and the company’s role as one of the largest producers and consumers of electricity in West Africa.

Randgold contributes 10% of Mali’s GDP and it is the biggest taxpayer in Mali, Bristow says, adding that Randgold is also one of the biggest taxpayers and investors in Côte d’Ivoire.

Further, Bristow praises African economies that are open to FDI, adding that he has found that the more that a government is accountable to its people, the more it attracts FDI.

“The mining industry has made a significant contribution to West Africa and it will continue to do that as long as West Africa continues to attract FDI.”

Moreover, risk is mitigated by infrastructural investment and development because it improves people’s standards of living, relieving them from desperate situations, he argues.

Bristow supports the development of a west-to-east corridor from Dakar, in Senegal, to Dar es Salaam, in Tanzania, and asserts that big projects such as this one should be encouraged to drive the massive potential of Africa’s economy.