Mining code change threatening investment – Randgold
Mining code changes proposed by a number of African countries would deter further investment, Randgold Resources CE Mark Bristow warned last week.
Bristow told the Investing in African Mining Indaba that with gold exploration and mining shifting from the developed countries to the world’s emerging prospective regions, Africa had to compete for investment with South America, Asia, the Pacific Rim, Eastern Europe and Russia.
While Africa had the advantage of great mineral wealth, its competitors generally had better infrastructures, greater skills pools and more sophisticated economies.
In countries where Randgold has ope- rations – Mali, Côte d’Ivoire and the Democratic Republic of Congo – the present mining codes returned a substantial slice of the net revenue pie to the State in spite of the fact that Randgold had funded the entire discovery and devel- opment costs and carried all the risks.
The host country was already a significant, if not the main, beneficiary of its mining activities, which was why it was disturbing that there was a growing tendency among the sub-Saharan Africa mining countries to want more without giving anything back.
Bristow said that even a moderate change in their current codes would diminish their ability to compete for direct fixed investment or to encourage reinvestment.
“There’s a much better way for these countries to get more from their mining industries, and that is to participate posi- tively in the value creation process,” he added.
Real value was created by the discovery of multimillion-ounce gold deposits and their development into profitable mines.
Governments’ role in this should be to provide a stable, business-friendly regime that would attract or at least not drive away investors, and then to partner the mining company in the development cycle, helping to drive the project up the value curve and sharing fairly in its proceeds.
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