The current stressed state of the mining sector was prompting governments and investors to work together to sustain the industry and make it deliver real value for all stakeholders, Randgold Resources CEO Dr Mark Bristow said last week.

Speaking at the 2016 Investing in African Mining Indaba, Bristow made the point that a growing number of participants were beginning to grasp the significance of government-industry partnerships and making sincere efforts to align interests.

He reminded the audience of Africa’s chequered history of being “ruthlessly exploited” in the past for the benefit of overseas rulers and the continent’s eventual independence prompting the effective exclusion of the west and experimentation with various forms of socialism and nationalism.

But the demise of apartheid in 1994 set the scene for the continent to move to democracy and market economies.

It was worth recalling how, in the mid-1990s, great strides were achieved by the mining sector within a relatively low commodity price environment.

Randgold itself set out in 1995 with less than $10-million of capital raised through a private placement and grew value consistently thereafter “using Africans for Africa in Africa” without ever deviating from the company’s firmly entrenched investment filters.

When the supercycle started, sparked by the Chinese boom, the company ensured that it was well placed to exploit the opportunity fully.

“Looking at the supercycle in our rearview mirror, it’s clear that is was a very exceptional event that comes about once in a generation and we were prepared for its start as well as its end,” said geologist Bristow, whose company has been built on discovery and development.

But, because of the lack of exploration overall, gold mining, in general, was caught flat-footed by the boom and “recklessly” raised enormous amounts of equity and debt without increasing the volume of gold produced.

“All that money and still the gold miners ended up running on the spot,” he said.

The industry’s spending spree took no cognisance of the core issue of grade, which resulted in more tonnage having to be mined to lower costs and increased revenue, plus the accompanying depletion of reserves.