Randgold: African mining code changes will deter investors
Mining code changes proposed by African countries will deter investment, Randgold's chief executive officer told a South African mining conference Tuesday.
Mark Bristow said with gold exploration and mining Africa must compete for investment with South America, Eastern Europe, Russia, Asia and other countries on the Pacific Rim. These competitors have better infrastructures, greater pools of skilled workers and more sophisticated economies.
Even a moderate change in current codes will diminish countries' ability to attract direct fixed investment or to encourage reinvestment, said Bristow. Governments need to provide a stable, business-friendly regime that will attract or at least not drive away investors and partner with mining companies in the development cycle.
Randgold's mines in Mali, the Côte d’Ivoire and the Democratic Republic of Congo return a substantial slice of their net revenue to the state, in spite of the fact that the company has funded all of the discovery and development cost and carried all the risks.
In South Africa, the government is considering a bill to amend the law for mineral and petroleum resource development, which mining companies say will hamper their ability to raise funds to construct mines.
Johannesburg law firm Edward Nathan Sonnenbergs claims, if the amendment ever became law, then South Africa’s ability to raise funds for mine development and production from the capital market would essentially cease to exist — putting an industry, already suffering from devastating industrial action and a weak global economy, into greater difficulty.
Image: Youtube screengrab