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Sustainable gold mining the Randgold way

Randgold CEO Mark Bristow shares his philosophy on working with local government and the community.

Randgold Resources has been one of the most successful explorer/developer/miners in recent years bringing on stream a number of world class gold assets in Mali, Cote d’Ivoire and most recently at Kibali in the DRC, which is currently being built into one of the world’s largest gold mines. The company should comfortably exceed annual attributable output of more than 1 million gold ounces this year. Thus company CEO, Mark Bristow, has great experience in building mines in areas perhaps shunned by most of the gold majors, apart from those like Gold Fields and AngloGold (Randgold’s principal partner at Kibali) which were Africa based in the first place. The company has been growing production annually virtually every year since its inception and has been consistently one of the best stock market performers in the mining sector.

That said, Bristow should be considered an excellent choice to talk about how the modern day miner can maximise shareholder returns and in this he is particularly vehement in putting forward his philosophy that is perhaps key to a company’s success in emerging regions in that companies should not concentrate on one stakeholder class over another but should ensure that all benefit equitably from their activities.

Speaking at the Mines and Money conference in London earlier today, Bristow said in the emerging regions, where the gold mining industry’s operations were now largely located, the host country was a particularly important player and should be embraced not only as a stakeholder but as a partner. This is actually a theme he expounds at almost every speaking opportunity and one Randgold has followed carefully, which has enabled it to continue mining at its principal operations almost uninterrupted through government changes and civil strife.

Randgold’s record in this respect is probably the reason that the ‘senior’ partner in Kibali, AngloGold Ashanti which, like Randgold, owns 45% of the project, ceded operational management of the massive new development to Randgold. And Randgold hasn’t disappointed bringing the mine in one of most remote regions in Africa, on stream ahead of schedule and is currently bringing it up to full production.

“Mining anywhere, but particularly in emerging regions, exploits a country’s national assets and so it’s important that the host country and its people benefit from this,” he said.

“Arguably, a mining company’s primary responsibility is to its host country, although of course shareholders are also critically important because without investment there would be no mining projects. Mining companies and their host governments should be aligned in the drive to attract such investment and to ensure that all shareholders benefit.”

Bristow said gold mining companies could only satisfy the expectations of shareholders as well as other stakeholders through sustainable profitability.

“To achieve sustainable profitability, a gold mining company has to get a lot of tricky variables into equilibrium within the framework of a coherent strategy. In other words, it needs a long-term vision, not merely an urge to exploit a passing market trend. In a cyclical sector, it makes no sense to run a business that relies solely on a rising gold price to be able to deliver value,” he said.

In particular the company has eschewed the old colonial policy of keeping mine operational management in the hands of expatriate engineers, training locals up into key positions right across the management structure. At Kibali for instance, it took a key number of locally sourced Congolese employees to its Mali operations to train them up so they could be fully operational in supervisory management roles as the new mine came on stream. This concentration on employing locals, not only as ordinary mineworkers, but as managers and supervisors sends an important message to the local community which helps keep them on side – very important in this day and age.

It also helps these communities build up local businesses which can continue when the mining operation eventually closes many years hence – the true meaning of sustainable mining. It also builds schools, churches and local infrastructure (rather than just clubs and golf courses for the expatriates which was perhaps the old colonial pattern). It also works closely with local communities on many matters which may seem peripheral, but are often ultimately very important to the mining operation itself – education being an example – and recently has been proactive in helping government in the areas in which it operates in combating the potential spread of ebola.

Thus miners these days need to be all-inclusive in their approach, otherwise their operations may be shortlived if government, or the local community, feels it is not contributing sufficiently for the privilege of exploiting their resources.

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