MINExpo Issue - MINING.com Magazine

Country
As for the governments, it is their responsibility to maintain a
fiscal and legislative regime that is conducive to mining development,
to play their part in infrastructure creation and, not least,
to share the wealth equitably with their people.
Fiscal and Mineral Rights
There is plenty to go round. Randgold Resources has analyzed
the fiscal and mineral rights regimes in most African countries
and whichever way you slice the viable mineral project cake,
government ends up with about half. Unfortunately, governments
are not always completely upfront about the substantial
extent of their participation in the earnings generated by mining,
and this lack of transparency contributes to the misperception
that all mining companies are greedy exploiters of their host
countries.
It’s against this background that we at Randgold Resources
have always believed that you create sustainable profitability by
investing in partnerships and people. Since we were first listed
in 1997, we’ve done extremely well for our shareholders, building
the company into a $3.5 billion business from a tiny base.
But we’ve done as well for Mali, the country where we have
our principal operations. We’ve invested and reinvested more
than $1 billion there. The mines we developed have contributed
more than $500 million to the government in taxes, royalties and
dividends. The projects we have found and operate constitute
the country’s largest taxpayer and its largest private-sector
employer, having provided more than 3,500 Malians with skills
and careers.
And we have done that because we have a long-term commitment
to the country and the region, and because we’ve dealt
with the government not only as a 20% shareholder in our mines
but as our principal business partner.
The benefits of this long-term commitment are, I believe,
evident from our record: we’ve discovered three multi-million
ounce deposits, built two world-class mines and we’re currently
developing our third. Extensive exploration programmes
continue to generate a portfolio of organic growth projects that
could well produce our fourth mine. Our focus on sustainability
has given us the capacity to increase our production - at a time
when industry output is in decline—and therefore our profits.
And that in turn means that we can continue to invest in people,
24 MINING.com September 2008
partnerships and projects, and that we will continue to create
real value for all our stakeholders.
And the market evidently recognises the merits of this approach.
Randgold Resources is a mid-size company and pure
African play focused exclusively on gold. Yet its share price
has for more than a year significantly outperformed those of its
peers as well as of the industry bellwethers—companies with
a much broader geopolitical spread and a much greater mass
than ours.
I certainly don’t presume to hold up Randgold Resources as
a model for the mining industry; we all have our own strategies
and circumstances. But I do believe the lessons we have learned
and the success we have had in applying them may provide
some useful pointers for other companies as they venture into
Africa or seek to develop a meaningful and enduring presence
on this continent.
You can make real returns for your investors by investing
in Africa.
This article was a presentation made initially to the Global
Capital African Mining Forum in London on May 8th and published
in Mineweb.
Links and References
Boom in Metals Prices
Bull Run in Gold
Commodity Prices
Commodity Mania Analysis
Exchange Traded Funds
Francis Fukuyama’s End of History
Gold Companies
Industrial Demand Behind Boom For Metals
IT bubble burst
Randgold Resources
The Enron affair
Click here for full list of links:
http://go.mining.com/sept08-a7
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