Randgold miner in search to diversify

AFRICAN miner Randgold Resources is looking to make its first acquisition outside its home continent in North and South America to diversify its portfolio of assets, chief executive Mark Bristow said.

The London-listed miner has invested throughout the commodity price downturn, generated cash and steadily increased dividends – while rivals have been struggling with big debts taken on to fund acquisitions and expansion.

Flush with cash, Randgold is on the hunt for gold mines outside Africa.

“We have about $900-million (R10.5-billion) of ammunition to do anything that arises,” Bristow said.

“We would rather stay in our time zone and go West.

“So South America, North America, the Americas in general,” he said, declining to name any countries.

Africa’s main producers of metals, including South Africa, the Democratic Republic of Congo (DRC) and Tanzania, have recently moved to review mining regulations and codes, spooking potential investors.

“There has not been genuine exploration in sub-Saharan Africa in the last few years,” Bristow said.

“This move to review the mining codes since the collapse of the [commodity] supercycle has chased away serious explorers.”

The proposed new DRC mining code, approved by its parliament last month, could see royalties on cobalt, a vital component in electric car batteries, increase five-fold to 10%.

It also removes a clause in the law protecting miners from changes to the fiscal and customs regime for 10 years.

Bristow has said Randgold stands to lose about $10-million (R117-million) a year, should the new mining code be signed into law.

Last year, about 75% of gold mine transactions were in lowrisk jurisdictions such as North America and Australia, an EY report said. – Reuters