Randgold doubles dividend as Mark Bristow takes aim at DRC mining code
London’s largest gold miner Randgold Resources has doubled its full-year dividend while warning it faces onerous new regulations in one of its key jurisdictions.
Randgold will lift its shareholder payout by 100pc to $2 a share, after a year of record production and soaring profits.
But the FTSE 100 company’s chief executive and co-founder, Mark Bristow, warned that a new mining charter in the Democratic Republic of Congo would have “serious consequences”.
The law has passed both houses of parliament in the central African country and is on President Joseph Kabila’s desk waiting for him to sign. Mr Bristow, who has travelled to DRC personally to lobby the president, said the “draconian” new code undermined the previous charter, struck in 2002, which was the basis for Randgold investing in the Kibali mine.
Although it would have little financial impact in the short term, “the worry is the threat to stability”, Mr Bistow said. “You can’t expect us to continue to invest in a country that doesn’t respect its own laws.”
Randgold, along with Glencore, is one of the few western companies to invest in the country. Mr Bristow insisted the miner was committed to supporting DRC’s development, but described the new code as an “over-enthusiastic attempt to harvest the taxes without thinking of the importance of longer-term investment”. The company could seek international arbitration if the code is put into effect.
For the full year, Randgold’s gold production rose 5pc to 1.3m ounces, ahead of guidance, while revenue climbed 6pc to $1.28bn (£906m). Pre-tax profits jumped 16pc to $480.8m. Costs fell 3pc in 2017, which Mr Bristow called the “best year in the history of the company”. Randgold also has mines in Mali, Ivory Coast and Senegal.
Mr Bristow, who has led Randgold since its formation in 1995, insisted he had no plans to call it day. In South Africa to attend the Indaba mining conference this week, he sounded an opportunistic note about the prospects for the industry this year.
“We’re seeing material positive changes in Zimbabwe and South Africa, and West Africa is doing very well. At the same time you’ve got little wrinkles in DRC and Tanzania,” he said, citing another country that has targeted miners for more tax.
Mr Bristow also warned that some African countries ran the risk of “becoming uncompetitive”, particularly when compared to tax cuts in countries such as the US.
Randgold shares fell 2pc in morning trade to £69.06.
