Randgold has been active in the DRC since 2006. Can you please provide a brief history of the company’s presence in the DRC and how Randgold operates here today?

Randgold Resources was established in 1995 to create value for all its stakeholders by discovering and developing world class gold deposits in Africa. Our objective was to prove that you can invest in Africa and make real returns, and that Africans do not need to be shy about their talents. For 23 years we have invested in the people here and contributed to the development of the industry across sub-Saharan Africa.

We entered the DRC to consider opportunities here. In 2009 we acquired the Moto project in partnership with AngloGold Ashanti and developed it into the Kibali gold mine, one of the largest of its kind in the world.

Mining is criticized for exploitation and we have been mindful of that throughout the development of the company. People have a very legitimate demand to be involved and to benefit from the exploitation of their natural resources, because they are national assets. We were the first to have representation by the unions on our operating boards, and we do not have any investment without some government partnership. We are committed to developing the mining industry in the DRC as well as in the other African countries in which we operate. Among other things, we transfer world-class skills and technology to our local employees. We did this at Loulo-Gounkoto in Mali, and now we operate two underground mines and one opencast mine in one of the world’s largest gold mining complexes there — all run by Malians. In DRC, we will transition to a Congolese-led underground mining operation in July 2018. Our main workforce, both on the mine and in management, will always be Congolese, just as all our other mines are run by nationals of the host countries.

To what extent do you believe that mining companies have a responsibility to contribute to the development of local communities in the countries where they operate?

Community development should be a key responsibility of mining companies. We typically allocate a budget to a community-led forum that acts as a watchdog for our engagement. This CSR community management group consists of around 60 elected members, and together we decide the principles and values that will apply. A share of our revenue is given to these committees to allocate to worthwhile community development projects.
As part of this, we, in discussion with the forum, set our key priorities such as the provision of primary medical and healthcare facilities, potable water and basic infrastructure to our surrounding communities. One absolute priority which is something we insist on is the access to potable water.
We monitor all of these things using external audits and report publicly on the results, which makes us one of the most transparent mining companies in the world, fully compliant with international regulations and best practices.

What are some of the weaknesses that you have identified in the DRC’s new mining code?

There are a number of weaknesses: apart from the very fundamental point that the new code attempts to ignore the vested rights imbedded in the 2002 code, and setting this aside, the government still has the ability to change the royalties on declared strategic minerals. Another issue is the windfall tax, which has been attempted by other countries such as Zambia and Ghana with disastrous results and as a result was withdrawn. Essentially, the tax rate is determined by the commodity price when the mine starts operating, rather than by the grade of the deposits.  Mines in Katanga that were developed at different times will be affected differently: for example, if a company is mining two orebodies at the same time, but started mining one when the copper price was US$3 and the other when the price is US$2, one is penalized and will become a loss-making exercise because of the windfall tax. It is worth pointing out that in 2013, mines closed in Katanga because the copper price collapsed.

We propose that a sliding royalty system would benefit the industry and the country immensely. It has already proved beneficial in Côte d’Ivoire, Senegal and Burkina Faso. Our sliding scale proposal, given the current price, would give the government an immediate step up in revenue.

It would also be beneficial in terms of industry sustainability; under the current system, the average grade of a copper mine is the DRC is 3%, not because that is the typical grade of the resources, but because that is what you need in order to mine profitably and competitively. Increased taxes adds to this cost burden and will have the effect of raising cut-off grade even further and the consequence of this is that orebodies are effectively being high graded. What needs to happen is that the industry and the Government should rather work together to increase efficiencies and improve infrastructure and power costs so that the orebodies can be optimally exploited.

Randgold and some other leading companies have recently pulled out of FEC and started a new association. What was the reasoning behind this?
When we were engaged with the mining debate, the FEC on numerous occasions declined to support us by voicing our concerns, so these went unheard. When we were discussing the mining code with the President, the mining industry sat on one side of the table, and the government sat on the other side of the table with FEC. This presented a huge conflict of interest that we were uncomfortable with. We approached the Minister of Mines and said that we would like to represent ourselves. Our own chamber is already sizable and we are in the process of properly developing it and registering it, so we expect it to grow significantly.

As a company that has successfully engaged in pan-African activities, can you provide a final message about the potential for investment around the continent and your outlook on the future for the continent?

By 2025, more people under the age of 25 will live in the sub-Saharan region of Africa from Dakar to Dar es Salaam than in the rest of the world. This region has proximity to oceans and is endowed with the most incredible natural resources, whether its forests, minerals, or people. If these resources are not properly developed, the migration crisis the globe currently faces will continue. The African Union led by IMF is trying to force emerging counties to balance their budgets, therefore encouraging politicians to collect more tax receipts without any additional investment in their infrastructure. As a business person, if you want to develop Africa, just build a road and invest in infrastructure to connect it to the rest of the world. Add to this education and a set of fair and transparent legal and administration systems and business will do the rest.