Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Aug 1 (Reuters) – Mali’s government has granted Randgold Resources a 50 percent corporate tax reduction for the next four years at its Gounkoto mine, the Africa-focused gold miner said on Wednesday.
The tax concession is to support the development of a “super pit” which will be one of the largest opencast gold mines in Africa, the company said in a statement.
This comes weeks after a workers’ strike at its Tongon gold mine in the Ivory Coast brought production following a breakdown of government-led negotiations, triggering a 24 percent fall in first-quarter profit.
Two of Randgold’s gold mines in neighbouring Mali, Loulo and Gounkoto, have also been hit by strikes this year and a long-running dispute with the government over a claim in back-taxes.
In June, rioters in southern Mali ransacked local government buildings following a dispute between workers and management at Randgold’s Loulo and Gounkoto gold mines, while in April workers went on strike there over bonus payments, though the stand-off was resolved within a day.
The Loulo and Gounkoto mines are located in Mali’s gold-rich south, far from the unrest caused by Islamist insurgents in the north. They produced more than 20 tonnes of gold last year.
The tax concession will see Gounkoto mine’s life extended by more than five years, the Randgold Resources statement said.
Mali is Africa’s third-largest gold producer, behind South Africa and Ghana.
Randgold, which has operations in Mali, Senegal, Ivory Coast and the Democratic Republic of Congo, said in May it would meet its full-year production targets despite the labour stoppages.
Shares of Randgold Resources closed down 2.2 percent on Wednesday.
(By Justin George Varghese; Editing by Mark Heinrich)
