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COMMENT
October 2015
MODERN MINING
3
T
he mining industry tends to be
over-weight in senior executives
who carefully weigh every word
they say and who very rarely en-
gage in straight talk – which is why
it is so refreshing to listen to Mark Bristow, the
dynamic (an over-used word but correctly ap-
plied in his case) CEO of Randgold Resources.
Once a year he hosts a media lunch in Johan-
nesburg and at this year’s event he was in his
usual top form, throwing out one quotable
quote after another with a cheerful disregard
for the conventions that normally govern dis-
cussions between members of the media and
the mining industry’s top management.
Not surprisingly, he painted a grim picture
of the gold mining industry. He pointed out that
when he created Randgold back in 1995, South
Africa was still the world’s top gold producer,
producing nearly a quarter of global output,
whereas today it ranked a lowly seventh and
was responsible for just 5 % of world produc-
tion. He said gold mining generally, and not
just in South Africa, was in a bad state and in
need of major restructuring. “It will not look
the same in two years’ time as it does today,” he
predicted. “It’s definitely an industry that has
to have something done to it.”
He noted that collectively the world’s top
gold producers had not increased production
over the past ten years despite raising US$150
billion in debt and equity, which – as he put it
– was a huge investment to make just to tread
water.
Randgold – which reported record gold pro-
duction in the second (June) quarter of this
year – was one of the few exceptions to global
trends in gold mining, he said. The group was
debt free, had never in its history reported a
single impairment and was continuing to invest
heavily in exploration – to the tune of US$50
million a year – at a time when most explora-
tion budgets were being slashed.
On the outlook for resources generally,
Bristow said commodity prices were unlikely
to recover to the levels seen during the ‘super-
cycle’ boom. “We’re not going to get back to
where we’ve come from,” he said, adding that
oil storage facilities around the world were full
while China had enough iron ore stockpiled to
last six years.
On the subject of social responsibility, he
claimed that most mining companies had no
‘social licence’ to mine. He said that obtaining
such a licence involved more than just upgrad-
ing the local clinic and was a task that had
to be worked on continuously. He noted that
Randgold in Mali, apart from all its commu-
nity initiatives, had contributed over a billion
dollars to the Malian treasury over the years
and that its operations currently accounted for
12 % of the country’s GDP. “Our taxes pay the
salaries of all the country’s civil servants,” he
stated.
Perhaps Bristow’s most interesting com-
ments were on Obuasi in Ghana and Randgold’s
planned collaboration with AngloGold Ashanti
to revive the more-than-100-year-old mine,
which over the past ten years has consumed
around US$1 billion in new investment with
little to show for it. Operations at Obuasi are
currently curtailed – the only production is
from tailings processing – while its future is
being determined.
Bristow didn’t mince his words about the
state of Obuasi, saying it had no social licence
to mine, was in conflict with virtually every-
one and was hampered by a range of legacy
problems. He stressed, however, that it had
significant reserves (probably far more than
had been declared). “The question is whether
we can convert this world-class orebody into a
world-class mine,” he said.
In terms of its agreement with AngloGold
Ashanti, Randgold has till the end of January
next year to come up with a realistic, viable
plan to convert the mine into a modern mecha-
nised operation. Bristow said Randgold had
made a start on this task, having just transferred
the team that had worked on the Kibali under-
ground mine in the DRC to the Obuasi site.
I can’t help thinking that the revival of
Obuasi will be the biggest test ever for Bristow.
Even for a man with his abilities, the mine
presents a huge challenge, as it has steadfastly
defied the efforts of a succession of managers
to get it right.
Randgold has a proven success record
with underground mining, with its opera-
tions in Mali (and now Kibali as well) ranking
as amongst the most efficient in Africa. But
these are new mines, designed from the start
for mechanisation. Can the same methods be
‘retrofitted’ to the maze of underground work-
ings at Obuasi, which extend down to about a
kilometre-and-a-half below surface? Certainly,
if Randgold can chart a new course for Obuasi
– and successfully implement it – then it would
rank as a stunning achievement and confirm
Bristow’s reputation as one of the world’s sav-
viest gold miners.
Arthur Tassell
Bristow noted
that collectively
the world’s top
gold producers
had not increased
production over
the past ten years
despite raising
US$150 billion in
debt and equity,
which – as he put
it – was a huge
investment to
make just to tread
water.
Straight talking on mining
by Randgold’s Mark Bristow