Sweeping changes to the mining code in the Democratic Republic of Congo (DRC) could cost the country dearly. According to Mark Bristow, CEO of Randgold Resources, the new code has been illadvised and will have serious consequences for mining in the country. Still awaiting promulgation by the DRC president, the code revokes a ten-year stability clause that guarantees legal certainty for existing investors. Randgold Resources, a joint shareholder of the Kibali gold mine in the DRC with AngloGold Ashanti, already saw profit at Kibali fall in 2017. “The DRC is introducing a draconian mining code,” he said. “The old code saw 65% of revenues after capital redemption going to the state. The new code results in 100%. It is a strange logic to think that people will invest in a country to get no returns.” Bristow said the DRC had had clear legislation and policy that allowed the company to invest $2.5 billion in its operations without asking any questions as it was able to operate with stability. “The DRC comes from a very dynamic past and in reshaping its economy settled on a code in 2002 that was by far the best in Africa as it was written with a lot of expertise and deliberation and it had a good set of regulations to it – albeit more aggressive than many other codes on the continent.” He said the new codes, however, were going to impact significantly on mining investment in the DRC as they were a real threat to stability. “You can’t expect us to continue to invest in a country that doesn’t respect its own laws,” he said. The company has said it will seek international arbitration if the code is put into effect. “This is the first time in Africa where we have seen the entire spectrum of global investors impacted by a political development and it is a unified front because included in those investors are some of the biggest mining houses from the western world and Africa,” he said. “We need to find a way with the DRC to plot a route that benefits everyone. Ultimately that has to happen otherwise the money leaves and the conflict continues. No doubt we will find a solution, but the question is, do we have to go through a lot of anguish and crisis before we reach a solution or do we sit down like grown-ups and talk about it amicably.”
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It is a strange logic to think that people will invest in a country to get no returns. – Mark Bristow
