Government/industry partnership key to deriving lasting value

Governments and mining
companies in Africa must
come together and work
as one if they want to
avoid the catastrophe of an
unpredictable market.
According to Mark
Bristow, CEO of Randgold,
the inability of stakeholders
to predict the cyclical nature
of commodity prices remains
one of the biggest challenges
on a continent that is highly
dependent on mining.
“Commodity prices over
the past 20 years are proof
that we require long-term
planning, but the market
demand for short-term
gains makes it very difficult
to do,” he said. “No one
saw the super cycle of
commodity prices coming
and unfortunately no one
saw it ending either. The
finest opportunity for value
creation was squandered. Not
just by miners but also by our
host country governments.”
He said with mining
houses still trying to come to
terms with damaged balance
sheets, governments needed
to contend with the impact of
it all on their economies and
supply chains.
“There is a complete
inability to predict the
cyclical nature of it all,” said
Bristow, adding that both
mining
companies
and
governments
were happy
enough to
reap the
benefits
during the
good times.
“There is
a need for a
constructive government/
industry partnership,
not one where one is
mimicking the myopic
behaviour of the other.”
This he said was
ultimately the only way to
derive lasting value from
mining for countries and
companies alike.
Bristow said mining held
the key to Africa’s success
but unlocking the continent’s
wealth required a combined
approach. “While Africa is
still the place to go for gold
resources, investors retreat
to safer
hunting
grounds
due to
restrictive
mining
codes and
political
instability.”
He said
working
together new
mines could be built
across the continent,
demonstrating to investors
that Africa was the place
to be.