Against strong competition, 2017 must rank as one of the best years in Randgold’s history of achievement and delivery. All the operations performed well to achieve another annual production record off an already high base, and to prune the cost of that production to its lowest level in six years.
With profit for the year up 14%, cash and cash equivalents rising to $720 million, and the company’s robust 10-year business plan firmly in place, the board was able to recommend a doubling of the dividend to shareholders. It is worth noting that Randgold has increased its dividend every year since it paid the first one in respect of the 2006 financial year, tangible proof of the sustainable success of the company’s long term value creation strategy.
The operational highlight of the year was the effective completion of Kibali’s eight- year development programme. This is now unquestionably one of the world’s greatest gold mines, not only in terms of size and longevity but also for a level of technological innovation unique in Africa.
It was noted with some concern that the full commissioning of Kibali coincided with the decision by the Democratic Republic of Congo (DRC), its host country, to introduce a new mining code which could negatively impact not only the industry but also the Congolese economy. Randgold and the other major mining companies in the DRC are continuing to engage with the government in an effort to find a constructive and amicable revision to a code that has not addressed the real issues associated with the country’s failure to unlock its potential mineral wealth.
There is a real need for the industry and host countries to work harder at ensuring open and transparent dialogue between all stakeholders. Otherwise the substantial advances achieved by a partnership between state and industry since the mid-Nineties are in danger of being reversed. It is worth noting that, despite Africa’s enormous mineral wealth, in 2016 only 14% of global exploration funds was allocated to this continent, versus 28% for North America and 30% for South America.