Gold miners shrug off risks of Mali disruptions


  • World
  • Wednesday, 04 Apr 2012

JOHANNESBURG (Reuters) - Gold companies with mines in Mali are playing down the risk of border closures and fallout from sanctions imposed on the West African nation after a coup last month.

Randgold Resources, Mali's largest investor, and Africa's largest gold producer, AngloGold Ashanti, said on Wednesday it had enough supplies of fuel to sit out any immediate changes in the way it does business.

"There is no revolution and there is no conflict so there is no threat to life or limb," Randgold Resources Chief Executive Mark Bristow told Reuters.

Bristow said the company, which sources two-thirds of its gold from Mali, had no problem bringing in fuel and shipping gold despite border closures by the 15-state Economic Community of West African States designed to squeeze Mali's economy.

"Those sanctions haven't all been applied yet. They are being applied, I believe, but we are still shipping fuel and goods through some of the borders," Bristow said.

Randgold had 440,000 litres of diesel delivered on Tuesday night, giving its Loulo complex about 12 days' supply and its Morila mine around 14 days of fuel.

The company's London-listed shares have dropped 20 percent since soldiers seized power in Mali on March 22, suggesting that investors are worried over the potential risk of disruption as a result of the political situation.

Morila, a joint venture with AngloGold, is 280 km (170 miles) southeast of Bamako, and Loulo sits in the west of Mali, bordering Senegal, 350 kilometres west of Bamako.

Besides Morila, AngloGold is a joint venture partner with Canadian gold producer IAMGold in two other mines in Mali - Sadiola and Yatela.

The Malian government holds up to 20 percent in all of these mines.

AngloGold, whose Malian operations make up just 4 percent of its annual production, said it too had "sufficient supplies to continue operations in the near term."

"I'm an optimist and we have navigated these sorts of things in other countries in the past, there is no reason why we should not be able to navigate this - but we are watching very closely," Anglogold Chief Executive Mark Cutifani said.

Angolgold shares have lost 5.6 percent since the coup, roughly in line with the Johannesburg Stock Exchange's gold index.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

Across The Star Online