Tags: Miners | Operations | Mali | gold

Miners: Operations in Mali Running Normally Despite Unrest

Thursday, 22 March 2012 10:48 AM

Gold miner Randgold Resources said its operations in Mali, which account for roughly two-thirds of its production, are running normally, despite worries over unrest as renegade soldiers say they have seized power in the West African country.

The soldiers earlier went on state television to declare they had seized power in protest over the government's failure to quell a rebellion in the north of the country.

Concern over Randgold's Loulo, Gounkoto operations and its joint venture Morila weighed on the miner's shares on Thursday, trading down 12 percent to 5,810 pence at around 1240 GMT. But both Randgold and other miners in the country state that their operations in Mali are running normally right now.

Chief Executive Mark Bristow, who is at the company's Loulo complex some 350 km from the capital Bamako, said exact details were unclear but the situation at the flagship mine was calm.

"Malians respect laws and I don't believe this will come with a high-handed change in political direction," he said in a statement, adding the company was monitoring the situation.

"We don't expect any subsequent governments to disregard proper and due process."

Analysts said Randgold, which also operates in Ivory Coast, Senegal and the Democratic Republic of Congo, had experience in dealing with unrest, but said the lack of clarity would hit shares.

"(The) uncertainty will be negative for the share price as Randgold's Malian operations represent 43 percent of the group net present value and 65-70 percent of group production in 2012," Collins Stewart said in a morning note.


Other miners with significant operations or exploration projects in Mali include Iamgold, Avion Gold and Cluff Gold — with the latter down 4.9 percent — while AngloGold and Gold Fields are also working in the country.

Iamgold and AngloGold, which jointly own the Sadiola and Yatela gold mines in the country, said their operations in the country have not been impacted by the current political turmoil.

"We continue to monitor the situation closely," said Bob Tait, Iamgold's head of investor relations.

Iamgold's New York-listed shares were down 2.2 percent in trade before the morning bell. Shares of AngloGold, which also owns a part of the Morila mine in Mali, were also down slightly in trading in Johannesburg.

Mali is one of the most significant gold producers in Africa, alongside Ghana and South Africa, and gold is one of the country's top exports.

In a note to clients, Citi analyst Jon Bergtheil said Mali has been a fairly stable country and so the political situation there could well settle back into 'business normality' in a few months.

Avion, a small Canadian gold miner that currently produces all of its gold from within Mali, said its operations are also still functioning normally.

"The mine at Tabakoto is running as usual. Our people are safe at site and secure," said Chief Executive John Begeman. "We are still gathering as much information as possible."

© 2018 Thomson/Reuters. All rights reserved.

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Thursday, 22 March 2012 10:48 AM
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