CAPE TOWN (miningweekly.com) – Although the gold mining industry has largely weathered the post supercycle storm and is no longer in survival mode, the industry still remains in a kind of limbo, says Randgold Resources CE Mark Bristow.
Speaking at a presentation of the company’s 2017 results, on the sidelines of the Investing in African Mining Indaba, in Cape Town, Bristow reiterated that the industry has “no clear sense of direction and seemlngly little appetite for the kind of reinvention” which he believes is necessary and which has been witnessed, to some extent, in the oil and gas and base metals sectors.
“Instead of long-term planning for value creation, companies are now fiddling with joint ventures and partnerships, which amount to little but the rearrangement of existing assets,” he said, adding that there has been an emergence of single asset ventures, which are not large enough to grow organically or to attract significant investment.
Further, while mining companies may have come to terms with the realities of the post supercycle market, some key stakeholders have not rebased their own expectations and, in Africa, some countries are actively seeking to extract more revenue from the industry to the extent that they risk discouraging reinvestment, let alone new investment, Bristow said.
Further, he suggested that the industry was in a precarious position, noting that while ounces mined were replaced, it was not done with the same quality or grade and the industry is now “over the tip on the peak production”.
According to Bristow, the industry, therefore, requires a focus and reorganisation of assets.
“It would be more constructive if investors stop crying about CEO pay and focused on assets, delivery, proper accountability and . . . getting the right assets with the right management,” he suggested.
Bristow further challenged investors “to worry about the assets and to vote for change, rather than trying to eke out a premium on another transaction”.