No-one likes a large tax bill, especially in arrears.
London-listed Randgold and Mali’s government are heading for international arbitration at the International Center for Settlement of Investment Disputes over a disagreement over around $60m in tax connected to Randgold’s Loulo gold mine.
Randgold chief executive Mark Bristow has criticised a “disturbing” tendency among African governments to increase taxes and regulations on mining investors, as the company disputes its tax bill with the Malian government.
The chief executive of the FTSE 100 gold mining company, which has operations in Mali, the Democratic Republic of Congo and Ivory Coast made his statement at the Mining Indaba conference currently taking place in Cape Town. He claimed that revisions to mining laws risked deterring investment on the continent.
Crisis? What crisis? African gold miner Randgold Resources shrugged off concerns over the political situation following the coup in Mali in March as it delivered first-quarter profits which more than doubled that achieved in the same period last year.
However profits slipped when compared with the previous quarter as production fell to 165,000 ounces in the three months to March – lower than the quarter to December but in line with previous guidance which is expected to see annual production increase from to between 825,000 and 865,000 ounces this year. Randgold produced 696,000 ounces of gold in 2011 and trebled profits.
Investors don’t like uncertainty – and it doesn’t come much bigger than a military coup. After soldiers in Mali staged a mutiny in the capital, cutting off state media broadcasts and firing on the presidential palace, London-listed miner Randgold has seen a big fall in its share price.
The miner was off 17 per cent at one point on Thursday – at time of writing it is down 10.08 per cent. The company reported normal operations, but that hasn’t stopped investors taking fright.