Randgold Resources Ltd is currently facing opposition from the Democratic Republic of Congo’s government. DRC is insisting that it authorizes the acquisition by Canada’s Barrick Gold Corp of Randgold’s stake in a Congolese gold mine.
According to media reports, Barrick agreed to buy Randgold this week in a deal to create the world’s largest gold company with an aggregate market valuation of US $18.3Bn. This will result in Barrick becoming the owner of Randgold’s 45% stake in the Kibali mine in Congo. However, Congolese Mines Minister Martin Kabwelulu said the shareholder change would need to be approved by the government in accordance with Congo’s new mining code.
The ministry’s statement backs the position taken by state miner Sokimo, which owns a 10 % stake in the mine and vowed to “assert its rights” regarding the takeover. AngloGold Ashanti owns the remaining percentage stake in the project.
According to Sokimo, the transaction is but an effort by the foreign companies to impose themselves, without any prior discussion, in the countries from which the resources that make up their wealth are extracted. On the other hand, Randgold assured parties concerned that the takeover would not introduce a new partner in the Kibali project, as suggested by Sokimo.
Rangold released a statement clarifying that there is a lack of provisions in the joint venture agreement together with the related documentation which give Sokimo any rights resulting from the proposed merger.
Randgold has allegedly fallen out with the Congolese authorities this year over the new mining code that hikes taxes and cancels exemptions. The firm said it had consulted with Sokimo, the minister of mines and other parties, in the days following the merger announcement. Congo has earned hundreds of millions of dollars in payouts from international miners in similar instances in the past few years.