Congo blocks Barrick takeover of Kibali mine

Google+ Pinterest LinkedIn Tumblr +

The government of the Democratic Republic of Congo is insisting that Randgold Resources Limited authorise Canada’s Barrick Gold Corp’s acquisition of Randgold’s stake in a Congolese gold mine. With an aggregate market valuation of $18.3 billion, Barrick agreed to buy Randgold in a deal to create the world’s largest gold company.

Although the take over will make Barrick the owner of Randgold’s 45 percent stake in the Kibali mine in Congo, Martin Kabwelulu, the Congolese Mines Minister said the shareholder change will need to be approved by the government in accordance with Congo’s new mining code.

The ministry’s stance backs the position taken by state miner Sokimo, which owns 10 percent stake in the mine. Sokimo said the transaction represents an effort by foreign companies “to impulse themselves, without any prior discussion, in the countries from which the resources that make up their wealth are extracted”.

Randgold noted that the takeover would not introduce a new partner in the Kibali project, as suggested by Sokimo. A statement from the company said “there are no provisions in the joint venture agreement and the related documentation which give Sokimo any rights resulting from the proposed merger”.

Randgold, which has a stake in several projects in Congo, including the Kibali mine, said it had consulted with Sokimo, the minister of mines and other parties, in the days following the merger announcement. The company has however fallen out with the Congolese authorities this year over the new mining code that hikes taxes and cancels exemptions.


About Author

Leave A Reply