Kibali Gold on track to reach 610 000 ounce 2017 production target

by Ina King (Potgieter)

Management at the Kibali gold mine in the Democratic Republic of Congo, in mid-October 2017, announced that the mine's underground operations and the integration and automation of the vertical shaft were about to begin final commissioning and automation stages. This means that the mine remains on track to achieve its production target of 610 000 ounces in 2017.

An upbeat Randgold Resources Chief Executive, Mark Bristow, commented that "the mine is anticipating a significant increase in production once the final shaft commissioning has been complete." Shaft commissioning, at the time of writing, remains on a tight schedule.

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The only major capital project still in the works, following the anticipated completion of the underground mine in the fourth quarter, is Kibali's third new hydropower station, which is in the process of being constructed by an all-Congolese contracting team. "The availability of self-generated hydropower and the mine's high degree of mechanisation and automation are important factors in Kibali's ability to sustain profitability throughout the ups and downs of the gold price cycle," says Bristow.

Over $2 billion has been spent on acquiring and developing Kibali, the majority paid out in the form of taxes, permits, infrastructure and payments to local contractors and suppliers. Bristow says that with capital expenditure tapering off, Kibali should be preparing to pay back loans taken to fund its development.

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There are, however, two "troubling” developments. The company is concerned that its ability to repay loads will be impeded by the “increasing amount of debt", currently over $200 million, owed to the mine by the DRC government, is one. The other is the reintroduction of a proposed new mining code, which is identical to one the government withdrew in 2015 as it was demonstrated that the code would seriously damage or even destroy the Congolese mining industry.

"Despite all the challenges, including the volatile political climate and a deteriorating economy, we continue to invest here," Bristow points out. "Our exploration teams are searching for our next big discovery in the greenstone belt of the north-eastern DRC. The DRC has all the materials for building a sustainable mining industry but that will require a fully committed partnership between the government and the mining companies."

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Mining projects in the DRC that are listed on Mining IQ's database currently profiles 91projects. Minerals mined in these projects include 48 copper, 7 diamond, 19 gold, 13 industrial, 1 nickel, 1 lithium, 1 nickel, 1 potash, 1 tin and 1 zinc.

The Kibali gold mine, and its associated mining permits, is owned by Kibali Goldmines SA (Kibali), a joint venture company between Randgold (45%), AngloGold Ashanti Limited (AngloGold Ashanti) (45%) and Société Minière de Kilo-Moto (SOKIMO) (10%). The mine was developed and is operated by Randgold.