Randgold Resources

Charles Wells, general manager of sustainability, talks about the company’s approach to sustainability and the initiatives it has in place to leave behind a positive social, environmental and economic legacy when it moves on.

Operating in the prospective gold belts of Mali, the Ivory Coast, Senegal, Burkina Faso and the Democratic Republic of Congo (DRC), Randgold Resources’ approach to sustainability is applied to all stages of a mine’s life. At the core of this approach is the company’s objective to be welcome in the communities in which it operates by not only the local inhabitants but also government bodies, NGOs and those civil and public groups that are active within the region.

As recent events across South Africa have proven, the repercussions of companies failing to work well and in harmony with the local community can be severe and widespread. “What Randgold Resources strives to do at every opportunity,” explained Charles Wells, general manager of sustainability, “is to ensure that it is making a difference on the ground.”

This statement of intent resonates throughout the company. In place are a series of formal policy documents that cover a wide spectrum of areas, from the environment and health and safety to basic human rights. Although actions are more important than words at Randgold Resources, having these policies in place means that even in the event of a change in management, the company will always be bound to the principles it holds dear.

The development of the local communities around its mines has been one of the greatest successes in the company’s history. By embracing the need for a combination of hard work, significant investment and patience, Randgold Resources can today proudly claim to be one of largest employers of local workers and local contractors and suppliers on the continent.

“While any company can fund the building of a school or clinic, the importance of which can never be understated, it takes a certain kind of business to be able to maximise employment from host communities, impart lasting skills onto workers and generate substantial business opportunities for local suppliers,” Wells said. “It is this approach to the concept of sustainability that really separates Randgold Resources from other organisations of its kind.”

The benefits connected to this approach inevitably extend to a business perspective. It helps ensure that the company forms partnerships with people that fully understand the country in which they are operating, whether in the context of local regulations or simply how local supply routes operate and converge.

The health and wellbeing of its people and of the environment are also of great importance to the company. Active malaria, HIV and AIDS programmes operate around its mines, while locally funded clinics work to track the rate of such diseases on a continuous basis. Meanwhile, the company strives to ensure each and every member of its security personnel is trained to understand and uphold international human rights principles. This has since been extended with the provision of similar training to members of the DRC police force operating around its Kibali project.

Although the areas in which Randgold Resources operates are not classed as environmentally sensitive locations, it has embraced the global drive to reduce greenhouse gas emissions as well as improve water quality and water use efficiency. Such actions not only benefit the environment, they also produce significant cost benefits for the company. With the majority of its power being derived from diesel it goes without saying that reducing consumption levels also allows it to reduce costs.

The last year has seen the company continue to bring in a consistent revenue stream from its Morila mine in Mali, while its Loulo and Gounkoto mines in the same country have witnessed strong increases in production. This has contributed to a 58 percent rise in group production volumes over the previous 12 months. It is results like these, coupled with the high price of gold, that have boosted the company’s share price.

“Even in the face of the well-publicised geo-political issues that have occurred in Mali in recent times, the company has been able to maintain its approach to business and actually build upon its past successes,” Wells said. “It is the ability to achieve such things that the market really responds to, particularly when it occurs against the backdrop of an increasingly challenging environment.”

Over in the DRC, the company’s Kibali mine is continuing to take great strides towards its target of producing gold by the end of 2013. A truly massive project in terms of both scale and future potential, Kibali, together with Randgold Resources’ other targets within Senegal, Ivory Coast and Burkina Faso, accounts for the company’s positive outlook for the immediate future.

When it comes to sustainability, the next course of action for the company involves taking the achievements it has made in recent years across Western Africa and incorporating them into its work within the DRC. “Clearly, the DRC presents a number of different challenges to those present in Mali or the Ivory Coast for example,” Wells pointed out, “therefore it is the job of Randgold Resources to adapt appropriately to the country and site specific conditions in order to guarantee the local communities around Kibali really do benefit from economic development.”

Perhaps the biggest sustainability challenge facing the company, one that if executed to plan could help bring long lasting benefits to the regions in which it operates, is the question of how it can leave behind a legacy that delivers economic stimulus. While it recognises it would be near enough impossible to replicate what its mines contribute economically, moves have been made to establish an agricultural business programme within the various operations.

At this point in time those efforts are centred on the Morila mine, which is nearing the end of its life. “A great deal of infrastructure exists in place at Morila, a part of the world that has a long history of successful farming land readily accessible to the communities and, due to the mine, now has water and power available,” Wells said. “Rather than simply leaving behind a subsistence farming community, Randgold Resources wants to take that to the next level and help agricultural businesses prosper.”

These plans are also now being developed so as to allow them to be implemented around the company’s other assets when they reach the end of their own lives. “The goal at the end of the day is to ensure that the company is able to leave a positive mark on the places in which it does business by making sure a considerable level of economic activity and employment continues to provide for local communities even after it leaves,” Wells concluded. “It is the ability to leave behind that sort of legacy that represents sustainability in its truest form.”

www.randgoldresources.com

Written by Will Daynes, research by Robert Hodgson and Jeff Abbott