Upheaval in Tanzania, where the government has made huge tax demands and seized minerals, has triggered changes in neighbouring Kenya, which should reassure the industry, said Gerard Kisbey-Green, CEO, Goldplat, which operates a gold mine there.
Kisbey-Green said he was seeking to diversify his portfolio to cover more African nations and to expand into platinum group metals as he strives to offset African risk.
According to the CEO, the mining industry has reeled from South Africa’s proposed new mining charter and changes happening in Tanzania, where the government is locked in a tax dispute with Barrick Gold subsidiary Acacia.
Kisbey-Green said the impact of the Tanzanian actions in Kenya was “a positive contagion effect” as the mining ministry has requested the opportunity to inspect and has offered to assay each bar of bullion exported.
“It means our gold exports take a day longer, but I would rather that than have the government turn round and say we have been stealing their gold,” he said.
The Kenyan Mining Ministry was not immediately available for comment.
Concerns about political instability are also high in Kenya after elections in August were nullified and a re-run is scheduled for October.
Kisbey-Green said he thought the only disruption to Goldplat’s Kenyan mine would be two days lost production as workers went to vote.
Killmapesa in Kenya is Goldplat’s only producing mine. The rest of its output is from extracting gold from mine waste in South Africa and Ghana.
One option to reduce political risk is to register the company in South Africa as, for instance, a factory rather than a resources company, given that it processes mining waste rather than mines in South Africa. That would shelter it from the mining charter.
Goldplat is also seeking to spread risk by diversifying geographically and to expand across the platinum group of metals as the South African gold sector is very mature.
“You should not have over-exposure to one country in Africa or in any emerging markets,” Kisbey-Green said.
The aim over around three years is to increase output across a spread of jurisdictions by around 25% from recovery operations to roughly 50 000 ounces per year and to increase mining productivity from around 5 000 ounces annually to 50 000 ounces through development and acquisitions.