By Dineo Phoshoko
Resolute Mining owns three gold mines in Africa – Syama (Mali), Mako (Senegal) and Bibiani (Ghana) – with a global mineral resource base of more than 13 million ounces. In addition, Resolute is involved in mine exploration and development projects. Inside Mining interviews John Welborn, managing director and CEO of Resolute Mining.
All photos by Resolute Mining
What makes mining in Africa different compared to the rest of the world?
JW The first thing that makes Africa unique is its massive endowment of geological potential, whether it is gold or iron ore, bauxite or tantalum, or any other commodity. A lot of Africa is largely unexplored by modern miners, which is exciting. Africa represents a relatively new frontier for mining.
What is the most challenging aspect about operating in Africa?
Resolute has been mining in Africa for over 20 years. The challenging aspect for miners in Africa is understanding the cultures and environment in which you operate. With African stakeholders, government and local communities being the obvious ones, recognising differences in mining practices between jurisdictions is important.
How has Resolute dealt with such challenges?
Resolute first entered Ghana in the late 1990s. The company has therefore had 20 years to take its training wheels off. Resolute continues to develop its ability to operate in Africa through experience and relationships. The fundamental relationships are with the host governments, the local communities and, importantly, our workforce. Increasingly, I see an area of opportunity – and an advantage for Resolute – being the ability to train and employ a largely African workforce on African gold mines.
What impact do you think the African Continental Free Trade Agreement would have on mining companies operating in Africa?
It will have a positive effect, particularly on the bulk miners. There is an opportunity to make the free trade agreement advantageous for African countries and the African people, as well as international mining companies.
For us, free trade is significant in terms of our supply line for the importation of reagents and fuel, but also skills transfer. I have mentioned training workers previously. The ability to move skilled workers around Africa more easily would be an advantage for miners as well as the trade and the community. Gold is an international market. We create a currency, but for the miners of other commodities, I think the African countries can become potential customers of the end product. This will also be significant for an African free trade agreement.
Resolute’s headquarters are in Australia. Almost all of Australia’s mining products go offshore. The early stages of mining in Africa has been similar in terms of exporting resources and sending those to more developed countries. It would be great to see a free trade agreement with a longer-term horizon, creating potential for African markets to establish themselves for commodities.
From Resolute’s perspective, we would love to move equipment and invest in the development of gold mines in a more competitive environment, so that we are not suffering tariffs and import duties. That would increase our appetite for investment.
In terms of its operations, what is Resolute Mining doing well and what could you improve on?
Resolute has learned how to manage Africa’s volatility in terms of supply lines and relationships. The area we could improve in – and have already committed to do so – is training more national workers. We still rely on expatriate management and the importation of mining skills. The next stage of African mining development is to use more local skills and provide additional training opportunities.
What would you say is the biggest lesson Resolute has learnt throughout the years operating in Africa?
Resolute is still learning lessons. I think the biggest lessons learned are patience and perseverance. I am a huge believer in the potential of Africa, but it does require commitment. Mining is a long-term commitment. The idea that you are going be able to come into new jurisdictions and exploit resources quickly for immediate benefit is, first, naive and, second, does not reward all the stakeholders. An important aspect of the successful development of African mining is to have a long-term view and be patient.
How have the mining ministries dealt with Covid-19 and what impact has this had on Resolute’s operations in the respective African countries?
Resolute’s mines are in relatively remote areas, with the exception of the Bibiani Gold Mine in Ghana. The Mako Gold Mine is located in eastern Senegal and the Syama Gold Mine in the south of Mali – both have relatively remote communities. We are working closely with local mayors and the governors of those regions.
From a national level, it is the opposite of what has happened here in Australia, where the Australian government has been providing a lot of financial benefits to companies to maintain employment. In Senegal, Mali and Ghana, Resolute has provided financial assistance to the mining industry.
Furthermore, the company has provided medical equipment to the governments to support their response to Covid-19. Resolute has also respected the restrictions that have been imposed, which, fortunately at this stage, have not negatively impacted the business.
Resolute is also not transferring its expatriate workers to and from site anymore. The company has closed down some areas of risk to keep its people safe, but also to respond to government restrictions and programmes. Resolute prepared itself early for a crisis and a potential steepening of the curve.
At this stage, the company has not been directly impacted by the virus in Senegal, Mali and Ghana. None of its workers have become sick and it is not apparent that there is any particular cluster of cases within the communities in which we operate. The company’s response has been to adopt protocols, to distribute equipment, to financially support the local community and the national government where we operate, and to prepare for when the virus gets worse. But at this stage, it has been able to keep its operations running.
Where do you see Resolute’s African operations in the near future?
Our strategy is to be a multi-mine, low-cost African gold producer. We currently have two operating mines, being Syama and Mako. Resolute’s ambition over the next few years is to continue to improve these operations and use that success to develop new gold mines.
The most exciting thing about being a gold miner in Africa is the opportunity to discover and/or acquire new ounces and build mines. That is where the biggest benefit comes to our shareholders, but it is also the biggest benefit for the host government and the employment opportunities to the local communities. I would like to see continued improvement from our operations and the opportunity to build new gold mines on the African continent.
Is there anything you would like to add?
I am pleased, although slightly apprehensive, that we have not seen Covid-19 spikes in the parts of Africa in which we operate. I am hopeful that the mining industry, in particular Resolute, can be part of a solution by providing employment, keeping people safe and providing PPE and financial support where required. I remain incredibly excited about the opportunity that mining has in Africa to provide economic progress.