BMI lowers DRC gold production outlook

JOHANNESBURG (miningweekly.com) – Lower-than-expected output from the Democratic Republic of Congo’s (DRC's) gold industry during 2016, paired with a weak project pipeline in the coming years, has resulted in research firm BMI revising its gold production forecast for the country up to 2021, downwards.

The research firm put the lower production down to operational difficulties at Randgold Resources’ Kibali mine, which would mean that the country's gold sector would have to grow from a lower base, curtailing absolute production levels in the years to come.

Gold production in the country dropped by 12.2%, from 910 000 oz in 2015, to 798 000 oz in 2016, mainly as a result of a 9% year-on-year decline in output at Kibali, following operational challenges related to dealing with different ore types and the ongoing construction of an underground mine.

As such, BMI now expects the DRC’s gold output to reach 1.25-million ounces by 2021, as opposed to the 1.9-million ounces previously forecast.

Further, the lack of gold projects coming on line in the next five years warrants a revision to the country's average production growth rate from 21% to 10.6% in that same period.

There are only two new gold projects in exploration or feasibility stage in the country, Armadale's Mpokoto and ASA Resources' Zani-Kodo. Of these, Mpokoto with an estimated production capacity of 25 000 oz/y is more likely to start production in the coming months, following a joint venture between Armadale and Kisenge Mining in December, with the aim of arranging funding needed for production.

Nonetheless, the country would remain the fastest-growing gold producer in sub-Saharan Africa over 2017 to 2021, BMI stated. It noted that this would further be boosted by rising gold prices, a favourable investment environment and expansion plans at the country's current gold operations.