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Randgold cuts FY'18 production forecast for Tongon, eyes restart by mid-August

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Randgold cuts FY'18 production forecast for Tongon, eyes restart by mid-August

Randgold Resources Ltd. expects to resume operations at the Tongon gold mine in Cote d'Ivoire by mid-August, the Financial Times reported Aug. 9, citing CEO Mark Bristow.

The company was forced to halt Tongon earlier in July due to a workers' strike at the site. Randgold recently said it was engaging with the government to resolve the situation.

Bristow said the company started rehiring Tongon's workers and is focusing on the mine's restart. "We will be up and running, full tilt, by the middle of the month," Bristow said. "We'd like to do it quicker but it's a process."

In April, management and the workers agreed to a negotiation period to address industrial relations issues. However, the unions made new demands in mid-July that were outside the existing multiparty agreement as well as Ivorian labor law, and halted the mine's operations after abandoning talks.

The executive said the company should have shuttered the mine in April, but the government persuaded it to continue discussions.

"They wanted a seven month bonus, every year, guaranteed. We said we can't afford that. It's not going to happen," the executive said.

Randgold lowered Tongon's 2018 production forecast to 250,000 ounces from 290,000 ounces of gold projected earlier. Consolidated production, meanwhile, is expected to range between 1.30 million and 1.35 million ounces of gold.

"We are still assessing its impact but at this stage we still believe that, given Kibali's strong performance, we are on track to be within the group production and cost guidance for 2018," the CEO said in the same-day financial results.

The company's attributable profit in the second-quarter dropped to US$52 million, from US$84 million a year ago.

Additionally, Bristow said mining companies operating in the Democratic Republic of the Congo would eventually reach an agreement on the country's new mining code.

The miners have reservations over the new DRC mining laws, which would lead to higher taxes and royalty payments.

"There's one country [in Africa] where you get a commercial decision more than often not: the DRC," he said. "They take us seriously when we say we will take them to international arbitration. They don't need that in their lives. We make a massive contribution to that economy."