EDITORIAL: Corporate SA’s indiscriminate offshore expansion coming back to bite it
SA executives can learn a thing or two from Mark Bristow, the straight-talking CEO of Barrick Gold, when it comes to growth and acquisitions. Bristow, who made his name and fortune with Randgold Resources, famously never had to impair assets or go begging for more shareholder cash when the gold price took a deep and sustained dip after reaching record highs in 2011. This despite the company's major competitors being forced to write off billions of dollars in asset values and raising billions more from shareholders to pay off some of the debt they used to expand their operations at a time when prices only knew one way: up. Randgold Resources, which built hugely profitable mines in difficult jurisdictions like Mali and the Democratic Republic of Congo (DRC), made investment decisions based on three basic principles. The quality of the asset had to be world class; management had to be excellent; and they wouldn’t just expand the business for the sake of growing. Or, in Bristow’s langua...
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