Randgold CEO says Ivory Coast power cuts boost Tongon costs

ABIDJAN (Reuters) - Persistent power cuts in Ivory Coast over the past several months has adversely affected operational costs and output of Randgold Resources' Tongon mine, Chief Executive Mark Bristow said. Ivory Coast, the world's biggest cocoa producer and the West Africa region's biggest economy, like many countries in the region, is struggling to meet skyrocketing electricity demand to power its expanding post-war economy. Bristow told a news conference in Abidjan on Saturday that power supply to the mine had suffered difficulties since April. Randgold is the second-biggest power consumer in Ivory Coast after the national refinery. "The load-shedding was done in a brutal manner and without forewarning. This has had a negative impact on production cost and output," he said. Bristow said that because of the power cuts, operation costs had risen to 16 cents per kilowatt-hour (kWh) from 6 cents. However, he said Randgold remained optimistic over its operations in Ivory Coast because the government had launched several projects to improve power supply. Randgold owns 89 percent of Tongon while the Ivorian government has a 10 percent stake and a local company owns 1 percent. Bristow said he was expecting a significant discovery from another permit after a spell of explorations. "We have high hopes with regards to our Boundiali permit. Initial exploration results are giving us high hopes. We will wait for the end of the rainy season to have more detailed results," he said. Tongon consists of two open pit mines which are projected to produce gold for seven years. However, exploration is continuing aimed at adding to current reserves and extending the life of the mine. The mine missed its 2014 production target of 250,000 ounces by 10 percent. Bristow said in February that the 2015 target for the mine was at 260,000 ounces.