Randgold share price: sees drop following announcement of new Mining Body

Randgold (LON:RNS) has dropped in the Footsie today amid the arrival of new mining body.

Randgold share price: sees drop following announcement of new Mining Body

The gains experienced by the mining sector earlier this week are slowing dropping for Randgold following today’s announcement that a new mining body has been introduced and will be overseeing mining code improvements in the democratic Republic of Congo.

The Mining Promotion Initiative (MPI) has a main goal of ensuring the application of the new 2018 Mining Code, which could potentially compromise some individual investors. General Secretary of the MPI stated: “This code compromises those investors who have invested in the country individually and alongside state companies”.

Future concerns result in Investor hesitancy

The announcement is already causing small ripples of concern amongst today’s investors as Rangold share prices drop in the FTSE 100 index by 0.28% and currently stands at 5,052.00 GBX −14.00 and hugely contracts with the sector’s success earlier this week as mining sector stocks boosted the FTSE 100 and left behind a four-month low.

Recovery Plan potentially compromised

The company’s move to underground mining in Kibali earlier this year has proved to be a great success in terms of a recovery plan, boosting its second quarter output by 17 per cent, whilst also reducing its per ounce total cash costs - a fact that was not missed by investors.

Uncertainty in consensus status

The companies consensus status (previously at unanimous ‘hold’) has now been moved to ‘buy’ by only ten of the thirteen research analysts currently monitoring the stock.

To the Future

It remains to be seen if the new governing body MPI and the subsequent increased efforts to enforce the 2018 Mining Code will have appositive or negative impact on their status in the blue chip index, but Richard Robinson, general secretary of the MPI did advise “we are committed to continue working with the government to seek a mutually agreeable solution and improve the legal framework for current and new investments”

As of 14:39 BST, Thursday, 23 August, Randgold Resources Limited share price is 7,180.00p.

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