(Ecofin Agency) - The Kibali mine, which produces almost all this volume, sold its gold at an average price of $46,214.8 per kilogram in Q1 2024. That is nearly $20,000 less than how much Primera Gold (now DRC Gold Trading) sold its gold at in the same quarter. Meanwhile, global gold prices were up by 37% over the period.

Recent data from the Cellule Technique de Coordination et de Planification Minière (CTCPM) shows that at least 80% of gold mined in the Democratic Republic of Congo (DRC) has been sold below global market prices since 2023. This includes gold from the Kibali mine, which is 90% owned by Barrick Gold and AngloGold Ashanti.

According to Bankable.africa, a kilogram of gold from Kibali was exported for $46,214.8 in Q1 2024, while Primera sold artisan-collected gold from South Kivu for $64,502 per kilogram. Even smallholders in Ituri and North Kivu sold at better prices; they exported unrefined gold at $59,500 per kilogram.

The price discrepancy is not new. Primera Gold sold its gold at $59,509 per kilogram and artisans at $38,484.4 per kilogram last year, compared to Kibali's $30,915.6 per kilogram.

Why such discrepancies?

Several factors may explain why Kibali’s prices are lower than global prices. First, the gold from the mine may be sold as doré, an alloy that needs refining to reach the standard 99.9% purity required internationally. If Barrick or its partners cover some refining costs, this could lower the reported net price.

Logistical costs related to transporting and securing gold from remote areas like Kibali might also contribute to the price differences. Unlike Kibali, DRC Gold Trading and local artisans often sell raw gold directly to buyers without including refining and transport costs in their pricing.

Improving Transparency

Kibali Gold is a major contributor to DRC's gold export revenues, accounting for 88.2% of total exports reported in Q1 2024. The Congolese state and Haut-Uele province receive revenue through Sokimo's 10% interest and royalties based on sales value.

From January to September 2024, the Congolese government received $27.8 million in mining royalties from Barrick, a modest increase from $25.5 million during the same period in 2023. However, while global gold prices rose by 37%, Kibali’s export volumes dropped by 8%.

Barrick Gold’s and AngloGold Ashanti’s financial reports do not clarify the pricing discrepancies compared to other players in the DRC. Enhancing transparency in sales price declarations and better oversight of major mining companies could help the country maximize its gold potential.

In addition to improving the monitoring of declared prices, developing local refining infrastructure could also be beneficial. Also, the government and mining companies must better communicate, to align practices with national interests while keeping investments attractive.