Gold miner gets ok to fire up Obuasi
ANGLOGOLD Ashanti, the world’s third-largest gold mining company by production, yesterday cleared a major regulatory hurdle in its $500 million (R6.77 billion) investment in Ghana, after it obtained environmental permits for its Obuasi operations.
The group yesterday said that it expected the operations to produce 400 000 ounces a year over the next 20 years.
Outgoing chief executive Srinivasan Venkatakrishnan said Ghana’s Environmental Protection Agency issued the environmental permit on Tuesday to pave the way for the redevelopment of the high-grade ore body.
“With the key permitting and regulatory process complete, we will continue to progress the redevelopment of the Obuasi mine as a modern productive operation that will benefit a range of key stakeholders for at least two decades,” Venkatakrishnan said.
Venkatakrishnan will in August leave the group after 18 years at the company, the last five as chief executive, to become chief executive of Vedanta Resources. Vedanta, which is listed on the London bourse, is a diversified natural resources firm, with interests in zinc, lead, silver, copper, iron ore, aluminium as well as oil and gas. Earlier this year AngloGold Ashanti said it would spend $500m to reopen its Obuasi mine as retrenchment costs and a provision for the silicosis class action at its South African operations squeezed earnings in the year to December. The group has a 100 percent interest in Obuasi, which is located in the Ashanti region of Ghana, 200km north-west of Accra.
The Obuasi mine was acquired by AngloGold in the merger with Ashanti Goldfields in 2004. However, the company halted operations at the ageing mine at the end of 2014 after suffering from substantial financial losses.
The operation was also overrun by illegal miners in 2016. AngloGold said it had budgeted to spend 25 percent of the $500m this year, with 55 percent expected to be spent next year and the final 20 percent in 2020.
The government of Ghana and the group have put in place several agreements, including a Development Agreement, Tax Concession Agreement (TCA), Security Agreement and a Reclamation Security Agreement. The Ghanaian parliament last week approved a grant of fiscal concessions to AngloGold under the TCA. The total estimated value of taxes and duties in the fiscal concessions is $250m.
Anchor Capital investment analyst Seleho Tsatsi said the diversification into Ghana was part of AngloGold’s expansion strategy. “The focus for the company has been expanding more outside of South Africa as its production from South Africa has decreased.
“When you look at the locally listed gold miners, AngloGold differs from most of its peers in that a sizeable portion of its operations are offshore” Tsatsi said.
AngloGold Ashanti rose by 1.69 percent on the JSE yesterday to close at R109.70.