AngloGold defends shutdown amid firm’s bid to stem losses

ANGLOGOLD Ashanti’s closure of old mines in SA at a loss of 8 500 jobs has less to do with making the South African division attractive for a buyer or preparing the company for a split than it has to do with stemming the haemorrhage of cash.

Grilled on the closures and the implications for AngloGold, chief executive Srinivasan Venkatakrishnan pointed out during the company’s interim results presentation on Monday that a regulatory process was under way with organised labour at its Kopanang and TauTona complexes to find ways of stemming losses at the older mines, limiting what he could say about the outcome.

Data for the two complexes, which include the Savuka mine earmarked for closure, show the financial liability they are for AngloGold.

TauTona, which includes Savuka, generated 35% less gold in the six months to end-June, producing 57 000oz at an all-in sustaining cost of $1 858/oz, a 74% increase on the same period a year earlier.

AngloGold is investigating folding TauTona into its nearby Mponeng mine.

Kopanang’s gold output fell 6% to 44 000oz, contributing to a 26% increase in all-in sustaining costs to $1 682/oz, marking out the two mining operations as the most expensive in the group and pushing the average South African mine to a worst-all-in sustaining cost of $1 259/oz against an average received price of $1 236/oz in the six months.

A year ago, the cost metric stood at $958/oz when the rand was weaker.

Venkatakrishnan declined to comment on reports from Bloomberg and Reuters, suggesting that AngloGold was in talks to sell South African mines to Harmony Gold and was again considering splitting its assets. — BDLive