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SA gold firms should grow in this time of plenty, AngloGold CEO Bobby Godsell
In an interview on Radio 2000 @ 18:35 on Thursday, 27 July 2006
[miningmx.com] -- SOUTH African gold miners should take advantage of never-seen-before rand gold prices to grow their operations, AngloGold Ashanti CEO Bobby Godsell said on Thursday.
"At R145,000/kg, these are gold prices we've never seen in South Africa before, so everyone should be dusting off their plans. We certainly are," Godsell said on the Moneyweb Power Hour weeknightly business show.
"It would be very nice if the stronger rand per kilogram gold price saw this industry grow. We will certainly see life extension," he said, adding most of AngloGold's seven South African mines are 20 years beyond their nameplate design capacity. They were designed for 30 years and have been going for 50 years.
"It is in the interests of the country, the workers, communities, foreign exchange earnings, tax to extend this industry as far as we can," he said.
Godsell referred
to a study conducted a few years ago that showed no safety or physiological reasons why mining could not go down to 5,000 metres below surface.
"The critical barrier is an economic one," he said.
This year, AngloGold Ashanti has a R6bn capital expansion project to replace more than six million ounces of production each year, he said.
Chief Financial Officer Srinivasan Venkatakrishnan told Classic Business Day AngloGold Ashanti is confident it can replace depleted ounces.
Of the company's 21 operations around the world, 16 of those have lives of 10 years or more.
"We have enough brownfield potential in and around our existing minesites to replace ounces. This year we are targetting the addition of nine million ounces to our reserve base," Venkatakrishnan said.
The company also has greenfield exploration projects in the Democratic Republic of the Congo, Colombia and Australia.
"Potentially in the next three to five
years, we could up with a mine as large in size as Geita," he said.
There was also the prospect of merger and acquisition activity to grow the company, he said. "We are not reliant on that for our growth. We will get the growth from our own backyard."
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