THE situation at AngloGold Ashanti’s beleaguered Obuasi mine in Ghana – which has been invaded by thousands of illegal miners – has stunned management with CEO Srinivasan (Venkat) Venkatakrishnan totally at a loss to explain what’s going on.
“The situation is surreal. It’s like something out of a Franz Kafka novel,” commented investor relations senior vice-president Stewart Bailey when interviewed after today’s presentation of interim results in Johannesburg. Kafka was a twentieth century German-speaking writer whose novels combined realism with bizarre situations and storylines.
Venkat – whose experience with Obuasi pre-dates AngloGold’s involvement because he was formerly the CFO at Ashanti Goldfields – added that: ” … this is a jurisdiction where there has never been a problem with the maintenance of law and order. Now, all of sudden, there is”.
What is really taxing Venkat’s mind is that the Ghanaian authorities have shown that they can intervene effectively – if they want to. He pointed out that the government reacted immediately to remove illegal workers when they started getting into the deep-level, high grade zones which are critical for any future that Obuasi might have.
But the government has done nothing about the illegals occupying the rest of the Obuasi lease which has forced AngloGold Ashanti to bring arbitration proceedings through the International Centre for Settlement of Investment Disputes (ICSID) as well as requesting ICSID for an urgent order to force the government to “… amongst other things, reinstate military security and restore law and order to the Obuasi mine”.
Venkat told Miningmx: “… it’s very difficult for us to speculate over what is going on and explain the government’s actions”.
He denied suggestions that it might somehow be linked to political backlash over AngloGold’s prior actions in closing down Obuasi and also that this was the reason Randgold Resources had walked away from a proposed joint venture to redevelop the mine.
“At every step of the Obuasi closure we received all the approvals that were needed including the full consent of the unions and government for the retrenchment of the work force,” said Venkat.
The situation is extremely negative for any future plans to restart operations at Obuasi because of the adverse impact on investor sentiment from what has happened. “We will need an iron-clad commitment from the government that this will not happen again”.
