THE viability of its current operation as well as several projects that would extend the lives of its South African mines partly rested on AngloGold Ashanti’s ability to cut staff, estimated to be about 800, the group said.
“We have battled to maintain volumes in the South African business and we need to ensure the business as a whole remains viable so we can continue to reinvest,” said Stewart Bailey senior vice-president of corporate affairs for the gold producer.
AngloGold is continuing work on the feasibility study of its Mponeng Phase 2 deepening project which aims to extend the life of the mine. It was previously deferred whilst the group kicked around alternative ways to tackle the continued development of the world’s deepest mine.
Similarly, AngloGold deferred the Zaaiplaats project, a life extension of its Moab Khotsong mine, following a decline in the gold price in 2013.
Reuters reported last week that AngloGold would cut about 800 jobs, a development that stirred the ire of the National Union of Mineworkers (NUM) which is due to meet AngloGold today (January 23).
“The reasons submitted to us are based on a business plan and the company restructuring because they are not meeting their gold targets. Our position is that we don’t think these reasons are valid,” said the NUM’s Tafa Moya.
Said Bailey: “We’re in dialogue with all stakeholders and we don’t want to pre-empt anything as this process has yet to run its course. These discussions with union representatives are to ensure we have a transparent discussion around all of the issues and that we keep the business viable”.
Although AngloGold has not been specific about where it may cut jobs, it’s worth noting that the all-in sustaining costs (AISC) of Tau Tona and Kopanang was at $1,800/oz and $1,579/oz respectively in the September quarter. AngloGold invested about R2.8 billion in its South African operations in 2015.
The average AISC was $1,211/oz for the group’s South African mines which compares to an average AISC of $946/oz for the African operations and $1,266/oz and $928/oz for the Australian and Americas mines in the quarter.
This means that even when the gold price climbed to just under $1,370/oz in August, the company’s South African assets were just about scraping a margin on a dollar per ounce basis. The gold price is currently at $1,210/oz.
AngloGold has seen gold production from its South African mines fall a quarter to about one million ounces in the last three years. Up to now, it has reduced staff through natural attrition.
