ANGLOGOLD Ashanti’s head office is located in Turbine Hall, a building of metal grid windows, ductwork, and brick in downtown Johannesburg that dates from the 1920s. When the company moved there in 2007 it was a declaration of independence: a fashionable abode for a company cut free from its overlord Anglo American, yet solidly rooted in the South African earth of its origin.
At the time, the company operated some of the country’s largest gold mines – as it had done for the best part of a century before. Today, however, it doesn’t mine South African soil at all, focusing instead on Ghana and Tanzania in Africa, Australia, and newer prospects in Colombia. Moreover, AngloGold’s lease on Turbine Hall has six months to run: emblems, perhaps, of a company in search of a fresh identity.
Kelvin Dushnisky, a former Barrick Gold executive, was the last person to speak with certainty about where AngloGold was heading.
In an interview with Miningmx in 2019, not long after his appointment, he spoke of narrowing the gap between the company’s market value and its gold production. The company was the third-largest gold producer but was fourteenth in the gold company market capitalisation stakes behind Newmont Mining, Newcrest Mining, and Franco-Nevada. Gold-rich, but dollar poor, you might say.
Today, AngloGold still trails those über-gold producers in market value, with the added fact that it’s also less valuable than its South African rival Sibanye-Stillwater. What’s equally significant is that the firm’s new boss, Alberto Calderon, is talking about narrowing the firm’s discount to net asset value, just as Dushnisky had done two years before. The divestment from South African mines that Dushnisky considered key to AngloGold’s makeover had some effect, yet the market remains ‘meh’ about its prospects.
Calderon, a former BHP executive with broad experience (but none in gold mining), says he’ll take over at AngloGold in September with a mission to join the dots. He wants to improve operational execution and bring momentum to development at Quebradona and Gramalote, its two main Colombian projects. As a Colombian, analysts think Calderon will help AngloGold’s cause in this regard. They are also impressed with the breadth of his experience.
There’s also hope Calderon will tackle the question of AngloGold’s primary listing, currently on the Johannesburg Stock Exchange. Dushnisky had indicated it might be switched to London or New York where it might attract the kind of premium rating its peers enjoy.
Riding high above these particulars, however, is the possibility that failure of Calderon to deliver could spell the end for AngloGold. Waiting on the sidelines, Sibanye-Stillwater is aiming to beef up its own flagging gold production with the non-South African output of a rival. It approached AngloGold in ‘friendly terms’ during December to do exactly that until its corporate hawks were sent packing by then-interim CEO, Christine Ramon. But Neal Froneman, Sibanye-Stillwater’s deal-hungry CEO, is not a man easily deterred.
Froneman also sized up Gold Fields, another company with a Johannesburg head office. Unlike AngloGold, Gold Fields has local production, but it is small beer relative to total group production. It’s unknown whether Gold Fields’s recently appointed CEO, Chris Griffith, is interested in Sibanye-Stillwater’s takeover interest. If not a merger, Griffith might sell the South Deep mine, Gold Fields’s Carletonville asset, to Froneman.
Whatever happens, the Johannesburg-listed gold industry is likely to be an interesting watch: two new CEOs and another with a keen appetite for M&A. Calderon, 61, railed against the notion of the non-executive duties a semi-retirement might easily afford him. “It’ll be boring”, he said in an interview. One thing’s for sure, AngloGold is likely to keep him busy. He dare not get it wrong.
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