“We are an outlier in our costs which are well above our peers but we’re working to be more competitive.”
OUTGOING CFO, Christine Ramon piloted AngloGold Ashanti through difficult waters as its interim CEO during the Covid hit 2020 culminating in December of that year when rumours surfaced that Sibanye-Stillwater was contemplating a merger/takeover proposal. Until a full-time appointment was made, AngloGold was vulnerable and it drifted strategically. Enter Alberto Calderon, a Swiss army knife of an executive from the mighty BHP. Calderon thinks AngloGold’s investment case can be vastly improved but not through reinvention. His plan is simply to join the dots better. In essence, this means better operational discipline, extending the life of its Geita mine in Tanzania, and fast-tracking the development of projects in the US and Colombia.
In February, he gave greater substance to this plan by unveiling an 18 month mine-by-mine review. The aim? To bring group cash costs below $900 per ounce. Calderon didn't rule out portfolio changes either. He has already cut head office numbers to 311 from 526 saving the company $40m a year. In some positive news, AngloGold is getting its first repatriated dividends for about three years out of Kibali, its joint venture with Barrick Gold in the Congo. Calderon is also excited by the prospects of the firm's Nevada assets - which could yield 300,000 oz/year in new gold - following the takeover of Corvus Gold last year.
But a major short-term deliverable for Calderon will be returning the group's Obuasi mine in Ghana to full production of 300,000 oz/year by 2023. It might then be possible then to push the envelope further on Obuasi by seeing it achieve 400,000 to 450,000 oz/year potential, a long-promised ideal. Underground mining resumed last year following an accident and mine review. The full run rate is only expected in the fourth quarter. The mine plays a major role in AngloGold’s growth story so it will be important that in ramping up production there are no additional hiccups.