Johannesburg, South Africa — MININGREVIEW.COM — 04 April 2008 – AngloGold Ashanti Limited – South African gold major and one of the world’s top producers – is focusing on the implementation of new strategies to improve operational and cost performance throughout the group in 2008.
This is the word from CEO Mark Cutifani in the AngloGold Ashanti annual report published here this week.
Commenting on 2007, he emphasised that a great deal of work had to be done in respective of overall performance. “We are focused on putting specific plans in place to improve performance throughout our assets, in particular where recent performance has been unacceptable,” he said.
“The uncertainty around Eskom power supply is having a significant impact on our operations in South Africa. “This uncertainty means that our South African business faces very particular challenges right now,” Cutifani pointed out, “and we’re working constructively with organised labour, Eskom and the government to ensure that we find sustainable solutions that protect the reserve integrity and potential of these operations.”
He estimated that the power shortage currently facing AngloGold Ashanti in South Africa will account for an estimated reduction of approximately 400 000oz of gold in 2008, and this is assuming that a sustainable 90% power supply is achieved for the remainder of the year.
“On a positive note,” Cutifani added, “I’m pleased with the compelling reserve and resource generation that we are seeing across the business, and it underlines the potential across our global portfolio.
The company announced that net of depletion, reserves in 2007 had increased by 6.2Moz to 73.1Moz. – a 9% improvement over the prior year. This includes 3.8Moz at Moab Khotsong due to the inclusion of an area adjacent to the operation to access deeper Vaal Reefs blocks to the south-west of the current mine, plus 3.4Moz at Mponeng due to the inclusion of the carbon leader reef project below 120 level. Reserve planning was based on a price assumption of US$600/oz. Mineral Resources increased by 34.1Moz to 207.6Moz, based on a resource planning assumption of US$700/oz
For the year, gold production and costs were principally affected by safety interventions in South Africa and the operational difficulties experienced at Geita gold mine in Tanzania. This resulted in production of 5.5Moz, with total cash costs of US $357/oz and headline earnings of US $278 million (almost R2.3 billion).
In respect of the 2008 outlook, the company is expecting to produce between 4.8Moz and 5.0Moz of gold at cash costs ranging from $425/oz to $435/oz, based on currency assumptions to the US dollar of R7.35/$.
“I am also pleased with the improving record in safety performance that we have started to see following the launch of our Safety is our First Value campaign in November last year,
Cutifani concluded. “We have redefined our approach to safety and will continue to evaluate all operational initiatives through the lens of safety.