Johannesburg, South Africa — MININGREVIEW.COM — 11 February, 2008 – International mining giant AngloGold Ashanti experienced a 3% decrease in gold production last year, and is expecting a further drop of around 10% during 2008.
Releasing its results for the fourth quarter and full year to 31 December 2007, the company revealed a 3% reduction to 5.5Moz for the year, principally as a result of the safety interventions in South Africa and the operational difficulties experienced at Geita gold mine in Tanzania.
The results statement showed that total cash costs were 16% higher at US $357/oz, and adjusted headline earnings were reduced to US$278 million (more than R2 billion) due to lower production, higher costs and increased expenditure on exploration activities.
The company also announced that reserves had increased by 6.2Moz to 73.1Moz – a 9% improvement over the prior year. Resources rose by 34.1Moz to 207.6Moz.
In respect of the 2008 outlook, the company is expecting to produce between 4.8 and 5.0Moz of gold at cash costs ranging from $425 to $435/oz, based on currency assumptions of R7.35 to the US dollar .
This outlook statement is made in the context of the power shortage currently facing AngloGold Ashanti in South Africa, which will account for an estimated reduction of approximately 400 000oz of gold in 2008. It also assumes that a sustainable 90% power supply is achieved for the remainder of the year.
Commenting on the results, AngloGold Ashanti CEO Mark Cutifani highlighted the recent and ongoing power crisis in South Africa.
“The uncertainty around Eskom power supply is having a significant impact on our operations in South Africa,” he emphasised. “This uncertainty means that our South African business faces very particular challenges right now, 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 added.
“We have a great deal of work to do on our operational and cost performance,” Cutifani continued. “We are focused on putting specific plans in place to improve performance throughout our assets, in particular where recent performance has been unacceptable,” he explained.
“On a positive note, I’m pleased with the compelling reserve and resource generation that we are seeing across the business,” Cutifani added. “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. We have re-defined our approach to safety, and will continue to evaluate all operational initiatives through the lens of safety,” he concluded.