Johannesburg, South Africa — 21 February 2013 – AngloGold Ashanti Limited “’ the third-biggest producer of the precious metal “’ is to cut investment in projects this year and may reduce output estimates should labour unrest reawaken in South Africa, following last year’s spate of strikes.
Capital expenditure has declined to US$2.1 billion from US$2.2 billion in 2012, the company said in a statement quoted by Bloomberg News. Gold output, down 17% to 859,000oz during the fourth quarter because of strikes, may be as much as 950,000 ounces in the three months to March depending on the labour situation. Unrest cut production, reducing profit by 29% last year.
“In terms of capital and spending disciplines, we tightened up considerably,” said CEO Mark Cutifani, who is leaving the Johannesburg-based company to replace Cynthia Carroll as CEO of Anglo American plc on April 3. “Capital numbers are being kept tight and we will continue to trim where we don’t see real short-term uplift.”
Adjusted earnings excluding one-time items dropped to US$924 million, or US$2.39 a share, last year from US$1.3 billion, or US$3.36, the company said in a statement. That compares with the US$3.03 median estimate of 14 analysts surveyed by Bloomberg.
AngloGold, said output was 3.94Moz for the year, missing a target of 4.3 to 4.4Moz. Total cash-costs per ounce rose 14% to US$1,009, it added.
The company cut its third-quarter dividend in half and trimmed annual spending plans by US$200 million after all of its South African mines were halted by staff walkouts. AngloGold will pay a dividend of 50 South African cents a share for the fourth quarter, matching the payout in the previous three months, it said.
Industrial unrest and above-inflation pay gains were partly behind the decision by Gold Fields Limited to spin off some of its South African assets, and Sibanye Gold Limited was listed on February 11.
“In terms of a broader portfolio conversation, the board and the executive are continuing to go through options, looking at possibilities,” Cutifani said. “Obviously everybody’s watching the Gold Fields performance and seeing how they’ve gone. And so we’re in that process.”
AngloGold is reviewing costs and expansion projects and plans to offload peripheral assets, with the Navachab mine in Namibia earmarked for sale, according to CFO Srinivasan Venkatakrishnan.
Group gold output for 2013 is estimated at 4.1 to 4.4Moz, with total cash costs of US$815 to US$845/oz, the company said. While the company expects to produce as much as 950,000 ounces at US$900 to US$910/oz this quarter, it may revise the estimates down if there’s further labour unrest.
Source: Bloomberg News. For more information, click here.