Johannesburg, South Africa — 08 August 2013 – AngloGold Ashanti Limited, the world’s third-largest bullion producer, plans to cut about 2,000 management jobs, or about 40% of its management positions, in an effort to reduce costs.
Chief executive Srinivasan Venkatakrishnan told a media conference the job cuts were part of a larger plan aimed at saving the company as much as US$482 million next year, reports Fin24.
AngloGold Ashanti reported a swing to a loss in the second quarter and scrapped its quarterly dividend payment as it tailored its business to survive the low gold price. Spot gold prices have declined 25% this year, forcing producers to write down assets and pushing smaller mining companies to the brink of closure.
“While we remain positive on the prospects for the gold price in the long term, we’ve taken the decision to prepare our business for a volatile gold price environment where we believe there may be downside risk in the medium term,” said Venkatakrishnan.
The miner has global operations, and posted an adjusted headline loss of 35 US cents in the April to June period, compared to earnings of 29 US cents in the previous three months, as it wrote down ore stockpiles on a falling gold price.
It scrapped its quarterly dividend payments because of the volatile environment and said it would review its policy at the year end with a view to restating a twice-yearly payout.
Production rose 4% to 935,000oz in the quarter, but the company reduced its 2013 target to between 4 and 4.1Moz after revising its mine plans.
Like many South African miners, AngloGold has been weighed down by rising production costs and labour disputes, as well as falling commodity prices.
South Africa accounts for around 40% of AngloGold’s global output and Venkatakrishnan has wasted no time in removing marginal ounces and digging out free cash-flow generation.
“We’re phasing some of our expenditure on projects in South Africa and have reduced this year’s total capital budget by about US$150 million to US$1.95 billion,” said Venkatakrishnan. He is aiming to more than halve corporate costs from their 2012 levels.
Source: Fin24. For more information, click here.