AngloGold Ashanti intends to shut down the underground operations of its Obuasi mine in Ghana, after having lost more than $1 billion on the project. This is a temporary measure as the company tries to turn the mine around and includes retrenching most of the 6 500 workforce.

At the Obuasi mine in Ghana, AngloGold Ashanti has progressed a range of interventions to address historic underperformance and the high cost structure, but substantial further work is required to establish a sustainable future for the mine.

“We have now developed a good working partnership with the Government of Ghana, the Ghana Mineworkers Union and other key stakeholders to address the challenges facing Obuasi. We must do all we can to stop the current cash outflows at Obuasi and define a sustainable future – and we appreciate the support of our partners in taking the decisive action necessary to achieve this,” Srinivasan Venkatakrishnan, Chief Executive Officer of AngloGold Ashanti, said.

Addressing the underperformance at Obuasi remains a key objective for AngloGold Ashanti, Venkat said. The restructuring and repositioning of the Obuasi mine, which is subject to a number of consents, is likely to result in a substantial reduction in the mine’s existing operations and significant work force redundancies (currently estimated at approximately $220 million).

Fundamental changes aimed at systemically addressing legacies, infrastructure, development constraints and cash outflows are being implemented. This work includes initiatives to reduce the footprint of the operation and consolidate infrastructure, lower operating costs by introducing a mechanised mining approach in the future, together with the refurbishment and automation of the processing plant. AngloGold Ashanti is also considering other strategic alternatives for its Ghana business.