HomeGoldObuasi back in profit soon

Obuasi back in profit soon

AngloGold Ashanti’s
Obuasi gold mine
in Ghana
Obuasi, Ghana — MININGREVIEW.COM — 01 July 2008 – A US$175 million (R1.4 billion) revamp should put AngloGold Ashanti’s loss-making Obuasi mine in Ghana back into profit soon, allowing the century-old pit to stay in business for another 25 years.

Senior mines manager Ahmed Bashiru told Reuters in an interview at the mine: “We have a lot of reserves, almost in the same quantities as we have mined since its commissioning.”

“The company plans to spend about US$130 million (R1 billion) on its exploration, ore reserve development and "stay-in-business" expenses,” said general manager corporate affairs John Owusu.

“The remaining US$44 million R355 million) for this year’s injection of funds would be allocated to a newly-formulated turn-around programme aimed at increasing output and reducing running costs,” he added.

Owusu said other challenges being addressed related to illegal mining, environmental clean-up, water management and the rehabilitation and closure of old mine shafts. “We believe Obuasi can have a great future once these challenges have been addressed,” he told Reuters. "But we will have to work for it.”

He pointed out that so far Obuasi had never dug below 50 levels, or 1500 m underground, and emphasised that there was great potential down there if the company could successfully implement the turn-around programme.

Obuasi was once the star operation of Ashanti Goldfields, which was taken over by South Africa’s AngloGold to create AngloGold Ashanti – one of the world’s biggest gold companies in 2004.

The mine’s output has been declining since the 1990s. It produced 360 000 ounces of gold in 2007, down from a maximum of 900 000 ounces before the takeover four years ago.

Management had in recent times described Obuasi as unpredictable and a nightmare, as the mine continues to record losses – US$33 million (R264 million) in 2007.