JOHANNESBURG (miningweekly.com) – Gold mining company AngloGold Ashanti is working with police to prevent the expansion of illegal mining beyond the northern extremity of its lease tenement at the Obuasi gold mine in Ghana.

AngloGold executive VP Graham Ehm said at the company’s presentation of yearly and quarterly results in Johannesburg on Monday that the company’s priority was a “safe and peaceful resolution to the current situation”. (Also view attached Creamer Media video).

Formal feedback was still awaited from last Monday’s visit to the troubled Obuasi site of a high-level delegation.

“We’re hopeful of a resolution very soon, but at this stage we’re continuing to work with the police to prevent the expansion of the galamsey beyond the north,” Ehm told mining analysts and journalists, as he flashed on to a large screen the tenement map to illustrate graphically the extensive mining lease area, compared with the small northern extremity where illegal mining was taking place.

“The mining lease is quite extensive and we’ve applied to the government to reduce the size of the tenement by some 60%,” he told the presentation, which was attended by Creamer Media’s Mining Weekly Online.

This incursion of several hundred illegal miners in the northern part of the mine comes against the background of illegal mining causing considerable disruption to mining operations across Ghana for some time.

In early 2013, this prompted the Ghanaian government to implement a programme to remove the so-called galamsey from illegal mining tenements across the country, including at Obuasi.

Through the Chamber of Mines, the mining industry in Ghana at that stage entered into an agreement with the government to provide ongoing security support to supplement the mining company efforts to secure property and mining leases.

On January 13, incursions into the northern part of AngloGold’s Obuasi operating footprint were turned back by security forces.

But after supplementary security forces withdrew on February 2, larger incursions followed on February 6 when AngloGold communications manager John ‘Big John’ Owusu was fatally injured after being hit by a retreating vehicle, which had been confronted by an aggressive mob.

As a consequence, AngloGold had removed all non-critical staff from the mine while keeping government stakeholders updated and engaging with the authorities at the highest levels for the re-establishment of law and order and the removing of illegal miners from the site.

At the same time, the company was undertaking a feasibility to redevelop the stalled Obuasi, which involved refocusing its efforts on decreasing upfront redevelopment capital, cutting operating costs and improving recoveries based on recent testwork and engineering – work that it expected to complete by mid-year.

The environmental review process for the mine’s redevelopment, which was being undertaken in conjunction with Ghana’s environmental protection agency, would likely extend into the second half of this year.

Work with the Ghanaian government was also under way on an investment development agreement, which would define and stabilise the fiscal conditions under which the project would operate.

With those elements in place, AngloGold would have a full investment package to offer any prospective development partner, which was being sought following the withdrawal from a potential joint venture agreement by Randgold Resources. (Also view attached Creamer Media video).