AngloGold’s South African mines the slowest in showing cost improvement
AngloGold Ashanti CEO Srinivasan Venkatakrishnan (Venkat) tells Mining Weekly Online’s Martin Creamer of his confidence that South African mines will become more competitive. Photographs: Duane Daws. Video and Video Editing: Nicholas Boyd.
The South African operations of AngloGold Ashanti, which improved only slightly in the three months to December 31, remain ‘outlier’ laggards.
Of AngloGold’s 19 mines in nine countries, the South African operations have been the slowest in showing cost improvement.
While South Africa’s all-in sustaining costs average $1 088/oz, the Americas are putting gold out at $792/oz, continental Africa at $815/oz and Australia at $875/oz.
South Africa is also no longer the volume leader. Of the 3.95-million ounces produced by AngloGold Ashanti in 2015, continental Africa produced the most at 37%, with South Africa coming in with 26%, the Americas with 22% and Australia with 15%.
Now a 10% production improvement is being demanded of the South African operations, which, if attained, will translate into a 10% cost improvement.
Contributing to the expectation of a better South African performance is the high rand gold price.
AngloGold CEO Srinivasan Venkatakrishnan (Venkat) told Creamer Media’s Mining Weekly during last week’s media roundtable that the South African operations begin to take on a “very competitive” profile when exchange rate weakening is added to a 10% improvement.
The current focus is on getting the South African safety performance to improve, to which production and cost performance are linked.
Given the company’s overall success in lowering costs and boosting its balance sheet, it is seen as well positioned to take advantage of improved conditions on all fronts.
“We’re in a sweet spot,” Venkat said, against the background of the company offering good leverage to production improvement.
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