JOHANNESBURG (miningweekly.com) - A massive operational makeover is under way at AngloGold Ashanti's underperforming South African mines.

AngloGold Ashanti CEO Mark Cutifani said on Wednesday that the company was virtually "changing the way we do every basic activity in the business".

Cutifani elaborated further to Mining Weekly Online in a video interview that South Africa's mining processes had remained fundamentally unchanged decades, which had put the industry 15 to 20 years behind other sectors.

"Also, the way we manage the business hasn't changed for many years. The model we're working is to change the way we plan and schedule the work and how we interface and manage people through the organisation.

"We really are talking about transformation and through that process alone there is a 20% to 30% improvement to be had in terms of output per person," Cutifani added.

Simultaneously, the introduction of electric drills had improved rockface productivities by about 15%.

"It's really is a combination of leadership, work practices, the way we support people in their work and incremental technology changes.

"All of those things have to come together for us to take at least 20% out of our cost structures and that's where we are focused," he added.

A task-force approach had been used with great effect at the Geita operation in Tanzania and at the company's Brazilian and Australian operations.

The knowledge had been brought back to South Africa, where the leadership team was designing a new way of operating.

The approach had already been used to great effect at AngloGold Ashanti's Mponeng mill in South Africa.

"We are using our skills and experiences to make sure that the current processes we undertake and we think there is at least 10% cost saving to be had in change approach in the first year," Cutifani told Mining Weekly Online.

Thereafter, there would be a reconstruction of the company's mining business in a similar way to which the automotive industry had been restructured 40 years ago, which Cutifani expected to deliver another 10% to 15% cost improvement.

"Beyond that, and I am talking plus ten years, new technologies are the key," he said.

To mine at depths below 4 000 m, new technological systems would have to be introduced so that people could be removed from the vulnerable rock-face areas and to improve productivity and safety.

"We call it a three-horizon approach, the first taking place in the next 12 months, the second taking place over the next three years and the third over the next ten years, in order to create a long-term sustainable gold-mining business in South Africa.

"The driving technologies are available to enable South Africa to mine below 4 000 m, but they need to be put together into a system that works coherently and at a more efficient level, and that will take some time," he said.

Much could be learnt from other companies and other industries, in the fields of new cutting technologies and equipment able to "clean" material from the face more effectively.

A range of technologies that were available needed to be applied so that the next deep-level step could be taken to facilitate mining below current infrastructure in South Africa's deep-level gold mines.

(See also AngloGold posts record profit, boost dividend and Mining Charter dialogue ‘very constructive' - AngloGold Ashanti)

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