CAPE TOWN (miningweekly.com) – AngloGold Ashanti CEO Kelvin Dushnisky is very upbeat about developing its Obuasi gold mine, in Ghana, and has described it as being "in a class of its own on a number of metrics".
“It will be an engine of growth for this company. You need big, chunky engines of growth which, year after year, provide reliable, predictable production, and they don’t come along very often.”
The mine is under development at a cost of $550-million. Dushnisky told the Investing in African Mining Indaba, in Cape Town, that AngloGold’s initial investment of $550-million was expected to generate gold production of between 400 000 oz/y and 450 000 oz/y of gold over a 20-year life.
He said the production costs were expected to average $800/oz, providing excellent margins.
“The fact is that there are just not a lot of orebodies like it in the world.”
Dushnisky said the mine had been approved by the Ghanaian Parliament, with all bases covered, including security, the environment and fiscal stability. While it took longer-than-planned to get the deal together, it was "100% worth the wait".
“There is tremendous support for Obuasi from the Ashanti King and the President of Ghana,” said the new AngloGold CEO, who moved from Barrick Gold in September.
He said stakeholder engagement was key to the asset and that in-country expectations were high, from the government to traditional leadership and at the community level.
Extensive training would be done.
“We have to make sure Ghanaians are trained and skilled to meet the needs of modern, mechanised underground mining,” said Dushnisky.
He said specialised skills would be brought in during the operational readiness phase, but that systems had been put in place to ensure Ghanaian successors were trained to fulfill roles in the company.
Speaking about the overall position of AngloGold, Dushnisky said business was more productive and sustainable and carried significantly less risk in all aspects of the company at present.
“Productivity over five years is up 50% and rising. Every cost element is falling.”
Dushnisky said 2013 to 2015 were all about cutting costs, conserving cash and fixing the balance sheet, but that the years 2016 and 2017 were different. The company decided to reinvest in high-return projects, including projects in Australia and Guinea.
“We continue to push hard to ensure investments bear fruit, and we are driving efficiency projects across the business.”
He said AngloGold had a diversified portfolio, both geographically and within mine types, from deep underground mines in South Africa to shallow underground mines in Brazil and large openpits in Argentina.
The South African portfolio currently makes up 13% of the company's global production – "a small slice of current production albeit a profitable one", said Dushnisky.
He said there had been significant company improvements in safety and the environment. “We do know though that we can do better and will never become complacent.”