CAPE TOWN (miningweekly.com) – AngloGold Ashanti says its focus remains improving margins across the business, despite lower grades at some of its operations, as well as currency headwinds.
“We are committed to improving efficiencies and widening margins regardless of the lower metal price,” AngloGold CEO Srinivasan Venkatakrishnan told delegates at the Investing in African Mining Indaba, under way in Cape Town.
“We’re getting back to basics in certain places, keeping long-term prospects of the business intact and improving the portfolio mix.”
AngloGold Ashanti is the third-largest global gold producer, with operations in 11 countries.
The CEO said the company was committed to extending mine lives and extending portfolios, while safety was the highest priority in the business.
“It underpins everything we do. Globally, human error is our biggest challenge.”
AngloGold employs 50 000 people around the world and has 17 mines in nine countries.
“A minor mistake can have catastrophic consequences. We are not only relentless in eliminating hazards, but we instil a culture that prizes safety above everything else.”
There has been a drop in deaths and injuries on the company’s mines over the past decade.
Venkatakrishnan said one of the most notable successes of the past few years had been the reconstruction of the company’s balance sheet.
“In the global gold industry, we remain one of the only two majors that has not issued any equity since 2010. It is an exclusive club not easy to belong to, but one we are proud to belong to for over six years.”
Venkatakrishnan said the company had stuck to strong cost management and had moved decisively to “bullet” its highest-cost debt.
“We’ve now deleveraged to a point we feel comfortable with, but not complacent. The market is comfortable as well.”
He added the company would improve its production mix in the medium- to long-term through brownfield opportunities. He added that the primary objective was not production growth for its own sake.
“We carefully consider every dollar we invest to ensure that capital is rigorously allocated to the highest return options. We target returns in the mid-teens for these investments.”
He said two flagship projects, in Guinea and Mali respectively, could see new processing capacity open up, while a small amount of nominal capital had been spent on the Tropicana gold mine, in Western Australia, this past year. This was expected to deliver improved volumes and costs going forward.