JOHANNESBURG (miningweekly.com) – The sale of the South African portfolio to Harmony Gold had made excellent progress, with unconditional competition approval received last week, AngloGold Ashanti CEO Kelvin Dushnisky said on Monday.

The announced sale of the South African operations to Harmony Gold crossed an important hurdle after the South African Competition Tribunal granted unconditional approval to the transaction on April 29.

“Harmony has its funding mechanism to get the deal done and now we’re looking for the DMRE approval as the final big milestone before we can close formally,” Dushnisky told a virtual media roundtable in which Mining Weekly took part.

In response to questions on the pace at which the company would like to proceed to 100% of production capacity at the deep Mponeng underground mine that forms part of the sale to Harmony, Dushnisky said it was something the company would like to achieve in a responsible way.

“We’re not rushing. Everything in due course,” said Dushnisky, who expressed support for the way in which the Department of Mineral Resources and Energy (DMRE) and Minerals Council South Africa were collaborating.

“The Minerals Council has been operating very well and very collaboratively with the DMRE. I think the DMRE has been acting responsibly in how it has been positioning the ramp-ups, the balancing of their responsibilities in respect of Covid-19 and an interest in having the industry with everything it supports producing to the extent that it can responsibly.

“There has been a very god balance. I think that from our perspective, we’ve been very careful. So even as we have been ramping up to 50%, the objective has not been to get there as quickly as we can but with very cautious pre-start procedures all the way through.

“For us it’s certainly people first and I’m very happy how we have been achieving that. At this point, I wouldn’t want to prejudge on going from 50% to 100%. It is something we’d like to achieve in a responsible way. We’re not pressing, but I have to say that the way the government has been management the policy around ramp-ups has been a very responsible and we’ve been fully supportive of it.

“I think we can manage 6 000 people and it’s just a matter of ramping it back up and not rushing around to get that back up. I think the answer is yes. We certainly can. We’re certainly comfortable going back to 100% so we’ll do it according to a system where we can ensure that when we are ramping up, we’re comfortable every step along the way.

“I wouldn’t want to put a time frame on that, but we were comfortable to ramp back up and we wouldn’t do it unless we were comfortable that we can do it effectively and responsibly.

“We also want to ensure that the logistics are sustainable. We wouldn't want to ramp up too quickly only to find that we were facing logistics challenges that could cause disruption,” Dushnisky said.

The production of the Johannesburg- and New York-listed company in the three months to March 31 was 716 000 oz at a total cash cost of $814/oz from 752 000 oz at $791/oz in the same period last year. All-in sustaining cost was $1 047/oz for the three months compared with $1 009/oz in the same period last year.

The announced sales of assets in South Africa and Mali were achieved despite disruption caused by Covid-19-related stoppages at Serra Grande in Brazil, Cerro Vanguardia in Argentina and Mponeng and Mine Waste Solutions, in South Africa, which straddled the first and second quarters and have since been lifted.

AngloGold is no longer selling its Cerro Vanguardia mine in Argentina, after concluding it could derive more value for shareholders by developing the remaining potential in the orebody.

“We’ve decided to keep the asset in our portfolio,” Dushnisky said. The company has concluded that it can derive more value for shareholders by developing the remaining potential in the orebody.

The ramp-up of Obuasi’s mining rate to 4 000 t/d, from 2 000 t/d day, is now expected to occur in the first quarter of next year owing to slower shipments of certain equipment to Ghana and difficulties in ensuring key, skilled employees can travel to the site amidst Covid-19-related border closings. The project remained on budget.

Even when AngloGold exits South Africa, AngloGold intends to continue to use the Rand Refinery in Germiston to refine its gold.

“Rand Refinery’s an important part of the business. We remain a shareholder and as you know Rand Refinery allows us to refine gold from outside of South Africa as well, and we regard that as strategic and so our intention is that we’ll intend continuing processing gold from our African operations at the Rand Refinery,” Dushnisky said in response to Mining Weekly.