Spot gold prices have declined 25% this year,
forcing producers to write down assets and pushing smaller mining companies to
the brink of closure.
"While we remain positive on the prospects for the gold price
in the long term, we've taken the decision to prepare our business for a
volatile gold price environment where we believe there may be downside risk in
the medium term," said Venkat
The miner has global operations, and posted an
adjusted headline loss of 35 US cents in the April to June period compared to
earnings of 29 US cents in the previous three months as it wrote down ore
stockpiles on a falling gold price.
It scrapped its quarterly dividend payments because of the
volatile environment and said it would review its policy at the year end with a
view to restating a twice-yearly payout.
Production rose 4% to 935 000 ounces in the quarter, but
the company reduced its 2013 target to between 4 and 4.1 million ounces after
revising its mine plans.
Like many South African miners, AngloGold has been weighed down
by rising production costs and labour disputes as well as falling commodity
South Africa accounts for around 40% of AngloGold's
global output and the company's new chief executive Srinivasan Venkatakrishnan
has wasted no time removing marginal ounces and digging out free cashflow
"We're phasing some of our expenditure on projects in South
Africa and have reduced this year's total capital budget by about $150m,
to $1.95bn," said Venkat
AngloGold's former financial director Venkat
akrishnan, who took
over from Mark Cutifani in May after Cutifani joined Anglo American as chief
executive, is aiming to more than halve corporate costs from their 2012 levels.