Share

AngloGold slashes exploration budget

Johannesburg - AngloGold Ashanti, Africa's top gold producer, said on Monday it was slashing its exploration budget to focus on a few key projects and would restructure and lay off staff at its loss-making Obuasi mine in Ghana.

"The problem child in our portfolio is the Obuasi mine. The cash bleed rate is simply not affordable," AngloGold's chief executive Srinivasan Venkatakrishnan, who is known as Venkat, told a media briefing after the company released its first quarter results.

"It consumed $220m in 2013. And it has consumed $40m to date in 2014," he said.

Venkat said AngloGold was working with the government and the main mining union in Ghana to cut staff and bring in mechanised methods at the mine.

The mine is over a century old and has long been a pillar of the industry in a country once called the "Gold Coast".

In line with wider industry trends, Venkat also said AngloGold was slashing its exploration budget to between $150m and $175 million this year from $400m in 2013 to focus on a few projects that could deliver "the most bang for the buck".

These include a drilling project in Colombia and exploration blocks in Guinea.

Mining companies have been scaling back exploration in the face of depressed prices, with boardrooms insisting on a reduction in capital spending.

The group reported a rise in first-quarter earnings on Monday compared to the same period last year as it cut costs and lifted production.

AngloGold said adjusted headline earnings for the first quarter totalled $119m, or 29 US cents per share, compared with $113m in the same period last year.

Total cash costs for the quarter fell 14% to $770 an ounce from the first quarter of 2013 as new, low-cost projects came on line in places such as Democratic Republic of Congo and as the company reduced procurement costs.

Output for the quarter fell to 1.06 million ounces from around 1.3 million ounces in the previous quarter.

But year-on-year output rose 17% as operations outside of South Africa ramped up.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.32
+0.1%
Rand - Yen
0.13
+0.1%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders