Publications
Partners
Johannesburg - AngloGold Ashanti [JSE:ANG] CEO Mark Cutifani on Thursday promised the company would turn the corner after strikes in the mining sector left it with huge losses.
"We will come out stronger than we were," he told reporters in a teleconference.
AngloGold Ashanti saw earnings slump 49% in the third quarter due to labour unrest in South Africa. It also reported that operations were back to normal at all but one of its facilities.
The mining company posted adjusted earnings of $235m (R2.03bn) in the third quarter.
A dividend of 50 South African cents a share had been declared, compared with 100 cents the previous quarter.
Overall production in the quarter was primarily affected by the strike in the company's six South African mines which led to a halt in production.
Production in its Obuasi mine in Ghana was also lower than anticipated.
In order to maintain its balance sheet flexibility, the company had reduced its capital expenditure budget for this year by $200m (R1.72bn) to between $2bn (R17.3bn) and $2.1bn (R18.14bn).
"It's been a tough period for the industry here, but we've taken decisive action on a number of fronts to stay the course.
"Our major projects are on track and we're making the decisions to ensure we maintain a lean, fit business that will continue delivering strong returns," he said.
As of November 2, strikes at the mines had cost AngloGold Ashanti about 250 000oz of gold production.
This, he added, resulted in a slow ramp-up of production in the fourth quarter.
He said the figure was expected to rise due to another strike which started at the Mponeng mine on November 3.
Further details of strike's impact on the balance sheet would be reflected in the fourth quarter performance.
"We will maintain our focus of protecting returns."
He said the mining giant was utilising new technology which reduced the length of drill operations from 24 days to seven days.
AngloGold Ashanti would not need new capital investment in its South African mines because little damage was done to infrastructure, he said.
The dividend was expected to be at a similar level in the fourth quarter, assuming that the unprotected strike action was speedily resolved, before moving back in line with long-term operating and financial performance in 2013.
