Share

AngloGold CEO: We have to act to protect most of our workers

Cape Town - AngloGold Ashanti's turnaround strategy at its loss-making operations aims to protect the business and most of its workers, chief executive officer Srinivasan Venkatakrishnan said on Wednesday.

The world’s third-largest gold producer, with about 28 000 employees in South Africa, announced that it has initiated a retrenchment process.

ALERT: Charter warning as AngloGold starts retrenching 8 500 workers

AngloGold Ashanti [JSE:ANG] said this restructuring contemplates some 8 500 roles across its South African business.

“This is a difficult decision which follows a period of significant and – ultimately – unsustainable losses, and also the evaluation of the options available to return our South African business to profitability,” Venkatakrishnan said.

“It is critical that we act to protect the long-term sustainability of this business and the majority of our workforce. We are mindful of the sensitivity that this situation demands, and are committed to supporting all our employees throughout this process.”

AngloGold Ashanti signalled to stakeholders earlier this year that it would review its South African gold-mining operations in light of heavy, and ultimately unsustainable, losses they have incurred.

It said some of the older mines have reached the end of their economic lives, several decades after they started production.

"These mines face systemic challenges, including near-depletion of ore reserves, increasing depth and distance from central infrastructure, declining production profiles, and cost escalations that have continued to outpace both inflation and a subdued gold price."
 
It pointed out that TauTona and Kopanang has been a clear demonstration of these challenges, with all-in sustaining costs in the first-quarter of this year of $1 737/oz and $2 399/oz respectively. This compared with an average gold price over that period of $1 216/oz.

AngloGold Ashanti intends to place on care and maintenance the Kopanang mine, in the Vaal River region, and the Savuka section of the TauTona mine, in the West Wits Region.

Savuka has been in operation for 59 years, and has already been extended 10 years beyond its natural life. Kopanang Mine produced its first gold in 1981, 36 years ago.

It will also evaluate the feasibility of integrating elements of the 60-year old TauTona mine into the neighbouring Mponeng mine.

These will be subject to the outcomes of the consultation process with organised labour groups, facilitated by the Council for Conciliation, Mediation and Arbitration (CCMA).

AngloGold's share price was down -4.29% at R132.23 at the close of the JSE.

Trade union Solidarity warned that this round of retrenchments could be the beginning of a trend in the mining sector due to the negative impact of the Mining Charter.

This threatens to reverse the increase of jobs seen in the mining sectors during the first quarter of the year. Mining jobs grew by 1.8% or 8 000, according to data released by Statistics South Africa.

Responding to Fin24 on Twitter, the department of mineral resources said Minister Mosebenzi Zwane spoke to Venkatakrishnan, who assured him that the retrenchments are not linked to the Charter.

"The Minister will meet with the AngloGold CEO on Friday to be briefed on all the issues."

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

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
18.89
+0.2%
Rand - Pound
23.82
+0.3%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.3%
Rand - Yen
0.12
+0.2%
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