Fin24

AngloGold profits slump 49% on strikes

2012-11-08 09:03

Johannesburg - Mining titan AngloGold Ashanti [JSE:ANG] saw earnings slump 49% in the third quarter, due largely to deadly labour unrest in South Africa, the firm reported on Thursday.

The world's third largest gold producer said profits fell to $235m versus $457m a year before, amid strikes that froze production at the company's six South African mines.

It also reported that operations were back to normal at all but one of its facilities.

"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," AngloGold Ashanti Chief Executive Mark Cutifani said.

"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."

Amid fears that the strike will force mining firms to shed jobs, the firm recently cancelled a major mechanisation project at one South African mine to "improve the operation's flexibility".

The company also reported "major growth projects in Australia, the United States and the Democratic Republic of Congo."

Comments
  • ptolemy.leonardo - 2012-11-08 09:24

    What worries me most about this is the question: How much longer can our mines be profitably mined? How much of the present troubles are a consequence of miners having to chase precious metals under increasingly difficult conditions? Surely the mineral wealth of South Africa cannot last forever and what plans are being made to compensate for a diminished role of the mining industry in our economy?

  • gavin.allchurch1 - 2012-11-08 09:34

    Two issues here.. lower tax revenue because of this.. and retrenchments that will undoubtedly happen.... the key words here are.."lean" ...and "deliver strong returns"... none of these phrases will include mass hiring plans.... more like the opposite...

  • strikeback.strikeback - 2012-11-08 11:07

    Mining is and will always be an expensive industry. Profits has to be made, to keep investors interested and investments flowing in. Mechanisation could increase profits, but despite this, mines keep workers in their employ and contribute greatly to the economy. If and when the mineral wealth of the country is depleted thousands of people will be unemployed. To create employment, we have to start sooner than later, by stimulating the entrepreneurial spirit and also manufacturing. Countries like China entered the world economy as manufacturers for most countries, based on affordable labour. China has since evolved into a market leader and remuneration of Chinese workers are improving. We need affordable, skilled workers to compete globally in manufacturing. Most products manufactured locally, can be imported at lower prices and we need strict import controls to safeguard our local produce. Stop allowing excessive wage increases and take control over the workforce. Spend time and money on creating an educated and skilled workforce. Start at school level and bring discipline back. Ensure scholars and teachers attend school. And please, deliver their books on time. In time for the year to start, not the final exam of the year. www.strikeback.co.za

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