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

Jun 28 2017 19:58


Company Data

ANGLOGOLD ASHANTI LIMITED [JSE:ANG]

Last traded 110
Change -1
% Change -1
Cumulative volume 646826
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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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."

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anglo gold ashanti  |  jobs  |  labour  |  mining
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