ACCRA – Gold Fields said it is interested in buying AngloGold Ashanti Ltd.’s Iduapriem mine in Ghana as the precious metal producer seeks to increase output from West Africa by about two-thirds to one-million ounces.
Gold Fields is also looking for opportunities to buy mines in Mali, Burkina Faso and Senegal, the Johannesburg-based company’s vice president for West Africa, Alfred Baku, said in an interview in Ghana’s capital, Accra. AngloGold said it doesn’t comment on speculation around its assets.
“We are interested in Iduapriem mine because of its geographical location andnearness to our Tarkwa mine,” Baku said, referring to one of the group’s existing mines in southern Ghana. “We believe that it’s logical for us to develop the two. We will be happy to get it.”
Gold Fields’ Tarkwa is the bigger of the two mines, producing 140 000 oz in the first quarter of this year, compared with Iduapriem’s 46 000 oz. Gold Fields said in February it is looking to buy assets in the regions where it already operates as it tries to increase metal output and lower costs.
AngloGold, the world’s third-largest miner of the metal, has taken the Ghanaian government to an international arbitration panel over its failure to secure its Obuasi mine, which is not currently producing gold, from illegal miners. The problem has not affected Iduapriem and Tarkwa, which is about 150 km south of Obuasi.
“If you look at the challenges that AngloGold is facing in Ghana, there may be some who will be skeptical about such a move,” Sibonginkosi Nyanga, a Johannesburg-based analyst at Momentum S.P. Reid said by phone. “If you look at the Ghanaian environment, it is not easy to operate there.”
Gold Fields reversed gains and dropped as much as 2.4%, trading 1.7% lower at R60.74 per share at 2:55 p.m. in Johannesburg. AngloGold was little changed at R236.11.
AngloGold’s CEO Srinivasan Venkatakrishnan previously said the company wasn’t under any pressure to let go of assets after it sold its Cripple Creek & Victor mine in the US to Newmont Mining Corp. for $820-million last year to pay off debt.
“Iduapriem is a solid, well-run mine that generates cash and has a range of promising project options that will generate additional value for us over time,” Stewart Bailey, a spokesman for Johannesburg-based AngloGold, said in an e-mailed response to questions.