AngloGold Ashanti's cost cutting measures on track - Ehm
KALGOORLIE (miningweekly.com) – Dual-listed gold miner AngloGold Ashanti was progressing its cost-cutting strategy, executive VP Graham Ehm told delegates at the Diggers & Dealers conference, in Kalgoorlie, Western Australia, on Tuesday.
Ehm noted that during the first quarter of 2014, the company had reduced its all-in-sustaining costs by 22%, compared with the previous corresponding period, while capital expenditure was expected to fall by 31% year-on-year in 2014.
During 2013, AngloGold Ashanti spent some $2-billion on capital expenditure, which resulted in first gold pour at its Tropicana mine, in Western Australia, and its Kibali mine, in the Democratic Republic of Congo, in September last year.
The two new mines were expected to deliver a combined 580 000 oz to AngloGold Ashanti’s production portfolio during 2014.
Meanwhile, the miner would also significantly cut back on its greenfield exploration spend, with AngloGold Ashanti withdrawing from a number of project areas and suspending others. Instead, the miner would focus on its high-yield assets in Colombia, Guinea and Australia.
Ehm added that the Obuasi project, in Ghana, would be subject to significant cost cuts.
“Obuasi has been a considerable challenge for some time, and our improvements there have not been sufficiently extensive or at a pace that they could deal with the recent gold price fall, so a more radical approach is required,” Ehm said.
He noted that the restructuring of the 117-year old operation would involve "significant" redundancies, along with the modernisation of the operation.
“We are not giving up on this 20-million ounce resource,” Ehm said.
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