AngloGold Ashanti Reveals Turnaround Plans for Beleaguered Ghana Mine
Substantial efforts are being made to turnaround the fortunes of AngloGold Ashanti’s Obuasi mine in Ghana which has lost more than $1bn since the leading gold producer took it over in 2003.
A string of measures are to be implemented in a bid to save the mine including temporarily shutting down the underground operations and the retrenchment of significant number of the 6,500 employees.
It was reported yesterday that the mine’s new Managing Director, Fred Attakumah had met with community leaders where he gave assurances that despite the many challenges faced, his company still intended on pursuing its commitments to the people and the communities.
One of AngloGold Ashanti’s core values is working hand in hand with local stakeholders and communities within which it operates for the overall good of all.
Attakumah pledged to continue working closely with the community and its leaders and urged for their support in the company’s efforts to rebuild and transform the mine.
He was quoted as saying: “It will take some time to fully put the mine on good stead; but take it from us that AngloGold Ashanti’s short and long term plan is to ensure that Obuasi regains its lost position as investors’ brand of choice.”
Meanwhile, AngloGold Ashanti’s Chief Executive Officer Srinivasan Venkatakrishnan, discussed the turnaround plans at the group’s quarterly briefing earlier this week.
He said the company had been able to plough cash into the mine while gold prices were up but the current slump had changed everything and labour issues now need to be addressed, but ultimately the business proposition was still very attractive.
He was reported as saying: “We have fundamentally come to the conclusion that the employment model and social model have to change. Obuasi is a challenging asset but technically it can be fixed. I think the softer, social issues were underestimated.”
The company is working closely with the government and will look to retrench workers and then re-employ on a sustainable business model. He said it was hoped that if correctly done the turnaround in the mines fortunes would happen.
It is also hoped that the company may find an investment partner for the mine and a number of opportunities are currently being examined.
AngloGold Ashanti’s March quarter results showed gold production had risen by 17 percent year on year at 1.06 million ounces.
Zimbabwe targets £8.8bn mining industry by 2023
Zimbabwe’s government plans to fast-track exploration, evaluation and digitalisation of selected reserved mining areas under the Ministry of Mines and Mining Development as part of wider measures to achieve a £8.8 billion mining industry by 2023, according to a senior government minister.
Information Minister Monica Mutsvangwa said other plans include stopping the issuance of special grants in the reserved areas under the Ministry of Mines and Mining Development until the exploration and evaluation is complete and a robust value addition program for diamonds is implemented.
Mutsvangwa was speaking at a post-cabinet media briefing on December 15.
She adds that the issuance and renewal of special grants for energy should also be based on the financial and technical capacity to value add all types of coal, as well as for ideal exploration of Coal Bed Methane.
For renewal of special grants, consideration should take into account the period the Special Grant has been held as well as plans with milestones for value addition of the special grant, Mutsvangwa says. She adds that the Zimbabwean government expects gold to drive the mining sector in order to achieve the ambitious target, with the precious metal expected to contribute approximately £2.96 billion to the overall target.
Mining is one of Zimbabwe’s major contributors to its economy, alongside agriculture, which is the mainstay. The mining sector accounted for more than 60 percent of the country’s foreign currency receipts in 2019, and contributed around 16 percent to national Gross Domestic Product, the Chamber of Mines says.
The country’s mining industry is focused on a diverse range of small to medium mining operations. The most important minerals produced in Zimbabwe include gold, asbestos, chromite, coal and base metals.
Zimbabwe expects its economy to expand by 7.4 percent in 2021 from a projected contraction of 4.5 percent this year, due to the effects of drought and the COVID-19 global pandemic.
When presenting the 2021 National Budget in November this year, Finance and Economic Development Minister, Professor Mthuli Ncube, said that the mining sector is projected to rebound by 11 percent next year after surviving a COVID-19 induced shock that saw the sector contract by 4.7 percent in 2020. In September, mining bans in national parks were introduced, according to news agencies.
He added that the National Budget would allocate £1 billion towards the operations of the ministry for planning, promotion and exploration, data capturing, and automation, among other key mining processes.
Other factors necessary for the achievement of the £8.8 billion target include a stable macroeconomic environment, policy consistency, and availability of long-term capital to fund mining projects along the entire mineral value chain, the minister said.
Stopping "illicit financial flows" from gold smuggling is another key issue to address, according to media reports.