May 17, 2020

Cost Cutting Measures Continue with AngloGold Ashanti

AngloGold Ashanti
Obuasi mine
Ghana
Operations
Admin
2 min
Cost Cutting Measures Continue with AngloGold Ashanti
Mining giant AngloGold Ashanti (JSE: ANG) is continuing to find ways to cut costs as the company reported less than expected earnings in the second quar...

Mining giant AngloGold Ashanti (JSE: ANG) is continuing to find ways to cut costs as the company reported less than expected earnings in the second quarter of 2014.

AngloGold reported a net loss of $28 million for the six months to end June, from a $1.9 billion loss the previous year. The world’s third-largest gold miner confirmed mine closures and layoffs were imminent to cut roughly $500 million from operating costs by December.

As part of its initiative, AngloGold Ashanti will shut down its Obuasi mine in Ghana to restructure the mine into a smaller, more profitable operation.

“Addressing the underperformance at Obuasi remains a key objective for us,” said Fred Attakumah, managing director of AngloGold Ashanti Ghana.

“We’re committed to engaging with the Government of Ghana, our employees and the other important local and regional stakeholders throughout this process, as we work to return this key asset to sustainable, long-term profitability for the benefit of all constituencies."

The company has already sold off its Navachab gold mine in Namibia for $104 million and is working to fix or sell mines or enter joint ventures on other assets.

According to chief executive Srinivasan Venkatakrishnan, the company is not entertaining the idea of an acquisition or merger. “Our focus isn't to rush into M&A but to get the operations on a better footing."

He added, “you can only do your best, you can't guarantee" that there will be no accidents.

Lower gold prices, higher capital spending and labor disputes eclipsed the company’s 17 percent increase in gold production output in Q2.  

Share article

Apr 22, 2021

Lynas revenue jumps 21% as rare earth prices jump

Lynas
RareEarth
WindTurbines
electricvehicles
2 min
Lynas Rare Earths sees revenue boost as selling prices for the key metals hit record highs amid strong demand for neodymium and praseodymium (NdPr)

Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).

NdPr

NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.

The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.

“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.

“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”

Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.

Rare Earths

It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.

Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.

Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.

Share article