A gold miner working underground at a gold mine in Boksburg. Picture: Lori Waselchuk/AP

Johannesburg - AngloGold Ashanti said first-quarter earnings declined after costs surged 44 percent at its South African operations, which made their first loss since 2012.

Even with no fatalities in the first three months of the year, output from mines in AngloGold’s home country fell 16 percent from a year earlier and all-in sustaining costs increased to $1,327 an ounce, the Johannesburg-based company said Monday in a statement. AngloGold, the world’s third-largest gold miner, received an average price of $1 216 per ounce in the quarter.

“We are closely scrutinising the underperforming areas of our South African operations to restore margins,” CEO Srinivasan Venkatakrishnan said in the statement. “Remedial steps taken to ensure they recover from a difficult start to the year are already bearing fruit.”

The performance of AngloGold’s South African and international operations - spanning Guinea, Tanzania, Brazil and Australia - have diverged over the past two years. Declining ore reserves, rising costs and safety-related stoppages have hampered the South African mines, which are the world’s deepest. Operations elsewhere are mostly newer and open-pit, which means lower costs.

“It’s been a tale of two portfolios,” Venkatakrishnan told reporters on a conference call. Still, the operations shouldn’t be written off “based on one quarter’s loss,” he said of the South African mines, which had a slow post-Christmas ramp up and suffered from heavy rain and temporary low grades. Job cuts would be a last resort to improve performance, he said.

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The biggest contributor to higher costs was the strengthening of the South African rand, Venkatakrishnan said. On a constant-currency basis, costs increased about 7 percent, he said.

AngloGold’s first-quarter adjusted earnings before interest, taxes, depreciation and amortization fell 17 percent from a year earlier, to $314 million. The miner left its full-year forecasts for 2017 unchanged at production of 3.6 million to 3.75 million ounces and all-in sustaining costs of $1 050 to $1 100 per ounce.

The stock declined 1.7 percent to R148 a share at 9:41 a.m. in Johannesburg, while gold was 0.2 percent higher at $1 230.60 an ounce.