Johannesburg - South Africa's government has launched audits of mining firms to see how close the industry is to meeting 2014 targets regarding black ownership, social plans and other criteria, AngloGold Ashanti's chief executive said on Wednesday.
Mining companies in the world's top platinum producer have been scrambling for years to meet the targets set out in the government's “Mining Charter”, including one that calls for 26 percent black ownership by 2014.
The charter, which is monitored by the Department of Mineral Resources (DMR), is part of the government and ruling African National Congress's drive to rectify the racial and economic imbalances of apartheid rule which ended two decades ago.
AngloGold's chief executive Srinivasan Venkatakrishnan, who goes by the name Ventkat, told Reuters the DMR had hired auditing company Moloto Solutions to carry out the checks.
“DMR requested this so they could get a flavour across the whole industry about what the industry is doing in terms of mining charter compliance,” Ventkat said.
“They are doing it for all of the companies and started it around November or December. We were one of the first to be audited and we put in a considerable amount of effort to provide them with the information,” he said.
He added that AngloGold has received “very positive feedback” from the ministry but did not elaborate. Social and labour plans, training programmes and the demographic composition of boards and management teams are all part of the charter.
Ventkat was speaking after Africa's top bullion producer reported an almost 40 percent decline in full year earnings for 2013 as the precious metal's spot price posted its biggest drop in three decades.
AngloGold said full-year adjusted headline earnings were $599 million, or 153 US cents per share, compared with $988 million or 255 U.S. cents per share in 2012.
But in the three months to the end of December, adjusted headline earnings amounted to $164 million, a 49 percent improvement on the previous quarter's $110 million.
The company said this was achieved by some non-cash accounting adjustments, including $54 million associated with stockpile and inventory provisions, $17 million associated with operational and redundancies.
AngloGold said it would not declare a final dividend “as it has elected to prioritise its cash flow at this stage for debt repayment and for the completion of existing capital growth projects.”
AngloGold's fall in full-year earnings came despite a 4 percent increase in production to 4.105 million ounces, the company's first annual rise in output in nine years.
But the average gold price over the course of 2013 was 16 percent lower than in the previous year. - Reuters