Johannesburg - AngloGold Ashanti planned to cut 400 jobs at its Obuasi mine in Ghana by the end of the year to rein in costs as the decline in the gold price eroded profit, the third-largest producer of the metal has said.
The mine employs 4 800 people at present.
“The current cost structure is not appropriate; we are transitioning to a more mechanised operation,” Mark Morcombe, the senior vice-president in charge of the mine, said in an interview last week in Accra.
Output at Obuasi increased 18 percent to 58 000 ounces in the three months to June from the previous quarter. Total cash costs declined 10 percent to $1 560 an ounce.
Spot gold was fixed at $1 306.25 (R13 122) an ounce in London yesterday afternoon.
Morcombe said AngloGold also operated the Iduapriem mine in Ghana, which had a staff of 1 200.
To combat higher costs and the lower metal price, AngloGold suspended its dividend, is cutting spending and exploration, and is retrenching 40 percent of the 2 000 employees in its corporate offices in South Africa.
The company, with 21 operations in 10 countries, reported a loss in the quarter to June after the price of gold fell 23 percent in the period.
Gold output in Ghana, the continent’s largest producer after South Africa, might fall as much as 18 percent this year after the drop in prices prompted some mines to cut production, Ghana Minerals Commission chief executive Ben Aryee said last month.
Gold Fields suspended its Tarkwa and Damang mines in Ghana for a week in April after wildcat strikes halted more than 40 percent of output.
Newmont Mining, which has the Ahafo operation and Akyem project in Ghana, expected about 300 job cuts by the end of the year as part of a “restructuring process”, Adiki Ayitevie, the US company’s regional manager in charge of communications, said in a September 27 interview.
“The situation is quite terrible; we will be losing about 2 000 jobs by June” next year, Prince Ankrah, the general secretary of the Ghana Mine Workers Union, said on Tuesday. “We understand the situation and are negotiating the best and fair deals for all parties.”
The union has more than 20 000 members in the industry.
AngloGold’s shares closed 1.75 percent up at R131.78 on the JSE yesterday. They have lost about half their value so far this year. - Bloomberg