"We expect a strong finish to the year at our key international operations and continued delivery to tight timelines and budgets on our portfolio-improvement projects,” said AngloGold Ashanti chief executive Srinivasan Venkatakrishnan, adding that the cash was generated despite higher taxes and royalties that the company was currently subjected to in Tanzania. The company said a combination of lower gold price, higher operating costs and the planned increase in reinvestment capital expenditure levels affected the free cash flow in the third quarter.
Venkatakrishnan said the restructuring of the South African operations was on track. In June, AngloGold announced that it would restructure the South African operations in order to return them to profitability. The move, according to the company would entail placing some operations on care and maintenance and would affect as many as 8500 people.
“The statutory consultation process with labour unions relating to the restructuring of its South African business, was concluded on August 28, 2017. "During - and subsequent to - this process, job loss avoidance measures were explored, including voluntary severance packages, transfers, and sale of assets, among others. "A dignified and respectful engagement with the affected employees is currently under way, and we anticipate concluding the bulk of the current restructuring process at TauTona and Savuka by the end of the fourth quarter, as planned,” AngloGold said.
The company last month announced the $300million sale of its Moab Khotsong mine and related assets to Harmony Gold and also the sale of its Kopanang Mine and West Gold Plant to Heaven-Sent Sunshine Investment, which controls the local Village Main Reef operation, for R100m, with the proceeds to be applied to reduce debt.
“The sales remain subject to certain conditions precedent. Once these sales are complete, and the loss-making TauTona mine is placed on care and maintenance, an estimated 13percent of the company’s total production will come from its remaining operations in South Africa,” said AngloGold. Venkatakrishnan said the company’s restructuring did not entail selling the Mponeng mine near Carletonville.
- BUSINESS REPORT