South Africa’s largest gold-miner, AngloGold Ashanti, is looking to achieve cost savings of more than $80-million (R491-million) at its South African gold mines this year, the company’s head of South African operations, Robbie Lazare, said on Tuesday.
AngloGold Ashanti previously budgeted on savings of $41,4-million at its South African operations, but given the cost margin squeeze at these operations, the group will seek to double its previous target, he said.
AngloGold Ashanti is looking to savings of $27,2-million in 2006 and $34,7-million in 2007.
Savings are budgeted to come from operational efficiencies, procurement, restructuring and other areas.
The process of cutting costs will also see AngloGold Ashanti’s South African mines reduce their costs to below R60 000 per kilogram in the third quarter during the course of 2005, from close to R62 000 per kilogram in the first quarter.
Regarding salary negotiations with management and the group’s supervisors in South Africa, the parties have settled on an increase of 5,5%.
Towards the end of May, negotiations with the National Union of Mineworkers are set to start. Lazare said he expects the negotiations to be “tough”.
AngloGold Ashanti will look to settle for a wage increase of CPIX, which was 3,6% year-on-year to March 2005. The group “could live with” an increase of 5% to 5,5%, but an increase of 2% “would be even better”. — I-Net Bridge