/ 7 August 2013

AngloGold to cut 2 000 management jobs

AngloGold Ashanti, the world’s third-largest producer of gold, plans to cut about 2 000 management jobs, or about 40% of its management positions, to reduce costs, its chief executive Srinivasan Venkatakrishnan said on Wednesday.

Venkatakrishnan told a media conference that the job cuts are part of a larger plan aimed at saving the company as much as $482-million next year.

On Wednesday AngloGold Ashanti also reported a loss for the second quarter and suspended its dividend after bullion had a record three-month decline.

The adjusted headline loss, which excludes one-time transactions, was $135-million in the three months through June, from a profit of $113-million in the previous quarter, the Johannesburg-based company said in a statement on Wednesday.

“The board elected to pass on the quarterly dividend given the current market conditions and will review this decision again at year-end,” AngloGold said in the statement. “The company will also revert to a bi-annual dividend schedule.”

Cutting capital expenditure
AngloGold, which has 21 operations in 10 countries, is cutting capital expenditure and slowing output at higher-cost mines as it adjusts to a gold price that has tumbled almost 22% this year.

Total cash costs were $898 an ounce in the second quarter. AngloGold’s breakeven costs were $1 634 an ounce in the first quarter, compared with an average gold price of $1 633 an ounce, according to David Davis of SBG Securities in Johannesburg. 

The average gold price was $1 417 in the second quarter, according to data compiled by Bloomberg.

AngloGold produced 935 000 ounces of gold in the second quarter, in line with the forecast published July 15, and 4% more than in the first three months of the year. Production will total between 4-million and 4.1-million ounces this year, down from previous forecast of 4.1-million ounces to 4.4 million ounces, the company said in July. – Bloomberg, with additional reporting by Reuters