AngloGold Ashanti, the world’s third-largest producer of the metal, said it plans to cut 400 jobs at its Obuasi mine in Ghana by end of the year to rein in costs as the decline in the price of bullion erodes profit.
To combat higher costs and the retreat in the bullion price, Johannesburg-based AngloGold suspended its dividend, is cutting spending and exploration and is laying off 40% of the 2 000 employees in its corporate offices. The company, with 21 operations in 10 countries, reported a loss in the second quarter ended June after the metal’s price had dropped 23% in the period, a record quarterly decrease.
Gold output in the West African nation, the continent’s largest producer after South Africa, may fall as much as 18% this year after the drop in prices prices prompted some mines to cut production, Minerals Commission chief executive Ben Aryee said on September 20.
Gold Fields, which mines the metal in Ghana, was forced to temporarily shut its operations in the country in April after illegal strikes that halted more than 40% of the Johannesburg-based company’s output.
Newmont Mining, which has the Ahafo operation and Akyem project in Ghana, sees about 300 job cuts by the end of the year as part of a "restructuring process", Adiki Ayitevie, the 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," Prince Ankrah, general secretary of the Ghana Mine Workers' Union, said by phone on Tuesday. "We understand the situation and are negotiating the best and fair deals for all parties." The organisation represents more than 20 000 employees in the industry.
Output at Obuasi increased 18% to 58 000 ounces in the three months ended June 30 from the previous quarter. Total cash costs declined 10% to $1 560 an ounce. Gold was little changed at $1 287.39 by 8:25am in London. It has dropped 23%this year.
AngloGold also operates the Iduapriem mine in Ghana, which has a staff of 1 200, Morcombe said.
The company’s shares slumped 3.7% to R129.51 by the close in Johannesburg yesterday, extending the plunge this year to 51%. The stock’s retreat matches the fall of Gold Fields in 2013. They are the worst performers in South Africa’s 165-member FTSE/JSE Africa All Share Index after Harmony Gold, which retreated 55%. – Bloomberg