AngloGold Ashanti rejected the possibility that blasting at its mines triggered South Africa’s biggest earthquake since 1969 even as scientists said further investigation was needed before reaching a conclusion.
“The epicenter of the earthquake was significantly further away and down from our current infrastructure so it’s not as a result of blasting done by AngloGold,” Chief executive Srinivasan Venkatakrishnan said. “The magnitude of this scale cannot be induced by any particular act done by one company.”
His comments on the August 5 quake, judged by South Africa’s Council for Geoscience as a 5.5 magnitude tremor, contrast with those of experts who say it’s too early to know the causes. The epicenter was about 10 kilometres below ground near the town of Orkney in North West province, the US Geological Survey said. AngloGold’s mines in the region are the world’s deepest, extending to a maximum of about four kilometers.
The quake may have been triggered by mining, Musa Manzi, a geophysicist at Wits University in Johannesburg, said last week.
“At the moment we can’t tell if it was natural or caused by mining activity,” said Eldridge Kgaswane, a seismologist at the Council for Geoscience. “We’re studying the earthquake and in a month’s time will have a good idea as to the cause.”
The fact that the deepest mine shafts are shallower than the epicenter doesn’t mean mining can be ruled out as a cause, he said. “Blasting in the vicinity of a big fault could have activated seismic activity,” Kgaswane said by phone on Monday.
AngloGold is restarting its Great Noligwa and Moab Khotsong mines, the two affected by the earthquake, it said on Monday in a statement. At three kilometers deep, Moab Khotsong has the longest single shaft of any mine in the world, Mike O’Hare, AngloGold’s chief operating officer for South Africa, told reporters on Monday on a conference call.
“For every view, or one direction, they’ll be a contrary view I’m sure,” Venkatakrishnan said on the call. “Earthquakes happen in areas where there is no mining taking place. It’s more driven around the geology of the place rather than specifically in relation to mining.”
Anglo lost about 30 000 ounces of gold output, which would be valued at $39-million at Monday’s spot price, from the stoppage.
“When we got the news that the epicenter was closer to our mines than any other mines and we had 3 300 people trapped in, that was a terrifying day of our lives,” the chief executive said. “We got the call at 7.30pm that night saying everyone has been accounted for, employees and contractors. That was a relief.”
AngloGold, the world’s third-largest producer of the precious metal, already suffered a second-quarter loss after one-time closing costs related to mines in Ghana and Mali.
The adjusted headline loss was $4-million, after profit of $119-million in the prior quarter, the Johannesburg-based miner said on Monday in a statement. Profit was hit by costs from closing the Yatela mine in Mali and reorganising operations in Ghana.
Anglo sees 1.06-million ounces to 1.09-million ounces of output this quarter at total cash costs of $850 to $890 an ounce. Production last quarter rose 4% to 1.1-million ounces, beating the company’s forecast of 1.02-million to 1.06-million ounces, and all-in costs climbed 7% to $1 114 an ounce.
While the US Geological Survey estimated the quake, which killed one person, at 5.3 magnitude, Kgaswane said the council’s higher figure was more accurate because it had local readings.– Bloomberg