AngloGold struggling to keep flagship mine in Ghana open — report

AngloGold Ashanti (NYSE:AU) (JSE:ANG) (ASX:AGG), the world’s third-largest gold producer, may have to sell or close down its flagship Obuasi gold mine in Ghana, as operations are becoming unsustainable.

The firm’s new CEO, Srinivasan Venkatakrishnan, told Reuters he is looking to make cuts to counter rising costs at the mine, which have more than doubled since 2008, and falling production.

“Obuasi is currently making losses at the operating level … The current cost structure at the operation is clearly unsustainable,” Venkatakrishnan said in an email to Reuters.

Earlier this month, Venkatakrishnan said AngloGold would “more than halve” its corporate costs in 2014, narrowing its exploration and evaluation programmes to just three core regions, in a effort to save a minimum of $482m.

The South African miner, which posted a $2.2bn quarterly loss after a $2.4bn post-tax charge on its assets in response to the historic fall in gold prices, also said it will cut close to 2,000 management jobs, or about 40% of its top positions.

Ghana is the second-largest gold producer in Africa and Obuasi is its largest mine.

Image of Obuasi miner © Jonathan Ernst/World Bank