AngloGold a step closer to selling loss-making Kopanang mine in S. Africa

Cecilia Jamasmie | September 15, 2017 | 7:41 am Precious Metals Africa Europe Gold

Heaven-Sent previously acquired AngloGold’s Kopanang mine in 2018. (Image courtesy of AngloGold Ashanti)

South African AngloGold Ashanti (JSE:ANG) (NYSE:AU), the world’s third-biggest producer of the precious metal, unveiled Friday that is in talks to sell its Kopanang mine, which was slated to be placed in care and maintenance.

“Based on unsolicited expressions of interest received from a number of parties, AngloGold Ashanti initiated a process to assess the sale of the Kopanang mine,” it said in a statement. It added it had already signed a memorandum of understanding with the selected party, but didn’t provide further details.

Potential sale may save the mine from its planned closure and help keeping a portion of the 8,500 jobs currently on the line.

The decision is part of a restructuring process that includes laying off about 8,500 workers, roughly 30% of the company’s workforce.

The agreement with the unnamed part could result in a sale deal involving the disposal of the 36-year-old, loss-making Kopanang gold mine in South Africa. Such transaction may save the mine from its planned closure and help keeping a portion of the jobs currently on the line.

In the six months to the end of June, Kopanang’s gold output fell by 6% to 44,000 ounces, while its all-in sustaining costs shot up 26% to $1,682 an ounce.

Together with TauTona, the two operations became the most expensive ones in AngloGold’s South African division, increasing the average all-in sustaining cost to $1,259 an ounce.

Both mines are a clear example of the challenges the company is facing in its home country —rising costs and depleted ore reserves.