Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Ghanaian President Nana Akufo-Addo pledged that the incursion of illegal miners which forced AngloGold Ashanti Ltd. to evacuate its Obuasi operation won’t be repeated.
Speaking at a ceremony that marked the reopening of the century-old mine in the south of the country, Akufo-Addo said Tuesday that the “forceful encroachment on the concession of the company” was over, according to an emailed copy of his speech. “The sequence of events that led to the closure of the mine will not recur under the watch of this government,” he said.
AngloGold will invest $450 million to $500 million in the initial stages of Obuasi’s redevelopment after it curtailed operations in 2014 because of heavy financial losses. The Johannesburg-based company was working on plans to redesign the mine when it was overrun by informal miners in 2016.
In the last month of the same year, Akufo-Addo won power when he defeated former President John Mahama in elections. Ghana is Africa’s biggest gold producer after South Africa, with operators including AngloGold, Gold Fields Ltd. and Newmont Mining Corp. owning assets in the country.
The redevelopment will deliver its first gold by the end of the year, AngloGold said in a statement published in Accra-based Business and Financial Times newspaper. Output in the first 10 years will average 350,000 ounces to 450,000 ounces a year, it said.
Total cash costs for the project are expected to average $590 to $680 an ounce, it said.
(By Ekow Dontoh)
