Sierra Leone woos miners to clean energy with $11 billion plan
Most mining firms rely on their own diesel supplies to extract iron ore, diamonds, rutile and bauxite in the resource-rich country.
AngloGold Ashanti (NYSE:AU) announced Monday it will take a $2.2 billion to $2.6 billion charge as it comes to grips with a lower gold price, sending its already battered stock down another few notches.
ADRs of the Johannesburg-based company tracked lower $2.8% in New York, adding to market value losses for the $4.7 billion company that has deepened this year to over 60%.
AngoGold, the world’s third largest gold producer, said in a statement “over the remainder of 2013 all business plans and associated reserves and resources will be revised and optimised to reflect the lower gold price assumptions, associated mitigation measures and management initiatives to improve margins and cash flow.”
The company reported second quarter gold production of 935,000 oz at a total cash cost of between $900/oz and $920/oz which was in line with expectations, but the AngloGold slashed its full year production guidance in line with a falling gold price and “a move away from marginal ounces”.
The company with 21 operations in 10 countries now expects between 4.0Moz and 4.1Moz for 2013 , which compares to previous guidance of 4.1Moz to 4.4Moz.
The decline comes despite two new mines – Tropicana in Australia and Kibali in the Democratic Republic of Congo – which are scheduled to start production before the end of this year with the DRC mine possibly as soon as October.
The two mines will contribute between 550,000 to 600,000 ounces next year.
AngloGold is also bracing for tough two-yearly wage negotiations in its South African home base.
South Africa’s major gold mining companies through the country’s chamber of mines offered 4% wage increases to the mine workers during negotiations in Johannesburg on Monday.
That’s in response to demands from the two main unions of between 60% and 100%.
