Earnings in AngloGold Ashanti have declined to $622 million (R9.4 billion) after experiencing a “challenging 2021” period characterised by Covid-19 disruptions, lower grades and the temporary suspension of production at a key African mine.
Basic earnings for the year period to the end of 2021 at $622m were significantly lower compared to the $946m realised in 2020, the company said on Tuesday.
This was after factoring in once-off expenses that amounted to $87m and despite an 8 percent decline in cash costs per ounce from $1 003 in the first half of 2021 to $925 during the second half. Cash costs per ounce, however, remained significantly higher compared to the company’s 2020 gold production costs of about $790 per ounce.
This has been attributed to lower gold production, drawdown of ore stockpiles at some operations and “higher operating costs and inflationary” pressures during the period. Subsequent to this, AngloGold Ashanti chief executive (CEO), Alberto Calderon, is now reviewing the assets of the company to boost its cost competitiveness.
“AngloGold Ashanti experienced a challenging 2021, including the ongoing Covid19 pandemic and its impact on production and costs, lower realised grades across certain operations during the reinvestment phase and the temporary suspension of underground mining at Obuasi gold mine,” the company said.
These operating headwinds worsened an already difficult operating framework emanating from “elevated capital expenditure” as it invested further across its portfolio of assets in “increased conversion of Mineral Resource to Ore Reserve, waste stripping at open pit mines and improved rates of underground” development.
Output from AngloGold Ashanti’s operations amounted to 1.419 million ounces for the full year, compared to 1.603 million ounces a year earlier on the back of reinvestment programmes for regional operations.
At the key Obuasi mine, where underground mining was temporarily suspended from May to October, production was 108 000 ounces. Output from the Geita mine in Tanzania sagged to 486 000 ounces compared to 623 000 ounces a year earlier.
In the Democratic Republic of Congo (DRC), the Kibali mine raised production to 365 000 ounces from 364 000 ounces attributable to the “good overall performance from the metallurgical plant, with increased tonnage during 2021, driven by higher open pit tonnes mined” as compared to 2020.
Total cash costs incurred from the DRC mine, however, increased mainly as a result of lower open-pit recovered grades, unfavourable movements in stockpiles and higher royalties due to an increase in the gold price received.
After a challenging 2021 period, AngloGold Ashanti has also announced that chief finance officer (CFO) Christine Ramon is voluntarily leaving the company in June. Ramon was appointed CFO and executive director for the company in October 2014.
Her tenure “was marked by sharp debt reduction, improved liquidity and careful allocation of capital”, the company said, also highlighting how she had served as interim CEO during tough pandemic times. Ramon lost her husband to Covid-19 during the period under review.
She led this company as interim CEO through a challenging operating environment and during an exceptionally difficult time for her personally,” said AngloGold Ashanti chairperson, Maria Ramos.
In intraday trade the share was 0.05 percent lower at R334.72, but up 61.72 percent in three years.
BUSINESS REPORT ONLINE