- AngloGold Ashanti Sells Some South Africa Mines to Cut Losses
AngloGold Ashanti Ltd. agreed to sell mines in South Africa to reduce exposure to high-cost assets in its home country and free up cash for more profitable, international operations.
The world’s third-largest gold miner will sell Moab Khotsong, which incorporates the Great Noligwa mine, to Harmony Gold Mining Co. for about $300 million and Kopanang to Heaven-Sent SA Sunshine Investment Co. for 100 million rand ($7.4 million), the Johannesburg-based company said in a statement on Thursday.
AngloGold’s South African mines have dragged down the company’s performance in recent quarters as aging infrastructure, reserve depletion, and accidents have both raised costs and reduced production. After the sales, the company will still own the West Wits operations near Johannesburg and some waste-dump operations.
“This transaction is in line with our capital allocation strategy and our aim to effect the improvement of our global portfolio,” Chief Executive Officer Srinivasan Venkatakrishnan said in a statement.
For Harmony, the acquisition will add 250,000 ounces a year at an all-in sustaining cost of less than $950 an ounce and increase the company’s average mining grade to 5.7 grams a ton. Harmony CEO Peter Steenkamp has spoken publicly of the need for a major acquisition to offset aging mines scheduled to close elsewhere in its South African portfolio.
Heaven Sent, which is buying the unprofitable Kopanang, is a Hong Kong-based company that owns 74 percent of South Africa’s Village Main Reef Ltd. and operates the Tau Lekoa mine in the Vaal River region, AngloGold said.
