Review of operations

Safety

For AngloGold Ashanti, people come first and consequently the company places the highest priority on safe and healthy practices and systems of work. AngloGold Ashanti will continue to strive to improve its safety performance across its global asset base. The ‘Safety is our first value’ campaign initiated in November 2007 resulted in significant improvements to safety statistics throughout 2008.

In terms of lost-time injuries, the lost-time injury frequency rate (LTIFR) per million hours worked for the year was 7.32 as compared to 8.24 in 2007, an improvement of 11%. Regrettably in 2008, 14 AngloGold Ashanti employees lost their lives (2007: 34 fatalities) which translates into a fatal injury frequency rate (FIFR) for the group of 0.09 per million hours worked for the year (2007: 0.21 per million hours worked).

Operational review

In 2008, gold production totalled 4.98 million ounces compared to 5.5 million ounces in 2007. This decline in production was as a result of lower grades, safety related stoppages and the interruption to the power supply in South Africa and reduced production, as anticipated, at Sunrise Dam in Australia, at Cerro Vanguardia in Argentina as a result of a decline in feed grades associated with agitator problems in the leach tanks, and at Geita as a result of critical plant maintenance. Total group cash cost per ounce for the year was $444 compared to $357 in 2007.

Capital expenditure amounted to $1,201 million (2007: $1,059 million) of which 24% was stay-in-business expenditure and 22% expenditure on ore reserve development, principally at the South African operations. The remaining 54% was expenditure on new project development.

Total project capital was just over $650 million, of which almost $420 million was at Boddington. The other main areas of project spend were the Mponeng VCR project ($45 million), Iduapriem $43 million (mainly the plant expansion), AngloGold Ashanti Brasil Mineração ($24 million), TauTona $21 million (mainly the below 120 level project) and Serra Grande $20 million (the main project being the plant expansion).

Production: by type of mining operation –
2008 (%)

Production: contribution by country – 2008 (%)

Outlook

Gold production for 2009 is forecast to be between 4.9 million and 5.0 million ounces at a total cash cost in a range between $435/oz and $450/oz. This is based on the following exchange rate assumptions: R9.75/ $, A$/$0.68, Brazilian real 2.25/$ and Argentinian peso 3.65/$.

Capital expenditure of around $840 million is scheduled, of which South Africa accounts for 36%, Ghana and Brazil each 18%, and the USA 9%.