AngloGold Ashanti, a global gold mining company with 21 operations on 4 continents, employed 63,364 people, including contractors, and produced 4.6Moz of gold in 2009.
The group’s operations by regional division are:
In addition, the company conducts a focused worldwide exploration programme. In the course of mining and processing the ore mined, silver, uranium oxide and sulphuric acid occur as by-products at the Argentinean, South African and Brazilian operations respectively.
AngloGold Ashanti’s focus on safety continued in 2009. The company’s approach to managing risk and enabling employees to work safely in a supportive work environment is based on a new conversational culture, where many voices participate and make a meaningful contribution to designing the way in which the company works and protects itself from both known and unexpected risks. The success of this approach depends on four key factors – leadership, engagement, systems, and learning. For these factors to be effective, they need to occur in an enabling environment. The focus of the safety transformation process is on moving the organisation towards a culture of engagement and learning that stimulates awareness of the nature of risk.
It is with much regret that the company reports that 16 employees lost their lives at work in 2009 (2008: 14 fatalities). While it is particularly disappointing that this figure indicates a relapse from the prior year, AngloGold Ashanti remains focused on decreasing the long-term trend in fatal accidents.
Expressed in terms of safety performance statistics, the fatal injury frequency rate (FIFR) was 0.10 per million hours worked, compared with 0.09 in 2008 and 0.21 in 2007. The lost-time injury frequency rate (LTIFR) in 2009 was 6.57 per million hours worked compared with 7.32 in 2008 and 8.24 in 2007.
In 2009, AngloGold Ashanti produced 4.60Moz of gold, a decrease of 8% on the 4.98Moz produced in 2008. This was in line with the revised production forecast.
This year-on-year decline in gold production was a result of:
Group total cash costs for the year increased from $444/oz to $514/oz. This was mainly due to lower production volumes and grade, ore stockpile inventory draw downs and inflation.
Total cash cost increases varied by region, with the South African operations under the most pressure. Here, a 9.7% wage increase and a 31.3% increase in electricity tariffs – both effective from mid-year – together with the relative strength of the local currency, compounded by a 14% drop in production, resulted in a cash cost increase of 29% for the South African operations.
Given the focus on optimising operational performance and maintaining costs, the group continued to invest significantly in capital expenditure. Capital expenditure for the year amounted to $1,027m (2008: $1,201m), of which 26% ($264m) was stay-in-business expenditure, 34% ($347m) was spent on Ore Reserve development, principally at the South African operations and 40% ($416m) was spent on new project development, primarily at:
Safety remained the highest priority for the group and the performance of each operation is detailed in separate discussions below. In addition, given the group’s move towards integrated reporting, significant issues related to sustainable development are dealt with briefly in these operational discussions. For a more detailed review of these issues, see the Sustainability Review 2009.
Gold production in 2010 is expected to be between 4.5Moz and 4.7Moz. Given that the relative strength of local operating currencies is anticipated to continue, total cash costs are expected to remain under pressure, ranging between $590/oz and $615/oz. AngloGold Ashanti’s exchange rate assumptions for 2010 are: R7.70/$, A$/$0.93, Brazilian real 1.70/$ and the Argentinean peso 3.90/$.
Capital expenditure is estimated at $1bn to $1.1bn for 2010.