Management approach

AngloGold Ashanti’s approach to the financial and economic performance of the group is reported in the Annual Financial Statements, and in the Economic Performance section of our Group-level Report.

Details of 2008 commitments in respect of economic performance and 2009 delivery against these are set out below:

2008 – Commitment	2009 – Delivery
Share overhang
Eliminate the overhang created by Anglo American plc’s plan to exit their investment in AngloGold Ashanti.	The 11.3% stake was sold to Paulson & Co. during March.
Rebuilding financial capacity
Improve balance sheet and reduce debt to create a platform for growth. Reduce hedge book. Sharpen focus on capital management. Increase operating cash flow leverage.	Net debt reduced by 32% to $868m. Hedge book reduced by a further 35% to 3.9Moz by end 2009, reducing discount on realised gold price and overall financial risk. Operating cash flow for the year of $502m. Return on net capital employed of 17.7% achieved (2008: 2.6%).
Operating delivery initiative
Begin implementation of Project ONE, the overarching business improvement initiative that will drive AngloGold Ashanti toward achieving five-year targets on safety, productivity and returns.	Phased implementation at the Mponeng plant, Geita mine and plant, Siguiri plant, AngloGold Ashanti Brasil Mineração mines and plant, Sunrise Dam plant and Savuka plant. Detailed plans drawn for rollout to 11 sites in 2010, including: Mponeng, Kopanang mine and plant, TauTona and Moab Khotsong mines; Iduapriem plant and Obuasi mine and plant; Cerro Vanguardia and Serra Grande mine and plants; CC&V mine; Navachab mine and plant; Great Noligwa uranium plant.
Address critical operating challenges, in Argentina, Ghana and Tanzania projects.	Cerro Vanguardia production increased 25% and costs declined 42%; credible growth plan in place from underground and heap leach. Obuasi production increased 7% and costs declined 0.5%; Obuasi made positive contribution for first time in five years; practicable plan in place to secure long-term future of deposit. Geita plan in place to remediate operating performance. Costs on declining trajectory.
Optimising leadership and skills base
	Human resources policy development centralised to ensure alignment and focus on delivering the group strategy. The System for People, the human resources component of Project ONE, was finalised and its rollout across the company began in 2009. Management changes made at underperforming operations. Ensured those with appropriate skills were appointed at each level of the organisation.
Turning around safety performance
Strive to eliminate fatalities entirely and to reduce all injury rates by 20% in 2009 – the long-term goal is a 70% reduction in these rates by 2014.	Lost-time injury frequency rate (LTIFR) improved10% to 6.57 per million hours worked. Safety Transformation Blueprint developed to effect quantum improvement in safety after 16 fatalities reported in 2009. Launch of this safety initiative is planned for April 2010.
Pursuing growth
Drive organic growth at existing assets, through greenfields exploration, brownfield expansion and by acquisitions where these add value.	Ore Reserve increased by 5% to 71.4Moz after adjusting for Boddington. Successfully completed pre-feasibility study on Tropicana Project and commenced with bankable study due for completion in 2010. Conducted successful exploration campaign to confirm mineralisation at São Bento deposit in Brazil. Acquired an effective 45% of the Kibali gold project, in the Democratic Republic of the Congo. Exploration programme expanded and revitalised with new greenfields exploration taking place in Canada, Argentina, Brazil, Guinea, Gabon, Egypt, Saudi Arabia, Eritrea and Solomon Islands. Marine exploration joint venture with De Beers. Delays continued in obtaining final permission to continue drilling at La Colosa site in Colombia.

Performance indicators:

The following (core) and (additional) indicators are reported in compliance with GRI. In addition, where the response is applicable to the ICMM principles or the principles of the UN Global Compact, this is illustrated by their respective logos and . Indicators that have been verified by PWC are indicated with a .

Aspect: Economic performance

EC1 (Core)

Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

Economic value added statement for the year ended 31 December (million US$)

	2009	%	2008	%
Economic value generated
Gold sales and by-product income	3,862	98	3,677	97
Interest received	54	1	66	2
Profit from sale of assets	49	1	55	1
Profit from sale of investments	–	–	2	–
Total economic value generated	3,965	100	3,800	100
Economic value distributed
Operating costs (1)	1,296	33	1,552	41
Employee salaries, wages and other benefits	1,117	28	986	26
Payments to providers of capital	184	5	155	4
– Finance costs and unwinding of obligations	139	4	114	3
– Dividends	45	1	41	1
Payments to governments
– Current taxation	164	4	92	3
Community and social investments (2)	11	–	8	–
Total economic value distributed	2,772	70	2,793	74
Economic value retained	1,193	30	1,007	26

(1)	Operating costs are lower in 2009 due to exchange gains of $112m (2008: $4m), favourable metal inventory movements of $63m (2008: unfavourable $16m), and share of equity accounted investments' profit of $94m in 2009 (2008: loss of $138m).
(2)	Community and social investments exclude equity-accounted joint ventures.

EC2 (Core)

Financial implications and other risks and opportunities for the organisation’s activities due to climate change.

A comprehensive risk assessment was carried out during 2008/9 to determine the level of risk to which the company is exposed as a result of climate change. Various risk categories, including financial and investment risk, risk owing to government policies and legislation, and physical risk, including local community vulnerabilities, were considered. Key points include proactively assessing these risks and how being proactive could be used to competitive advantage. Also considered was the fact that, while regulatory requirements will become stricter in the near future, there will be differences in regulatory requirements across jurisdictions, which may in turn present both opportunities and difficulties.

Some of the regulatory risks already result in increased compliance costs for AngloGold Ashanti’s power suppliers, which costs are passed through to the company in the form of price increases. For instance, in South Africa since 2009, AngloGold Ashanti pays a levy of R0.02 per kWh for electricity generated from fossil fuels. These levies may increase over time and additional levies may be introduced in the future in South Africa and other countries.

In addition, AngloGold Ashanti’s operations could be exposed to a number of physical risks from climate change, such as increased rainfall, reduced water availability, higher temperatures and extreme weather events. Events or conditions such as flooding or inadequate water supplies could disrupt the company’s mining and transport operations, mineral processing and rehabilitation efforts, and could increase health and safety risks on site. In addition, such events or conditions could have adverse effects such as increased incidence of pests and disease prevalence in the company’s workforce and in communities in close proximity to the company’s operations.

See www.aga-reports.com/08/climate-change.htm and www.anglogoldashanti.co.za/Sustainability/Reports/CDP+Questionnaire.htm for more information.

EC3 (Core)

Coverage of the organisation’s defined benefit plan obligations.

All permanent employees participate in some form of retirement funding scheme to which the company makes a contribution. In some cases this is the legislated contribution to the country’s social security scheme, while in others it is a contribution to a private or company-run scheme. The specific nature of the benefits and contributions varies from region to region. These benefits are funded primarily on a defined contribution basis, with a very small percentage of employees on defined benefit schemes. Defined benefit schemes are closed to new members, with new employees participating in defined contribution schemes. Funding for the liabilities resulting from the defined benefit schemes is provided for by the company on an ongoing basis.

Pension and post-retirement benefits ($ million)	2009	2008
Defined benefit plans The group has made provision for pension, provident and medical schemes covering substantially all employees. The retirement schemes consist of the following:
AngloGold Ashanti Limited Pension Fund (asset) liability	(5)	11
Post-retirement medical scheme for AngloGold Ashanti Limited South African employees	147	113
Other defined benefit plans (1)	10	11
Total post-retirement obligation	152	135
(1) Other defined benefit plans comprise the following:
– Ashanti Retired Staff Pension Plan	–	1
– Obuasi Mines Staff Pension Scheme	9	9
– Post-retirement medical scheme for Rand Refinery employees (asset)	(2)	(2)
– Retiree Medical Plan for North American employees	2	2
– Supplemental Employee Retirement Plan (SERP) for North America (USA) Inc. employees	1	1
– Retiree Medical Plan for Nufcor South Africa employees (asset)	–	–
	10	11

AngloGold Ashanti Limited Pension Fund

The plan is evaluated by independent actuaries on an annual basis as at 31 December of each year. The valuation as at 31 December 2009 was completed at the beginning of 2010 using the projected unit credit method. In arriving at their conclusions, the actuaries took into account reasonable long-term estimates of inflation, increases in wages, salaries and pensions as well as returns on investments.

A formal statutory valuation is required by legislation every three years. The previous statutory valuation had an effective date of 31 December 2005, and was completed in June 2006. The statutory valuation effective 31 December 2008 is in the process of being finalised and should be submitted to the Registrar of Pension Funds before 31 March 2010. The next statutory valuation of the Fund will have an effective date no later than 31 December 2011.

All South African pension funds are governed by the Pension Funds Act of 1956 as amended.

Information with respect to the AngloGold Ashanti Limited Pension Fund is as follows:

Benefit obligation	269	199
Fair value of plan assets at end of year	274	188
Funded (unfunded) status at end of year	5	(11)
Contributions (percentage of employee salary)
– Employer	12.5% – 15%
– Employee	7.5% – 11%

Investment policy

The Trustees have adopted a long-term horizon in formulating the Fund’s investment strategy, which is consistent with the term of the Fund’s liabilities. The investment strategy aims to provide a reasonable return relative to inflation across a range of market conditions. The Trustees have adopted different strategic asset allocations for the assets backing pensioner and active member liabilities. The strategic asset allocation defines what proportion of the Fund’s assets should be invested in each major asset class. The Trustees have then selected specialist investment managers to manage the assets in each asset class according to specific performance mandates instituted by the Trustees. The Trustees have also put in place a detailed Statement of Investment Principles that sets out the Fund’s overall investment philosophy and strategy. Fund returns are calculated on a monthly basis, and the performance of the managers and Fund as a whole is formally reviewed by the Fund’s Investment Sub-Committee at least every six months.

Post-retirement medical scheme for AngloGold Ashanti Limited South African employees

The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants.

The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performed as at 31 December 2009.

Information with respect to the AngloGold Ashanti Limited Post-retirement medical scheme is as follows:

Unfunded benefit obligation

(147)

(113)

Other defined benefit plans

Other defined benefit plans include the Ashanti Retired Staff Pension Plan, the Obuasi Mines Staff Pension Scheme, the Post-retirement medical scheme for Rand Refinery employees, the Retiree Medical Plan for North American employees, the Supplemental Employee Retirement Plan for North America (USA) Inc. employees and the Nuclear Fuels South Africa (NUFCOR) – Retiree Medical Plan for Nufcor South Africa employees.

Information in respect of other defined benefit plans for the year ended 31 December 2009 has been aggregated and is as follows:

Benefit obligation	18	17
Fair value of plan assets at end of year	8	6
Unfunded status at end of year	(10)	(11)

Defined contribution funds

Contributions to the various retirement schemes are fully expensed during the year in which they are made and the cost of contributing to retirement benefits for the year amounted to $53m (2008: $49m).

Australia (Sunrise Dam)

The region contributes to the Australian Retirement Fund for the provision of benefits to employees and their dependants on retirement, disability or death. The fund is a multi-industry national fund with defined contribution arrangements. Contribution rates by the operation on behalf of employees varies, with minimum contributions meeting compliance requirements under the Superannuation Guarantee legislation. Members also have the option of contributing to approved personal superannuation funds. The contributions by the operation are legally enforceable to the extent required by the Superannuation Guarantee legislation and relevant employment agreements. The cost to the group of all these contributions amounted to $4m, and in 2008, which included the Boddington joint venture, of $3m.

Ghana and Guinea (Iduapriem, Obuasi and Siguiri)

AngloGold Ashanti Limited's mines in Ghana and Guinea contribute to provident plans for their employees which are defined contribution plans. The funds are administered by Boards of Trustees and invest mainly in Ghana and Guinea government treasury instruments, fixed term deposits and other investments. The cost of these contributions was $4m (2008: $4m).

Namibia (Navachab)

Navachab employees are members of a defined contribution provident fund. The fund is administered by the Old Mutual insurance company. Both the company and the employees contribute to this fund. The cost to the group of all these contributions amounted to $1m (2008: $1m).

North America (CC&V)

AngloGold Ashanti Limited USA sponsors a 401(k) savings plan whereby employees may contribute up to 60% of their salary, of which up to 5% is matched at a rate of 150% by AngloGold Ashanti Limited USA. AngloGold Ashanti Limited USA's contributions were $2m (2008: $2m).

South Africa (Great Noligwa, Kopanang, Moab Khotsong, Mponeng, Savuka, Tau Lekoa and TauTona)

South Africa contributes to various industry-based pension and provident retirement plans which cover substantially all employees and are defined contribution plans. These plans are all funded and the assets of the schemes are held in administrated funds separately from the group's assets. The cost of providing these benefits amounted to $41m (2008: $36m).

South America (AngloGold Ashanti Brasil Mineração, Cerro Vanguardia and Serra Grande)

The AngloGold Ashanti Limited South America region operates defined contribution arrangements for their employees in Brazil. These arrangements are funded by the operations (basic plan) and operations/employees (optional supplementary plan). A PGBL (Plano Gerador de Beneficio Livre) fund, similar to the American 401(k) type of plan was started in December 2001. Administered by Bradesco Previdencia e Seguros (which assumes the risk for any eventual actuarial liabilities), this is the only private pension plan sponsored by the group. Contributions amounted to $1m (2008: $3m).

Employees in Argentina contribute 11% of their salaries towards the Argentinian pension fund. The company makes a contribution of 17% of an employee's salary on behalf of employees to the same fund.

Tanzania (Geita)

Geita does not have a retirement scheme for employees. Tanzanian nationals contribute to the National Social Security Fund (NSSF) or the Parastatal Provident Fund (PPF), depending on the employee’s choice, and the company also makes a contribution on the employee’s behalf to the same fund. On leaving the group, employees may withdraw their contribution from the fund. From July 2005, the company has set up a supplemental provident fund which is administered by the PPF with membership available to permanent national employees on a voluntary basis. The company makes no contribution towards any retirement schemes for contracted expatriate employees. The company contributes to the NSSF on behalf of expatriate employees. On termination of employment the company may apply for a refund of contributions from the NSSF.

EC4 (Core)

Significant financial assistance received from government.

Governments (or their provincial representatives) are shareholders in a number of operations or in the company itself:

• In Argentina, the Province of Santa Cruz has a 7.5% interest in Cerro Vanguardia.
• The Government of Guinea holds a 15% stake in the Siguiri mine.
• The Government of Mali holds an interest of 20% in each of the Morila, Sadiola and Yatela mines.
• The Government of Ghana holds a 3% interest in AngloGold Ashanti.

AngloGold Ashanti is a member of the Extractive Industries Transparency Initiative (EITI) and supports the EITI’s request for transparency in the disclosure of payments to government and receipts from governments.

The following payments were made to governments (on a country basis) by AngloGold Ashanti, or its subsidiaries or the joint ventures that the company manages, during the year under review:

Argentina ($ 000)	2009	2008 Restated
Dividends paid to the government	750	888
Taxation paid	–	4,368
Withholding tax (STC, royalties, etc)	16,766	13,536
Other indirect taxes and duties	1,631	1,599
Employee taxes and other contributions**	5,675	2,869
Property tax	6	3
Other***	11,764	8,186
Total	36,592	31,449

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF
***	Tax on exports

Australia ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid*	31,398	43,229
Withholding tax (STC, royalties, etc)	11,657	12,860
Other indirect taxes and duties	–	–
Employee taxes and other contributions**	11,327	9,556
Property tax	–	–
Other	–	–
Total	54,382	65,645

*	Includes capital gains tax for 2009
**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Brazil ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid *	37,102	47,815
Withholding tax (STC, royalties, etc)	6,821	6,735
Other indirect taxes and duties	3,478	1,633
Employee taxes and other contributions**	28,635	24,451
Property tax	1,129	1,583
Other (includes tax on vehicle ownership)	1,188	645
Total	78,353	82,862

*	Includes capital gains tax for 2009
**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Colombia ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid	233	277
Withholding tax (STC, royalties, etc)	1,346	1,171
Other indirect taxes and duties	79	239
Employee taxes and other contributions**	3,910	3,432
Property tax	1	–
Other (tenement fees)	4,048	2,934
Total	9,617	8,053

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

DRC ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid	1,957	1,925
Withholding tax (STC, royalties, etc)	100	147
Other indirect taxes and duties	–	–
Employee taxes and other contributions**	120	102
Property tax	–	–
Other	–	–
Total	2,177	2,174

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Ghana ($ 000)	2009	2008 Restated
Dividends paid to the government	1,425	1,379
Taxation paid	7,233	1,912
Withholding tax (STC, royalties, etc)	20,027	17,504
Other indirect taxes and duties	5,851	9,266
Employee taxes and other contributions**	20,218	11,570
Property tax	482	49
Other	173	399
Total	55,409	42,079

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Guinea ($ 000)	2009	2008 Restated
Dividends paid to the government	–	1,500
Taxation paid	37,881	–
Withholding tax (STC, royalties, etc)	17,137	30,069
Other indirect taxes and duties	3,180	1,490
Employee taxes and other contributions**	5,052	3,332
Property tax	–	–
Other	317	1,230
Total	63,567	37,621

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Mali ($ 000)	2009	2008 Restated
Dividends paid to the government	50,516	38,000
Taxation paid	66,409	42,075
Withholding tax (STC, royalties, etc)	20,809	21,750
Other indirect taxes and duties	8,914	2,359
Employee taxes and other contributions**	5,113	9,382
Property tax	369	–
Other	1,166	4,579
Total	153,296	118,145

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Namibia ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid	2,195	5,042
Withholding tax (STC, royalties, etc)	1,911	1,789
Other indirect taxes and duties	–	–
Employee taxes and other contributions**	2,660	2,013
Property tax	67	–
Other***	–	392
Total	6,833	9,236

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF
***	Land tax

South Africa ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid	17,740	6,468
Withholding tax (STC, royalties, etc)	–	–
Other indirect taxes and duties	–	–
Employee taxes and other contributions**	92,130	82,768
Property tax	2,191	1,870
Other (Skills development levy)	5,646	–
Total	117,707	91,106

**	Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Tanzania ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid	1,284	715
Withholding tax (STC, royalties, etc)	10,014	6,966
Other indirect taxes and duties	34,834	18,251
Employee taxes and other contributions**	12,947	12,165
Property tax	–	–
Other***	664	369
Total	59,743	38,466

** Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

***Comprises annual road levy to the Geita district, forest clearance fees and airport taxes for 2008

USA ($ 000)	2009	2008 Restated
Dividends paid to the government	–	–
Taxation paid	(1,895)	300
Withholding tax (STC, royalties, etc)	–	–
Other indirect taxes and duties	–	–
Employee taxes and other contributions**	4,270	3,795
Property tax	1,168	840
Other (Production mine tax)	1,933	1,450
Other (Severance tax)	1,100	1,328
Total	6,576	7,713

** Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF

Group	2009	2008 Restated
Dividends paid to the government	52,691	41,767
Taxation paid	201,537	154,126
Withholding tax (STC, royalties, etc)	106,588	112,527
Other indirect taxes and duties	57,967	34,837
Employee taxes and other contributions**	192,057	165,435
Property tax	5,413	4,345
Other	27,999	21,512
Total	644,252	534,549

Notes

The 2008 figures have been restated in terms of revised classifications, the addition of payments for certain exploration sites and VAT payments are excluded as in most instances these are reimbursed.

There is a general explanation to the increase that comes from the higher invested value in 2008 versus 2009 that brings higher volume in associated withholdings.

The following instances of tax exemptions of reduced taxation rates are reported:

Operation	Description of tax	Standard rate	Rate paid by business unit	Legal basis of tax concession
Argentina
Cerro Vanguardia	Income tax rate for corporations	35%	30%	At the time that Cerro Vanguardia was allocated a tax rate (as part of the fiscal stability programme which is valid for 30 years), the corporate tax rate was 30%
	Tax on financial payments	0.6% on debits	0%	Did not exist when fiscal stability programme was awarded
		0.6% on credits
	Import duties	Varied, dependent on type of goods imported	0%	In line with Argentinian Mining Investment Law (24196), mining companies registered under this special fiscal regime are exempt
	Presumed minimum income tax	1%	0%	Mining companies are exempt from this tax
Brazil Brasil Mineração
	State VAT on exports	12% to 18%	Exempt	Statutory regulation
	(ICMS)
	Federal value added tax	5% to 25%	Exempt	Statutory regulation
	Drawback incentive	12% to 18%	Exempt	Statutory regulation
	Turnover taxes on exports	9.25%	Exempt	Statutory regulation
	State VAT on import of machinery and equipment	18%	Exempt	Statutory regulation
Serra Grande	State VAT on exports (ICMS)	12% to 18%	Exempt	Statutory regulation
	Federal value added tax	5% to 25%	Exempt	Statutory regulation
	Drawback incentive	12% to 18%	Exempt	Statutory regulation
	Turnover taxes on exports	9.25%	Exempt	Statutory regulation
Ghana
Iduapriem and Obuasi	Import duty on mining equipment	10%	0%	Act of Parliament
	Other	10%	5%	Act of Parliament
	Royalties	In excess of 3%	3%	Stability agreement signed 18 February 2004, valid for 15 years
Mali
Morila	VAT payable on transactions with registered Mali business units	18%	Exempt	Approved by Minister of Finance effective 1 July 2008 and renewable half yearly on request
	Excise duties on fuel	Varies monthly	Exempt	Approved by Minister of Finance effective February 2006
Sadiola and Yatela	VAT payable on transactions with registered business units	18%	Exempt	Approved by Minister of Finance effective 1 July 2008 and renewable half yearly on request
Tanzania
Geita	Withholding tax rate on technical services	5% effective 1 July 2005	3%	Rate stabilised as per Mine Development Agreement (MDA) effective June 1999
	Road toll (fuel levy)	Tanzanian Shillings 200 per litre of diesel fuel consumed	Annual lump sum payment of US$200,000	Rate stabilised as per Mine Development Agreement (MDA) effective June 1999
Guinea
Siguiri	Corporate tax rate	35%	30%	Rate stabilised as per art. 13.11 of the Convention de Base
	VAT payable on purchase of goods and services excluding the purchase of imported diesel fuel	18%	Exempt	Exempt as per Convention de Base
	Corporate tax - accelerated tax depreciation on capital items	Limited to selected items as defined in article 101 of the tax code	Allowed on all capital additions	Article 13.13 of Convention de Base
	Corporate tax - carry over of operational tax losses	Limited to three years as per article 224 of the tax code	Limited to five years	Article 13.13 of Convention de Base
	Corporate tax - investment allowance on capital items	Not generally applicable	5% investment allowance	Article 13.13 of Convention de Base
	PAYE deductible on expatriate employees salary	Between 35% and 40% of gross salary	10% of gross salary	Article 13.17 of Convention de Base

Assistance from government

No significant financial assistance was received by the company or the operations from government in any of the jurisdictions in which the company operates. Any assistance received is detailed in the table below:

Country	Value ($ 000) 2009	Description	Value ($ 000) 2008	Description
Argentina
Cerro Vanguardia	1,652	Patagonia Port Incentive	13,724	Subsidies/rebates
	1,227	Income tax 30%	3,320	Other financial benefits from government
Mali
Sadiola/Yatela	–		6,873	Tax relief (see details above).
Australia
Sunrise Dam	749	Tax relief/credits	–
South Africa
SA Operations	1,725	Skills development levy	1,400
	1,634	Mining Qualification Association DiscretionaryGrants	1,180
AngloGold Health	320	Free TB drugs	–

Aspect: Market presence

EC5 (Additional)

Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.

In Ghana, Tanzania and South Africa, which account for 75% of AngloGold Ashanti’s 63,364 employees, wages are determined through a process of collective bargaining with the unions for all employees falling within the bargaining units The wages agreed with the unions are above the minimum set by the various governments.

• In Ghana, minimum wages are set by government for employees in the mining sector. AngloGold Ashanti’s operations exceed these requirements and, in addition, provide other benefits such as a provident fund, which are not provided for in legislation but negotiated through the collective bargaining process.
• In the South African mining sector, wages and conditions of service are competitive. In respect of certain categories of employees, wages and conditions of service are negotiated through a collective bargaining process, and compare favourably with minimum wages and salaries offered by competitors.
• In Tanzania, a minimum wage has been legislated for the mining industry. This is well above other legislated minimum wages in the country as part of that government’s intention that mineworkers should benefit from the mineral wealth of the country.

MM1	Identify those sites where the local economic contribution and development impact is of particular significance and interest to stakeholders and outline policies with respect to assessing this contribution

All AngloGold Ashanti operations make use of stakeholder engagement plans and integrated development plans to match the interests and needs of stakeholders to the company’s resources. Our Continental African operations in particular are located in poorer regions and local economic contribution is important to support sustainable livelihoods.

In the DRC stakeholders consistently raise the issue of using local suppliers and of hiring locally. In this instance, local refers to the surrounding community and is very limited. Investment in public infrastructure is primarily through the roads programme which links the community to the region and building primary school classes in Mongbwalu.

Geita mine continues to be an integral part of the local economic development through its local purchase initiative and employment. In addition, more than 250 communities members are temporarily employed through village contracts to offer services in property security, rehabilitation and housekeeping.

In Siguiri, although the issue of economic development is critical, no significant economic investment has been done into the communities except road maintenance and rehabilitation in the surrounding villages. The amount of road maintenance was valued at $105,404 and was done with the company equipment. No outside contract was given to local communities. The mine is embarking on a new community development strategy, which will start implementing in 2010.

In 2009, Brasil Mineração made 44% (or $37m) of its total purchases in cities which are directly impacted by the company’s operations. Investment in infrastructure and maintenance of Brasil Mineração in 2009 was $213,351.The amount spent on environmental compensation in 2009 was $120,323 including Rehabilitation of Ch?cara do Lessa Park, in Sabara and Natural Patrimonial Private Reserve Management Study in Cuiabá.

At Cerro Vanguardia 97.50% of the employees are native or resident in the Province of Santa Cruz, where the operation is based. Of these, 50% live in San Julian, with 370 direct and 740 indirect employees. This produces a high impact when is considered that the population of San Julian is 11,000 habitants. The local population has doubled since the arrival of Cerro Vanguardia to San Julian.

In all the above examples, stakeholder engagement and input is sought through appropriate local forums. To further strengthen the consultation and assessment process, a new engagement standard will be rolled out to sites in 2010.

MM2

Value added disaggregated by country

This information will be discussed and tabled in the country reports for 2009.

EC6 (Core)

Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation.

AngloGold Ashanti continues to support the communities and countries in which it operates through procurement and supplier development practices. We apply the Total Cost of Ownership approach to our procurement practice and actively involve local suppliers in all areas of our procurement spend. This implies that the spend with suppliers in geographically defined local areas will be increased and this approach to contract allocation is leading to the company updating its supplier network with local businesses. By supporting suppliers in the communities surrounding our operations, AngloGold Ashanti plays an active role in the expansion of the local economy by encouraging local skills and technology improvement that will create more jobs and result in sustainable development. Continuation of this practice has yielded good results; specific examples range from haulage services in Guinea, security and social environment in Mali, grinding media in Ghana, lime in Tanzania and general consumables at other operations. Operations have made progress on their local procurement activities and will continue to take work in this area forward.

In South Africa, the company is finalising its procurement policies with the Department of Trade and Industry’s (DTI’s) Code of Good Practice and will complete this process by mid-2010. This code is an integral part of the country’s transformation process and is aimed at encouraging new and small suppliers particularly from historically disadvantaged communities.

AngloGold Ashanti regards Historically Disadvantaged South African (HDSA) suppliers as preferred suppliers. What this means in practice is that HDSA suppliers who comply with AngloGold Ashanti’s criteria are placed on the vendor list and receive preferred status in winning contracts, should they be competitive from a lifecycle costing perspective.

HDSA suppliers in South Africa were referred to as Black Economic Empowerment (BEE) companies, defined by criteria relating to ownership and management only. A broader spectrum of criteria, including for example skills development and social spend, is now being applied to accredit Broad-based Black Economic Empowerment (BBBEE) companies. Targets had been set for levels of BEE expenditure over a 10-year period, however, this target is being reviewed and aligned to the BBBEE requirement to ensure the company meets the target set by the DTI through the Code of Good Practice. At the end of December 2009, BEE procurement was 29.8% against a target of 45%, whilst the BBBEE actual spend was R1.86bn (37.9% of total spend). This figure is being reviewed by accredited verification agencies. We have seen declining growth in the BEE spend as the industry is transforming from the BEE to BBBEE criteria.

The numbers for local procurement in this table include goods which are indirect imports as well as locally-produced goods. They are based on best estimates; AngloGold Ashanti is currently refining the systems in place for collecting this data.

Local spend %
Argentina	83.51
Australia	98.01
Brazil – Brasil Mineração	44.03
Brazil – Serra Grande	37.03
Ghana	74.61
Guinea	83.91
Mali	90.21
Namibia	70.51
South Africa	99.7
Tanzania	311
USA	412

¹ Local spend is defined as spend in country

² Local spend is defined as spend in the state in which the operation is located

³ Local spend defined as the region and cities surrounding operations

EC7 (Core)

Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation.

Localisation, transformation and employment equity are significant issues for the company, particularly in South Africa, where legislation requires that reports relating to the number of foreign nationals, historically disadvantaged South Africans (HDSAs) and women are submitted to the Department of Labour on an annual basis.

As of August 2009, which was the date the company’s two year employment equity plan ended and a report against the plan submitted to the Department of Labour, 95% of top and senior management was South African, of which 39.5% were HDSAs and 11% women.

AngloGold Ashanti employs expatriates in several other operating regions where localisation is government policy. Localisation plans and programmes are in place to limit the placement of expatriate employees and to ensure the training, development and placement of local employees. The promotion of diversity and specific groups of employees is also regulated in:

• Namibia, through the Affirmative Action Act;
• Mali, through equal opportunity employment regulations within labour legislation;
• Australia, through the commonwealth, state and federal legislation dealing with equal opportunities for women, workplace relations, human rights, racial discrimination and disability discrimination;
• Brazil, specifically related to the disabled;
• Colombia, where the level of gender representation is prescribed by law within the public sector; expatriate levels and regulated by law in all sectors;
• Ghana, in the Ghanaian National Mining Sector Policy and the Minerals and Mining Act;
• Guinea, through labour legislation.

As the proportion of senior management hired locally at other significant operation is close to or at 100%, this indicator is not relevant for reporting on these jurisdictions. The following table shows the number of expatriates working in the relevant locations:

Country	% expatriate senior management in 2009
Ghana	30%
Guinea	100%
Mali	100%
Tanzania	100%

Aspect: Indirect economic impacts

EC8 (Core)

Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in kind, or pro bono engagement.

AngloGold Ashanti is of the view that its operations and activities can and should contribute to the long-term sustainable development of host communities. Specifically through the support of local economic development, operations can ensure that they play a positive role in leaving host communities with a sustainable future. The fact that mining operations may be short-lived or that exploration projects will not necessarily become mines, presents a challenge as there is only a limited period in which to make an impact.

Many of the group’s operations are located in areas of great need, where development has been minimal, resources are scarce and high levels of poverty exist. The need to invest appropriately and in a manner that is sustainable is frequently countered by pressure from communities and indeed governments to receive tangible and immediate benefits. Where this makes sense, particularly in economically underdeveloped regions, operations are encouraged to develop partnerships with parties such as other mining companies and companies in other industries, contractors, non-governmental organisations (NGOs) and government to ensure more effective delivery. Two examples are provided below:

Local economic development of mine-based communities and labour-sending areas is specifically mandated in South Africa by the Mineral and Petroleum Resources Development Act (MPRDA) and the Mining Charter. In South Africa, the Small and Medium Enterprise Development Initiative (SMEDI) continues to identify people with ability and potential, and enters into a partnership with them to provide education, training and funding with the long–term aim of creating sustainable business. The raising of venture capital is managed through Masakhisane Investments Limited, which was established in 1999, with an initial capital investment of R10 million.

In Brazil, both Serra Grande mine and Brasil Mineração have local economic development programmes in place to stimulate the local economy, develop skills and further alternative employment options now and in the future. This work is done in conjunction with local communities, municipalities and elected leaders, and in close collaboration with NGOs that provide support to micro and small enterprises in Brazil.

Community investment

AngloGold Ashanti invests significantly in the communities in which it operates. Community investment spend in 2009 rose by 29% to $10.88m, compared with $8.44m in 2008. For accounting purposes, community investment (previously called social investment) is defined as an investment of resources, including, but not limited to, funds (i.e. also in-kind contributions), in the community where the beneficiaries are external to the company. This support seeks to complement the work of government, NGO and community-based organisations (CBOs). It includes those contributions which the company is obliged to undertake, such as those agreed with governments as part of stability agreements/mining conventions, and where legislation dictates that community contributions are made. The vehicles for community investment differ from region to region, and operation to operation, and are in line with the specific needs indicated by communities. The following table shows community investment spend by region in 2009.

Community investment spend by: ($ 000)

	2009	2008	Reason for variance
Southern Africa
Namibia	423	86
Navachab	423	86	Purchase of a school, which was previously leased. Renovation of a local police station and increased bursary allocation.
South Africa	2,962	3,177
Corporate	2,836	2,993
South African operations	126	184
Continental Africa
Ghana	2,530	2,287
Iduapriem	146	332
Obuasi	2,266	1,955
Ghana Corporate	118	–
Guinea	511	285
Siguiri	511	285 (1)
Mali	543	620
Morila	171	60	Bridge and road repairs.
Sadiola (38%) (2) and Yatela (40%)	372	560	Reduction due to once-off inoculation campaign and waste management assistance to regional and local authorities.
Tanzania	1,132	373
Geita	1,132	373	Feasibility study for Geita town water project, inclusion of mining technical training centre, contribution to regional educational fund and completion of phase 1 of community clinic.
DRC	386	119
Exploration	386	119	Increased community investment initiatives as this exploration project advances.
Australasia
Australia	133	117
Sunrise Dam	133	117
North America
USA	391	253
CC&V	391	253	The economic downturn put pressure on non-profit organisations resulting in significant increase in requests. There was also increased focus on mining and minerals related education and preservation activities.
South America
Argentina	675	638
Cerro Vanguardia	675	638 (1)
Brazil	938	1,007
Brasil Mineração	754	839
Serra Grande	184	168 (1)
Colombia	800	99
Exploration	737	99	The advanced stage of this exploration project required major community investment.
Greenfields	63	–
Sub-total	11,424	9,061
Equity accounted investments included above	(543)	(620)
Total	10,881	8,441

⁽¹⁾ Restated: 2008 figure was attributable expenditure

⁽²⁾ Effective 29 December, AngloGold Ashanti increased its interests to 41%.

EC9 (Additional)

Understanding and describing significant indirect economic impacts, including the extent of impacts.

Mining and even exploration activities bring significant indirect economic impacts through, for example, decreased levels of joblessness, and trickle down effects on nutrition and education levels; tax income which is used by various spheres of government to make local and regional improvements on infrastructure and living conditions. In addition, indirect economic impacts are experienced by other business sectors, for example, in the DRC the stakeholder forum identified the need for and promoted the use of local transporters and other suppliers by the mine. This has resulted in those contractors hiring and training local staff who spend their income in the local shops and markets.