AngloGold Ashanti has started consultation process with employees with respect to restructuring certain of its South African business units. This follows a review of the options to safely turn around the performance of these loss-making operations.
AngloGold Ashanti signalled to stakeholders earlier this year that it would review its South African gold-mining operations in light of heavy, and ultimately unsustainable, losses they have incurred. The restructuring of the company’s production and cost base is necessary to protect the overall viability of its South African business over the long-term, and to safeguard employment at viable business units in the West Wits and Vaal River regions.
While all efforts will be made to limit the impact on employment to the greatest extent possible, this restructuring contemplates some 8,500 roles across AngloGold Ashanti’s South African business, which currently employs about 28,000 people, including contractors.
Some of AngloGold Ashanti’s older mines in the South African region have reached the end of their economic lives, several decades after they started production, according to the company. These mines face systemic challenges, including near-depletion of ore reserves, increasing depth and distance from central infrastructure, declining production profiles, and cost escalations that have continued to outpace both inflation and a subdued gold price.