AngloGold Plans 400 Ghana Job Cuts to Curb Costs as Price Falls
AngloGold Ashanti Ltd. (ANG), the world’s third-largest producer of the metal, said it plans to cut 400 jobs at its Obuasi mine in Ghana by end of the year to rein in costs as the decline in the price of bullion erodes profit.
“The current cost structure is not appropriate; we are transitioning to a more mechanized operation,” Mark Morcombe, the senior vice president in charge of the mine, said in a Sept. 30 interview in the capital, Accra. “The transition is for a three-year period, which will result in more efficient operations.” Obuasi employs 4,800 people.
To combat higher costs and the retreat in the bullion price, Johannesburg-based AngloGold suspended its dividend, is cutting spending and exploration and is laying off 40 percent of the 2,000 employees in its corporate offices. The company, with 21 operations in 10 countries, reported a loss in the second quarter ended June after the metal’s price had dropped 23 percent in the period, a record quarterly decrease.
Gold output in the West African nation, the continent’s largest producer after South Africa, may fall as much as 18 percent this year after the drop in prices prices prompted some mines to cut production, Minerals Commission Chief Executive Officer Ben Aryee said on Sept. 20.
Gold Fields Ltd. (GFI), which mines the metal in Ghana, was forced to temporarily shut its operations in the country in April after illegal strikes that halted more than 40 percent of the Johannesburg-based company’s output.
Newmont Mining Corp. (NEM), which has the Ahafo operation and Akyem project in Ghana, sees about 300 job cuts by the end of the year as part of a “restructuring process,” Adiki Ayitevie, the company’s regional manager in charge of communications, said in a Sept. 27 interview.
“The situation is quite terrible; we will be losing about 2,000 jobs by June,” Prince Ankrah, general secretary of the Ghana Mine Workers Union, said by phone yesterday. “We understand the situation and are negotiating the best and fair deals for all parties.” The organization represents more than 20,000 employees in the industry.
Output at Obuasi increased 18 percent to 58,000 ounces in the three months ended June 30 from the previous quarter. Total cash costs declined 10 percent to $1,560 an ounce. Gold declined 2.8 percent to $1,291.78 by 4:35 p.m. in London yesterday, extending the drop this year to 23 percent.
AngloGold also operates the Iduapriem mine in Ghana, which has a staff of 1,200, Morcombe said.
The company’s shares slumped 3.7 percent to 129.51 rand by the close in Johannesburg yesterday, extending the plunge this year to 51 percent. The stock’s retreat matches the fall of Gold Fields in 2013. They are the worst performers in South Africa’s 165-member FTSE/JSE Africa All Share Index (JALSH) after Harmony Gold Mining Co., which retreated 55 percent.
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