Ghana Tells AngloGold to Keep Mine Job Cuts ‘Reasonable’

AngloGold Ashanti Ltd., the world’s third-largest producer of the metal, has been ordered to submit a proposal on how it plans to cut costs at its Obuasi mine in Ghana, the country’s government said.

Options include a “reasonable reduction of labor force,” Simon Atebiya, an official at Ghana’s Ministry of Land and Natural Resources, said in an interview following a meeting between AngloGold and the department.

The company said in October it plans to cut 400 jobs at the mine to rein in costs as gold’s 28 percent drop last year, the most since 1981, erodes profit. AngloGold suspended its dividend last year, is firing 40 percent of its 2,000 employees in corporate offices and is cutting spending on exploration.

AngloGold, which has 21 operations in 10 countries, faces “infrastructural and other production challenges” that have worsened with the drop in the gold price, said Kwame Addo-Kufour, the company’s vice president for corporate affairs. He declined to give further details of discussions with the government.

The gold producer’s stock dropped 3.3 percent to 132.51 rand at 3:08 p.m. in Johannesburg, extending its drop since the beginning of last year to 50 percent.

(Updates with share price in fifth paragraph.)
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