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SUSTAINABLE ECONOMIC BENEFITS

EC1

ICMM Reasonable Assurance

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC1: 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.

Please refer to Global priorities and progress: Creating sustainable economic benefits of this report for disclosure on this indicator.


EC3

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC3: Coverage of the organization’s defined benefit plan obligations.

Please refer to Group note 1 – Accounting policies – in the Annual Financial Statements as well as Global priorities and progress: Creating sustainable economic benefits of this report for disclosure on this indicator.


EC4

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC4: Significant financial assistance received from government

Financial assistance from government

Significant assistance received by the company in any of the jurisdictions in which it operates is detailed in the table below
Country Value ($000)
2011
Description Value ($000)
2010
Description
Argentina - Patagonia Port Incentive - Subsidies/rebates
Cerro Vanguardia 8,991 Income tax 30 % 3,035 Other financial benefits from government
Australia
Sunrise Dam 1,131 Tax relief/credits 1,198 Tax relief/credits
South Africa
SA Operations 2,891 Skills development levy 1,615 Skills development levy
  870 Mining Qualification
Association Discretionary
grants
2,343 Mining Qualification
Association Discretionary
grants
AngloGold Health 244 Free tuberculosis (TB) drugs 280 Free TB drugs

EC6

ICMM Reasonable Assurance

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC6: Policy, practices and proportion of spending on locally based suppliers at significant locations of operation

Local sourcing

One of our core values of ‘leaving the communities and societies better off for AngloGold Ashanti being there ’ is reflected in our practice of engaging and transacting with suppliers in the communities surrounding our operations and in the countries in which we operate. Through this procurement practice, AngloGold Ashanti plays an active role in the expansion of the local economy by encouraging local skill development, providing business opportunities and a platform for technology enhancements which will lead to sustainable local businesses.

Local supplier development has been identified as an important lever in increasing our contribution to local economies. This has led to our participation in business development groups and supporting training and development of local suppliers. Our approach is to source locally, if the product is available and is supported by the country’s infrastructure and supply capacity. Operations in the USA, Brazil, Argentina, South Africa and Australia have continuously supported local suppliers and in this way have helped contribute to the development of the local mining supply markets since their beginnings. In Continental Africa, continuous work is being done on engaging with local suppliers about their product offerings and having multinational companies transfer their skills to the local employees.

The summary of the local spend percentages in the table below includes goods which are indirect imports as well as locally-produced goods. They are based on best estimates. Local spend includes all spend with locally registered suppliers and companies. Further work is required to strip out the local versus imported content in the upstream supply chains of suppliers.

Local sourcing
2011
Argentina(1) 85%
Australia(1) 98%
Brazil(2) 81%
DRC(1) 60%
Ghana – Obuasi (1) 49%
Ghana – Iduapriem (1) 77%
Guinea(1) 67%
Mali – Sadiola(1) 67%
Mali – Yatela(1) 74%
Namibia (1) 89%
South Africa (1) 99%
Tanzania (1) 56%
USA (2) 39%
AngloGold Ashanti Weighted Average 72.46%
  1. (1)Local spend is defined as spend in country
  2. (2) Local spend is defined as spend in the state in which the operation is located.

In the South African region, AngloGold Ashanti has recognised the need to contribute to the transformation of the country from a socio-economic perspective by transacting with Black Economic Empowered (BEE) suppliers, defined as black ownership being greater than 25% plus one vote. The spend value with BEE suppliers was approximately $315.4m of the total $731.5m measurable procurement expenditure. AngloGold Ashanti also continues to measure its performance based on the Department of Trade and Industry’s (DTI) “Codes of Good Practice” where it achieved a score of 19.5 out of a possible 20 points, representing 98% compliance on the Broad Based Black Economic Empowerment (BBBEE) basis.

Ernst & Young has assured policy, practices and proportion of spending on locally-based suppliers at significant locations of operation in South Africa only.


EC8

ICMM Reasonable Assurance

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC8: Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement.

Community investment spend

Community investment spend by country and region in $000 (2010 – 2011)
Country 2011 2010 Reason for variance
South Africa 3,670 3,242  
Corporate 2,605 3,072  
South African operations 1,065 170 South African operations have embarked on a social leases initative. The initiative makes commercial property available to the community for a fraction of the commercial value.
Continental Africa 13,502 8,047  
DRC 4,633 1,882
Kibali Project (45%) 1,299 489 Increased SME support. Increase based on Bunia Boulevard repairs and upgrade of Budana HydroPower plant
Mongbwalu Project 3,335 1,393  
Ghana 3,264 3,804  
Iduapriem 513 404  
Obuasi 2,704 2,100  
Ghana Corporate 47 1,300  
Guinea 772 556  
Siguiri 772 556  
Mali 477 656  
Morila (40%) 48 214  
Sadiola (41%) and Yatela 429 442  
Namibia 54 133  
Navachab 54 133  
Tanzania 4,302 1,016  
Geita 4,302 1,016 Significant Social Infrastructure projects initiated.
Australasia 276 456  
Australia 276 456  
Sunrise Dam(1) 276 456  
Americas 4,939 5,480  
Argentina 2,067 1,602  
Cerro Vanguardia 2,067 1,602  
Brazil 1,058 1,622  
AGA Mineração 791 791  
Serra Grande 268 831  
Colombia 1,210 1,557  
USA 603 699  
CC&V2 603 699  
Sub-total 22,387 17,225  
Equity accounted investments included above (1,775) (1,145)  
Total 20,611 16,080  
  1. (1) Includes Perth office
  2. (2) Includes Denver office

EC9

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC9: Understanding and describing significant indirect economic impacts, including the extent of impacts.

Indirect economic benefits

Ensuring that the activities of AngloGold Ashanti’s sites provide indirect economic benefits is of the utmost importance.

Within the company’s Continental Africa region, the work currently being undertaken at the Siguiri operation, which uses the Millennium Development Goals (MDGs) as a keystone, will provide a potential model for improving the quality of the region’s contribution to local development.  A process of role definition and agreement is required to set the boundaries of support provided by operations.  This delineation will influence the range of indirect benefits attributable to the existence of these operations including employment, enterprise development, service provision, education and health care.

In the Americas region, initiatives undertaken in 2011 have included:

  • In Cerro Vanguardia in Argentina, cooperative work between the mine and key stakeholders in the Puerto San Julian (PSJ) community to establish a vision for future economic development. This visioning exercise resulted in a development plan in which all community stakeholders have participated. In addition to various social investments made during the year, one investment stands out in terms of the economic benefits provided to the PSJ community.
  • In Brazil, a ‘public call for projects’, an AngloGold Ashanti initiative that strives to ensure greater legitimacy and transparency in the company’s community investment as well as the active engagement of communities. In towns close to the company’s operations in the Minas Gerais and Goiás state, 25 projects were selected to receive company support. The total amount of support provided by AngloGold Ashanti was $523,844. In the Crixás state, seven proposals were submitted, and after assessing their documentation and compliance with relevant guidelines, five projects were approved and submitted for a second assessment. At the end of the process, four initiatives were approved. The total amount invested was $119,048, with approximately $75,595 targeted for 2011 and the remainder for 2012. The approved projects are all aimed at training the community and generating jobs and income. 160 families will benefit directly from them, and one of the initiatives, the Crixaense Cerrado Fair, will draw more than 1,000 people every two weeks.
  • In Colombia, a contribution by the La Colosa project of nearly $4 million to the local economy through local procurement, contractors, the employment of 550 community members and social investments designed to increase the capacity of local businesses. These investments resulted in growth in the local economy due to direct employment generation and the establishment of a local supplier network, as well as through the dissemination of best practices among local businesses. Additionally, the 550 local community members currently working for AngloGold Ashanti in Cajamarca ensure that 2,750 people are benefitting economically from the company’s presence. This is nearly 14% of the entire population of the municipality.
  • In the USA, the Cripple Creek and Victor Gold Mining Company (CC&V) has a significant impact on local employment. Though no economic impact studies were undertaken in 2011, recent studies indicate that each employee at CC&V generates 2.2 jobs in Teller County, 4.4 jobs in the region and 5.9 jobs in the state of Colorado. Moreover, the employment provided directly is of a significantly higher quality than that which is available elsewhere in the area. According to the most recent studies, the wage and benefits packages received by CC&V employees is on average 1.7 times greater than the average for the rest of Teller County. CC&V’s local tax payments have been noted as being of direct benefit to the local school system.

The Australian region makes a significant economic contribution to Western Australia and the Eastern Goldfields, both through its gold royalty payments (a State tax) at the Sunrise Dam mine and through direct spending in the local community. The bulk of AngloGold Ashanti Australia’s operational spend is in Western Australia. The Tropicana Gold Mine (70% AngloGold Ashanti), currently in construction, has set up its tendering processes for construction and operations to facilitate participation by local businesses.

Independent research by external consultants on the economic impact of the Tropicana Gold Mine estimated that the project would contribute $862 million (direct, indirect and consumption effect) to the Australian economy during construction and a further $850 million during operations. This research forecast the project would create 2,322 direct and indirect jobs during construction and a further 1,197 direct and indirect jobs during operations. Tropicana will pour first gold in the December quarter of 2013.

In South Africa, the mining industry has generated substantial indirect economic benefit both locally and in the surrounding region, in the form of ancillary industries, jobs and infrastructure.  However these benefits have not been quantified in relation to AngloGold Ashanti’s specific contribution in 2011.


EC7

Global Compact Reasonable Assurance

The information below provides disclosure under the Global Reporting Initiative (GRI) indicator
EC7: Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation

Hiring from local communities

Localisation, transformation and employment equity are significant issues for the company in some regions:

In South Africa, legislation requires that we report on the number of historically-disadvantaged South Africans (HDSAs), including women, at various levels of the workforce. Although recruitment is not limited to areas local to operations, our operations in South Africa are committed to employing a workforce that is representative through employment practices that are equitable, based on ability, objectivity and fairness and aligned to relevant legislation, organisational policies and strategies.

In Mali, the hiring process is based on the principle of equal employment opportunity. There is no unfair discrimination on the basis of age, race, sexual orientation, religion or origin or disability. An agreement exists between local community authorities and the mines to fill 50% of job vacancies not requiring qualifications from the surrounding local communities.

Additionally a localisation plan has been implemented whereby Sadiola and Yatela identify potential local employees who are then developed to take over from expatriates when their contracts expire. Currently, 91 % of middle managers are local citizens, with just over 62% of Malian citizens in senior management roles. 99 % of employees at junior management level and below are local citizens

In Guinea, country regulation allows us to employ expatriates only if positions cannot be filled by locals within a reasonable time frame. Training programmes, career planning and development contribute to implementing the localisation plan in order to comply with the new mining code. Currently 39% of middle managers are local citizens. There are no Guinean citizens in senior management roles. 98% Of employees at junior management level and below are local citizens.

In Ghana, hiring procedures require that local citizens are sourced to fill vacancies by advertising in local media. If local citizens are not identified, expatriates can be recruited as appropriate. Over 99% of the total labour force is Ghanaian.

In Tanzania, the Tanzania Investment Act stipulates that a maximum of five expatriates may work in Tanzania in supporting the business. Other employees should be Tanzanians. In support of the company’s localisation programme, recruitment at our Geita mine in Tanzania is undertaken locally before external searches are carried out. Less than 1% of senior managers are local. 69% Of employees at junior management and below are local.

In Namibia, all senior managers are locally recruited. An affirmative action compliance report is submitted annually to Government.

In Argentina, an agreement is in place with our local partner Fomicruz which establishes the hiring of local people as a priority. 98% of employees at the operation are Argentinean citizens, including all senior managers.

In Brazil, our policy is to hire employees from communities where we have operations. In 2011, 93% of our workforce was sourced from the local community. All senior management are Brazilian citizens.

In Australia, due to the remote locations of our mining operations in the Western Australian region, operations have no significant “local community” from which to source labour and operate on a fly-in, fly-out basis. Due to the current skills shortage facing the Australian mining industry, labour is also sourced internationally to meet demand, however all available options within the Australian labour pool are exhausted before pursuing an international applicant. 95.5% Of employees in the Australian region are Australian citizens or permanent residents.


Payments to government

Payments to governments in terms of Extractive Industries Transparency Initiative (EITI) Principles
($000) 2011 2010
Argentina* 133,674 62,581
Dividends paid to the government 7,360 5,682
Taxation paid 57,015 9,046
Withholding tax (STC, royalties, etc) 30,555 22,571
Other indirect taxes and duties 3,300 2,197
Employee taxes and other contributions (1) 12,367 8,069
Property tax 12 8
Other (includes tax on exports) 23,065 15,008
Australia 122,159 28,095
Dividends paid to the government - -
Taxation paid 81,087 -2,336
Withholding tax (STC, royalties, etc) 9,768 12,610
Other indirect taxes and duties - -
Employee taxes and other contributions (1) 31,304 17,821
Property tax - -
Other - -
Brazil 138,157 122,499
Dividends paid to the government - -
Taxation paid 63,784 64,052
Withholding tax (STC, royalties, etc) 146 361
Other indirect taxes and duties 7,468 4,168
Employee taxes and other contributions (1) 53,060 44,179
Property tax 2,091 1,673
Other (includes tax on vehicle ownership) 11,608 8,066
Colombia 10,921 14,561
Dividends paid to the government - -
Taxation paid 125 379
Withholding tax (STC, royalties, etc) 1,488 915
Other indirect taxes and duties 4 15
Employee taxes and other contributions (1) 4,707 4,326
Property tax 16 4
Other (tenement fees) 4,581 8,922
DRC 11,076 10,494
Dividends paid to the government - -
Taxation paid 1 5,079
Withholding tax (STC, royalties, etc) - -
Other indirect taxes and duties 3,477 185
Employee taxes and other contributions (1) 2,642 920
Property tax 3,293 -
Other 1,663 4,310
Ghana* 97,869 97,869
Dividends paid to the government 2,037 2,082
Taxation paid 37,526 6,226
Withholding tax (STC, royalties, etc) 27,763 20,591
Other indirect taxes and duties 9,112 6,542
Employee taxes and other contributions (1) 21,029 21,614
Property tax 402 351
Other - 4,152
Guinea* 98,454 96,344
Dividends paid to the government 13,500 13,500
Taxation paid 50,297 49,306
Withholding tax (STC, royalties, etc) 29,710 25,622
Other indirect taxes and duties - 339
Employee taxes and other contributions (1) 4,947 7,570
Property tax - -
Other - 7
Mali* 164,108 170,320
Dividends paid to the government 52,232 67,617
Taxation paid 45,251 43,021
Withholding tax (STC, royalties, etc) 40,601 16,613
Other indirect taxes and duties 11,335 14,735
Employee taxes and other contributions (1) 8,337 5,866
Property tax 471 17,964
Other 5,881 4,504
Namibia 9,241 14,014
Dividends paid to the government - -
Taxation paid 615 8,689
Withholding tax (STC, royalties, etc) 4,076 1,606
Other indirect taxes and duties - -
Employee taxes and other contributions (1) 4,444 3,618
Property tax 105 97
Other 1 4
South Africa 313,334 199,455
Dividends paid to the government - -
Taxation paid 102,023 37,925
Withholding tax (STC, royalties, etc) 37,925 35,451
Other indirect taxes and duties - -
Employee taxes and other contributions (1) 132,249 117,142
Property tax 2,765 3,437
Other 5,600 5,500
Tanzania 101,134 44,994
Dividends paid to the government - -
Taxation paid 57,264 -
Withholding tax (STC, royalties, etc) 26,144 15,509
Other indirect taxes and duties 2,206 14,567
Employee taxes and other contributions (1) 12,344 12,060
Property tax - -
Other 3,176 2,858
USA 19,765 19,406
Dividends paid to the government - -
Taxation paid 174 3,397
Withholding tax (STC, royalties, etc) 926 590
Other indirect taxes and duties - -
Employee taxes and other contributions (1) 12,722 11,513
Property tax 1,136 1,089
Other (Production mine tax) 2,218 1,723
Other (Severance tax) 2,589 1,094
Group 1,219,892 844,321
Dividends paid to the government* 75,129 88,881
Taxation paid 495,162 224,784
Withholding tax (STC, royalties, etc) 241,874 152,439
Other indirect taxes and duties 36,902 42,748
Employee taxes and other contributions (1) 300,152 254,698
Property tax 10,291 24,623
Other 60,382 56,148
  1. *Includes dividends paid to governments as shareholders of operations
  2. (1) Includes remittance made to government but borne by employees as individual taxation, e.g. PAYE, UIF