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Annual report suite 2012

Continental Africa

Continental Africa [map]
Richard Duffy [photo]

Richard Duffy
Executive Vice President
Continental Africa Region

Attributable gold production (000oz) Average number of employees
OPERATIONS
1 Ghana
Iduapriem 180 1,549
Obuasi 280 5,373
2 Guinea
Siguiri 247 3,643
3 Mali
Morila 81 319
Sadiola 100 783
Yatela 29 407
4 Namibia
Navachab 74 953
5 Tanzania
Geita 531 3,594

Regional profile

There are eight mining operations in five countries in our Continental Africa Region.

Ghana

In Ghana, AngloGold Ashanti currently has two wholly owned and managed operations, Obuasi and Iduapriem. They were acquired following a merger between the former AngloGold Limited of South Africa and Ashanti Goldfields Company Limited of Ghana in 2004.

  • The Iduapriem mine comprises the Iduapriem and Teberebie properties in a 110km2 concession. Iduapriem is located in the Western Region of Ghana, some 70km north of the coastal city of Takoradi and 10km southwest of the Tarkwa mine. Iduapriem is an open-pit mine and its processing facilities include a carbon-in-pulp (CIP) plant.
  • Obuasi is located in the Ashanti Region of Ghana, approximately 60km south of Kumasi. Mining operations are primarily underground, to a depth of 1.5km. Some surface mining in the form of open-pit and tailings reclamation occurs.

Obuasi currently treats sulphide ores from underground at the south plant, following the decommissioning of the tailings treatment plant in October 2010. The south plant also treats sulphide tailings and has a monthly capacity of 360,000t.

Guinea

Siguiri, a multiple open-pit oxide gold mine, is AngloGold Ashanti’s sole operation in the Republic of Guinea. AngloGold Ashanti holds an 85% interest in Siguiri with the remaining interest held by the Government of Guinea.

  • Siguiri mine covers a concession area of 1,500km2 in the relatively remote district of Siguiri, around 850km northeast of the country’s capital Conakry. The area, which has significant potential for gold mining, has long been an area of traditional artisanal mining. Local economic activity is closely connected to gold mining. Conventional mining is undertaken by contractors in multiple open-pits using conventional techniques. On surface, Siguiri’s gold processing plant treats about 30,000t daily.

Mali

AngloGold Ashanti currently has interests in three gold mining operations in southern and southwestern Mali:

  • Morila is a joint venture between AngloGold Ashanti and Randgold Resources (which manages the mine) in which each has a 40% interest. The Government of Mali owns the remaining 20%. Morila is situated 180km southeast of Bamako, the capital of Mali. The operation treats low-grade stockpiles while the plant, which incorporates a conventional carbon-in-leach process with an up-front gravity section to extract the free gold, has an annual throughput capacity of 4.3Mt. With the depletion of the orebody and the conclusion of mining in 2009, operations here currently involve processing of the remaining stockpile which stood at 5Mt (marginal ore and marginal waste) as at year-end.
  • Sadiola is a joint venture between AngloGold Ashanti (41%) and IAMGOLD (41%). The Government of Mali owns the remaining 18%. The Sadiola mine is situated in southwestern Mali, some 77km south-southwest of the regional capital Kayes. Mining activities take place in five open-pits. On-site surface infrastructure includes a 4.9Mt per annum carbon-inleach (CIL) gold plant where the ore is eluted and smelted. Sadiola’s future lies in the expansion of the Sadiola main pit and a new plant.
  • Yatela is 80% owned by the Sadiola Exploration Company Limited, a joint venture between AngloGold Ashanti and IAMGOLD, giving each a 40% stake. The balance of 20% is owned by the Government of Mali. Yatela is situated in southwestern Mali, some 25km north of Sadiola and approximately 50km south-southwest of the regional capital Kayes. Ore extraction has been conducted from a number of pits, in which mining in most of these pits has been completed. For the remaining life of the mine, the focus will be on a final cutback in the Yatela Main pit as well as a new pit north of the Yatela Main pit. The ore mined is treated on heap-leach pads together with carbon loading. The carbon is then transported to Sadiola for elution and smelting.

Namibia

AngloGold has one wholly owned mining operation, Navachab, in Namibia.

  • The Navachab gold mine is situated near the town of Karibib some 170km northwest of the capital Windhoek and 171km inland of the town of Swakopmund on the southwest coast of Africa. Navachab, which began operations in 1989, is an open-pit mine with a 120,000t per month processing plant consisting of crushing, milling, carbon-in-pulp (CIP) and electro-winning facilities.

Tanzania

AngloGold Ashanti has one wholly owned operation in Tanzania, Geita, the largest single gold mining operation within the group.

  • Geita is located in northwestern Tanzania, in the Lake Victoria goldfields of the Mwanza Region, about 120km from Mwanza and 4km west of the town of Geita. The Geita gold deposit is mined as a multiple open-pit operation with underground potential and is currently serviced by a 5.2Mt per annum CIL processing plant. While Geita generates its own power, the operation of its power generating facility is outsourced, and fuel is delivered by road.

Exploration

AngloGold Ashanti also has an active greenfield exploration programme, principally in the DRC, focused on the Mongbwalu concession and Kibali, a joint venture with Randgold Resources and the DRC government. Refer to page 64 for more information on the programme in Continental Africa. This is in addition to brownfield exploration conducted at and around existing operations. See Review of exploration.

Key performance indicators

AIFR  Continental Africa [graph] Production  Continental Africa [graph]
Productivity  Continental Africa [graph] Total cash costs  Continental Africa [graph]
Number of reportable environmental incidents
 Continental Africa [graph]
Continental Africa – key statistics
Units 2012 2011 2010
Operation
Tonnes treated/milled Mt 27.8 26.3 25.7
Pay limit oz/t 0.041 0.036 0.040
g/t 1.273 1.235 1.371
Recovered grade oz/t 0.055 0.055 0.052
g/t 1.70 1.87 1.79
Gold production 000oz 1,521 1,570 1,492
Total cash costs $/oz 905 765 712
Total production costs $/oz 1,111 987 867
Capital expenditure $m 790 420 234
Productivity oz/TEC 10.97 11.41 11.24
Safety
Number of fatalities 5 3 5
AIFR per million hours worked 2.26 3.03 5.26
People      
Average no of employees: Total 16,621 16,539 15,761
Permanent employees 10,014 9,783 9,684
Contractors 6,607 6,756 6,077
Environment
Total water consumption ML 24,875 27,114 24,432
Total water usage intensity kL/oz 14.88 15.66 14.34
Total energy usage million GJ 12.13 11.51 11.30
Total energy intensity GJ/oz 7.25 6.65 6.63
Total greenhouse gas (GHG) emissions 000tCO2e 978 938 950
Total GHG emissions/oz tCO2e/oz 0.59 0.54 0.56
Cyanide* used t 14,065 14,219 12,797
No. of reportable environmental incidents 5 14 16
Rehabilitation liabilities: Total $m 427.5 364.3 231.2
Restoration $m 275.1 238.5 137.5
Decommissioning $m 152.4 125.8 93.6
Community
Community expenditure $000 13,341 13,502 8,047
Payments to government $m 550 482 398
Dividends $m 49 68 83
Taxation $m 239 191 112
Withholding tax (royalties, etc) $m 149 128 80
Other indirect taxes and duties $m 38 26 36
Employee taxes and other contributions $m 59 54 52
Property tax $m 6 4 19
Other (includes skills development and
export taxes)
$m 10 11 16
  1. * Cyanide Code compliance: Sadiola and Yatela were certified in 2009. Navachab and Siguiri were certified in 2010.

Performance in Continental Africa in 2012

Safety
Regrettably, five people lost their lives in occupational accidents during 2012 (2011: 3), at Obuasi (2) and Iduapriem (1) in Ghana, at Geita (1) in Tanzania and at Mongbwalu (1) in the DRC. The all injury frequency rate for the region improved to 2.26 per million hours worked in 2012 from 3.03 in 2011. Full investigations into the fatal accidents have been conducted and the necessary steps taken to mitigate their re-occurrence.
Production
Combined gold production from these operations decreased to 1.52Moz in 2012 (2011: 1.57Moz), equivalent to 39% of group production. The most significant contributors to the region’s production were Geita (35%), Obuasi (18%), Siguiri (16%) and Iduapriem (12%).

Total cash costs rose by 18% to $905/oz, (2011: $765/oz), largely as a result of poor performance at Obuasi, where the development contractor was replaced during the fourth quarter; and rising costs at Sadiola, where recoveries have suffered as mining moves from oxide to sulphide ore.
Capital expenditure
Total capital expenditure for the region was $790m (2011: $420m), an increase of 88%. The bulk of this was spent at Obuasi ($185m) and Kibali ($263m).
People
The region employed an average of 16,621 people in 2012 (2011: 16,539 people) made up of 10,014 (60%) permanent employees and 6,607 (40%) contractors. The average level of productivity for the region was 10.97oz/TEC, with productivity the highest at Morila (35.72oz/TEC) and Geita (19.20oz/TEC) mines.

One of the consequences of the potential instability in Mali was its effect on employee morale: staff worked under difficult conditions in addition to being concerned for their families who were evacuated from site. These conditions continue to have an impact on the workforce and our ability to attract and retain appropriate skills.
Communities
Among the critical concerns in the region are social issues arising from heightened community expectations and artisanal and small-scale mining (ASM), as well as security incidents.

The Ajopa resettlement programme at Iduapriem in Ghana has been approved by the Environmental Protection Agency, and has since been followed by a risk workshop to ensure a successful outcome for all stakeholders and the community in particular.
Environment
One of the most significant challenges in this region in recent years has been the management of water, particularly in respect of legacy issues. The completion of a new tailings dam at Iduapriem and commissioning of two water treatment plants at Obuasi in Ghana has significantly improved water management, and enabled the mine to comply with permitting frameworks.
Mineral Resource
and Ore Reserve
The total attributable Mineral Resource (inclusive of the Ore Reserve) associated with the mining operations in Continental Africa totalled 73.01Moz at year-end (2011: 76.50Moz), with an attributable Ore Reserve of 27.59Moz (2011: 28.02Moz). This amounts to 30% of the group’s Mineral Resource and 37% of its Ore Reserve.
Growth
The immediate growth in the Continental Africa region is from the 45% interest in the Kibali joint venture which is in development and is forecast to pour gold in early 2014. In the case of Obuasi, investigations have begun into a new surface decline down to the 50 level to access Obuasi Deeps. Open-pit mining has already started at the Sibi pit. Again some economies of scale are expected from the use of the existing tailings storage facility (TSF), which is stable and has adequate capacity up to 2018.

The Sadiola Sulphide Project (SSP) was delayed by military action in Mali during the year. Critical to its progress was the conclusion of a power purchase agreement in November. The SSP will provide the operation with access to deeper more conformable sulphide material and will also absorb some skills and expertise from the Yatela operation, as it reaches the end of its life.
Outlook*
In 2013, production is expected to be between 1.375Moz and 1.476Moz at a total cash cost of between $911/oz and $945/oz. Capital expenditure of around $722m is planned, mainly on capital expansion projects.

  1. * AngloGold Ashanti may not be able to reach these targets. Refer to the “Forward-looking statements” of this report, to the section entitled “Understanding and mitigating our risks”, and to the page entitled “Risk factors related to AngloGold Ashanti’s suite of 2012 reports”.