Performance review

Regional reviews

AngloGold Ashanti’s five South African deep-level mines and surface production facilities are divided into three areas of operation: Vaal River, West Wits and Surface Operations. At present, these three areas comprise the following operations:

Vaal River

The Vaal River mining operations comprise three mines located around 170km to 180km from Johannesburg, near the Vaal River on the Free State-North West Province border. These three mines, which share a milling and treatment circuit, are:

  • Great Noligwa, a mature operation nearing the end of its life, adjoins Kopanang and Moab Khotsong in the Free State. The mine primarily exploits the Vaal Reef by means of scattered mining via a twin-shaft system over three main levels at an average depth of 2,100m.
  • Kopanang is located to the west of neighbour Great Noligwa and bound to the south by the Jersey Fault. Gold is the primary output, with uranium oxide produced as a by-product, from a single shaft system to a depth of 2,600m. It almost exclusively exploits the Vaal Reef.
  • Moab Khotsong is AngloGold Ashanti’s newest gold mine in South Africa. Stoping operations began in November 2003 with full production achieved in 2010. Given the geological complexity of the Vaal Reef, scattered mining is employed.

West Wits

The two West Wits operations, situated southwest of Johannesburg, on the border between Gauteng and North West Province, are:

  • Mponeng, the world’s deepest gold mine and our flagship operation in the South Africa region, exploits the Ventersdorp Contact Reef (VCR) at depths of between 2,400m and 3,900m via a twin-shaft system. Ore is treated and smelted at the mine’s gold plant.
  • TauTona exploits both the Carbon Leader Reef (CLR) and the VCR via a three-shaft system, supported by secondary and tertiary shafts sinking to depths of between 1,850m and 3,450m. TauTona’s infrastructure is to be used to access the remaining Ore Reserve at the former Savuka mine. A link between the two mines reduces dependency on a single infrastructure system, including ore passes. The integration of Savuka into TauTona has been completed and is expected to extend TauTona’s life of mine. The hoisting of Savuka ore via TauTona is planned to start in the second quarter of 2015.

Surface Operations

  • Surface Operations extracts gold from marginal ore dumps and tailings storage facilities on surface at various Vaal River and West Wits operations. The hard rock business processes hard rock material from underground as well as from marginal ore dumps. Surface Operations also includes Mine Waste Solutions (MWS) which operates independently and processes slurry material reclaimed hydraulically from the various tailings storage facilities. Uranium is produced as a by-product, as is backfill that is used as mining support in underground mined out areas.

Good progress is being made with the consolidation of the individual operations in each of these areas into three operating entities so as to eliminate any duplication of services and management. This consolidation will have both cost and efficiency benefits. As an initial step in this process, Great Noligwa mine employees have been successfully incorporated with those of Moab Khotsong. The consolidation of the West Wits mines and of Surface Operations is expected to follow in due course.

Key statistics
  Units 2014 2013 2012
Operational performance    
Tonnes treated/milledMt38.439.222.2
Pay limit (1)oz/t0.390.360.40
 g/t14.3513.3712.41
Recovered grade (1)oz/t0.2390.2040.219
g/t8.197.007.50
Gold production000oz1,2231,3021,212
Total cash costs$/oz849850873
Total production costs$/oz1,0871,0701,097
All-in sustaining costs (2)$/oz1,0641,1201,189
Capital expenditure$m264451583
Productivityoz/TEC4.404.474.19
Safety    
Number of fatalities 4611
AIFRper million hours worked11.8512.6313.24
People    
Average no of employees: Total 29,51132,40634,186
– Permanent employees 26,05628,52629,740
– Contractors  3,4553,8804,446
Employee turnover% 10128
Training and development expenditure$m37.54563
Environment    
Total water consumptionML27,21927,22823,813
Total water use per tonne treatedkL/t0.710.691.07
Total energy usagePJ11.3111.8011.65
Total energy usage per tonne treatedGJ/t0.290.300.52
Total greenhouse gas (GHG) emissions000t CO2e2,981 (3)3,025 (3) 3,009
Total GHG emissions per tonne treatedt CO2e/t0.080.080.13
Cyanide usedt10,1009,6886,129
No. of reportable environmental incidents 1310
Total rehabilitation liabilities:$m83.578.1148.8
– restoration$m12.210.043.7
– decommissioning$m71.368.1105.1
Community and government    
Community expenditure (4)$m 8.18.47.7
Payments to government$m144157251
– Dividends$m
– Taxation$m161281
– Withholding tax (royalties, etc.)$m181229
– Other indirect taxes and duties$m1
– Employee taxes and other contributions$m100122131
– Property tax$m553
– Other (includes skills development)$m566
  1. 1 Refers to underground operations only.
  2. 2 Excludes stockpile write-offs.
  3. 3The Eskom grid emission factor was revised by the National Business Initiative in consultation with Eskom, leading to a change in the electricity-related emissions reported for 2012 and 2013. The figure reported for 2012 included Nufcor.
  4. 4 Includes corporate social investment expenditure.

OPERATIONAL PERFORMANCE

Production

Production declined by 6%, predominantly a consequence of safety-related stoppages, the aftermath of the earthquake experienced on 5 August 2014, and unscheduled shaft maintenance at Mponeng.

The 5.3 magnitude earthquake affected the Vaal River mines. Production was halted at these operations for five to ten days to allow the aftershocks to subside and to undertake repairs before production resumed. At Mponeng, production was adversely affected by safety-related stoppages as well as an incident that occurred during shaft slinging, suspending operations for seven days to allow for significant repair work on damaged shaft steelwork and to return the shaft to safe levels of service.

Production from Surface Operations was negatively affected by the decreased grade of the material sourced from the marginal ore dumps. Mining flexibility has been improved to enable more active blending.

The region’s contribution to group attributable gold production declined to 28% from 32% in 2013. In addition, the Vaal River operations produced 1.3Mlb of uranium.

Costs

The intense focus on cost containment continued in 2014, in line with the Project 500 initiative to reduce overall group costs by $500m in the 18 months to end 2014, cost reduction initiatives were undertaken in the region. The emphasis on the management of labour costs, reef mining-related activities, power consumption, contractors and the implementation of service-optimisation strategies as well as a robust critical review of commodity- and services-related contracts all contributed to lower operating costs. Inflationary pressures, which included increases in electricity tariffs that exceeded inflation, were partially compensated for by cost savings from the Project 500 initiatives and also a weaker local currency. All-in sustaining costs for the year declined for the second consecutive year, 5% to $1,064/oz.

Growth and improvement

Project Zaaiplaats at Moab Khotsong, which was temporarily halted in 2013, remains on hold. Additional geological information gathered in the interim reflected a deterioration in the grade of the project, making it economically unviable at current gold prices.

At Mponeng, phase 1 of the deepening project to access the VCR progressed well. Although safety stoppages following a shaft incident led to some delays, stoping and ledging operations have begun. The emphasis in the coming year will be to increase the volume of ore reserve development so as to open up high-grade Ore Reserves. Given the slump in the gold price, phase 2 of this project to access the CLR was delayed slightly in 2014. Critical-path work continued and included the installation of ventilation and refrigeration infrastructure to enable the ramp-up to full project execution in 2015, should the capital budget be approved. This project will also investigate the viability of optimised shift schedules with a view to improving productivity and speeding up access to the higher-grade areas.

The uranium plant at Mine Waste Solutions (MWS) was successfully completed with the first deliveries in the fourth quarter of the year. The recovery in the uranium price during the year was encouraging.

Mineral Resource and Ore Reserve

As at 31 December 2014, the total Mineral Resource (inclusive of the Ore Reserve) for the South Africa region was 85.63Moz (2013: 94.27Moz) and the Ore Reserve 27.45Moz (2013: 30.9Moz). This is equivalent to around 37% and 48% of the group’s total attributable Mineral Resource and Ore Reserve respectively.

SUSTAINABILITY PERFORMANCE

People

The South Africa region’s workforce averaged 29,511 people in 2014 – 26,056 full-time employees and 3,455 contractors – as compared to 32,406 in 2013 and 34,186 in 2012 – a decline of 14% in two years. This decline in the workforce was a result of various cost rationalisation initiatives implemented across the group over the past two years. Productivity declined to 4.40oz/TEC in 2014 (2013: 4.47oz/TEC).

In the South Africa region, 94% of our workforce is represented by the four industry unions. Union representation in the South African gold mining industry as a whole is as follows: AMCU (27%), NUM (54%), Solidarity (2.5%) and UASA (6.5%).

During 2014, work continued with the incorporation of organised labour representatives in dialogue on business issues. In particular, we have engaged with them on the economics of our industry, the gold market and on the legal and statutory framework regulating industrial relations in South Africa. Employee engagement included quarterly briefs by the chief operations officer on the company’s financial and operational performance. In addition, to effectively engage on the restructuring processes, the region established a central restructuring plenary committee and a transformation committee, both aimed at achieving consensus on various issues and forging improved relations between management and the unions. AMCU signed a formal recognition agreement with AngloGold Ashanti in the fourth quarter of the year, and has been fully integrated in all statutory labour committees.

The second year of the current wage agreement became effective on 1 July 2014 with increases of 6.5% to 7% in wages. In line with the Deputy President’s Stability Agreement (Framework Agreement for a Sustainable Mining Industry entered into by Organised Labour, Organised Business and Government) and other items included in the 2013 wage agreement, we began work on related matters, particularly employee indebtedness. This is a concern at all levels. According to an audit conducted at mid-year, 1,900 employees in the South Africa region had at least one garnishee order in force against their wages and salaries. In terms of the indebtedness initiative, Masidibanise Izandla (’let’s put our hands together’) the services of legal firms have been retained to assist employees in their dealings with often dubious business practitioners, especially credit providers. In addition, dedicated financial consultants have been employed by the company to provide financial advice and to assist with debt consolidation and management, and ultimately to eliminate debt altogether. Every garnishee order in place is being scrutinised as are any instructions for new ones, prior to their implementation.

The next round of wage negotiations is due to begin early in 2015 as the current wage agreement comes to an end on 30 June 2015.

Given the increasing need for improved communication with employees in the region, three employee surveys were conducted during the year to identify specific needs and areas of concern. The results of these surveys highlighted several key requirements:

  • Improved employee communication, in terms of the frequency, quality and the quantity of information
  • Detailed investigations into unethical behaviour
  • Improved supervisor/management training as well as engagement

In response, engagement by senior management has been stepped up. Large group meetings (town hall type meetings) have been held. These initiatives were supplemented by mass meetings across all mines, hosted by the CEO, COO: South Africa and business unit general managers. Refer to Stakeholder engagement and materiality for further related information. A communication programme, Your voice matters, to engage with employees via a digital platform, has been implemented. This programme, which involves two-way communication between the company and its employees in the South Africa region, will enable the company to communicate with those employees who register to participate in the programme and for these employees to share their views with the company.

Safety

Despite the region recording its best safety performance ever, there were tragically four fatalities during 2014 (2013: six) – one at the Vaal River operations and three at the West Wits operations. Three of these were caused by falls of ground and one was the result of an incident involving piping and construction work.

All mines and plants in the region achieved 1 million fatality-free shifts and Kopanang, most notably, has recorded three million fatality-free shifts. This was achieved despite the impact of the 5.3 magnitude earthquake which resulted in minor injuries to 30 employees and the evacuation and safe return to surface of 3,300 people in all at the Vaal River operations.

While work remains to be done to achieve our target of zero harm, much of the improved safety performance can be attributed to the very successful visible felt leadership drive and the observable steps taken (installation of bolts and netting, training and technological improvements such as electronic systems to monitor the various aspects of underground working areas) to make the working environment safer. Employee surveys conducted during the year confirmed that ’Safety is our First Value’ is embedded in the psyche of employees.

Group-wide, safety efforts concentrated on expanding our understanding of how safety risks arise and why safety incidents occur so as to develop a critical control methodology. Given the higher frequency of safety incidents at the South African operations, the focus in 2014 was on embedding this methodology at these operations, with the emphasis on the two major safety risks: falls of ground and vertical transport.

Health

Health statistics in the region have improved significantly. One of the region’s major health challenges, occupational lung diseases (OLD), particularly silicosis, are managed primarily by reducing the level of exposure of employees to silica-bearing dust. During 2014, implementation continued of multi-stage filtration systems at ore transfer points as well as footwall treatment to prevent the infiltration of dust into working areas. The progressive introduction of improved controls has led to reduced exposure by South African employees to silica-bearing dust; 201 new cases were diagnosed in 2014 compared to 293 in 2013. Given the legacy around silicosis in the industry as a whole, AngloGold Ashanti, together with four South African mining companies, embarked on a joint collaboration to establish a process together with other stakeholders – government, labour, employees – to address related compensation and medical care in the South African gold mining industry.

The incidence of pulmonary tuberculosis (TB), another OLD, which has decreased substantially over the past 10 years, has begun to plateau (see the SDR for further details): 1.57% for 2014 as compared to 1.50% in 2013 and a national average of 1%. Over the past decade, the incidence of TB has improved by around 60%. Initiatives to combat TB, which apply to both employees and contractors, are aimed at addressing the wide range of underlying contributing factors to the disease and are being extended to communities around operations to further underpin their effectiveness.

Noise-induced hearing loss (NIHL) is prevented by the silencing of equipment, the wearing of hearing protection by employees and administrative controls. The incidence of NIHL continued to decline in South Africa, with 30 cases diagnosed in 2014 (2013: 38 cases).

Environment

There was only one reportable environmental incident for the year – a threefold improvement year-on-year. This performance exemplifies the ongoing operational improvements in process water containment, stormwater control and tailings pipeline management over the last five years. Also commendable is the work done at MWS in response to in-plant spillages and their containment, as well as the incorporation of MWS into the environmental management system of the South Africa region’s Surface Operations.

The risk of inter-mine flooding and the associated costs remains a high priority:

  • The Vaal River operations continue to monitor closely and pursue all avenues to reduce the potential financial burden of the intended closure of neighbouring mines in the Vaal River area. AngloGold Ashanti continues to use excess water from underground at its Vaal River operations for hydraulic tailings reclamation at MWS.
  • The West Wits operations continue to pump and discharge water at Blyvooruitzicht mine’s 4 and 6 shafts. Currently, the pumping of water is being conducted in terms of a directive to pump and discharge water pending the final issuing of a water use licence the application for which has been submitted to the regulatory authorities.

Since a carbon tax on greenhouse gas emissions for South Africa was first proposed in 2010, AngloGold Ashanti has actively engaged with government, industry partners and other experts to ensure that when introduced, the tax is appropriately tailored to the South African business context. Our financial models have been revised to include the potential impact of such a tax, currently scheduled to be introduced from the beginning of 2016. Almost 98% of AngloGold Ashanti’s emissions in South Africa are Scope 2 emissions, that is emissions resulting from the purchase of electricity from Eskom, the national power utility, which uses coal in its energy-generation process.

In the interim, the focus remains on reducing energy usage at our energy intensive, deep-level South African operations, from the perspective of both cost and emissions. These operations account for approximately 65% of the group’s greenhouse gas emissions and 36% of its energy usage. For more detail on the proposed carbon tax, see the SDR.

The region’s strategic environmental focus areas remain integrated water management, closure planning, waste management, knowledge management, legal compliance and the dust mitigation programme for tailings storage facilities.

Stakeholder engagement and communities

The delivery of community development projects is informed by the Social and Labour Plans (SLPs) compiled in accordance with the requirement of the South African Mining Charter and its accompanying scorecard targets. The initial SLPs were for the period 2010 – 2014 and the company’s performance against these plans and the targets set was audited during the course of 2014. The Moloto audit, concluded in November 2013, confirmed that by the end of 2014 AngloGold Ashanti would have met all its targets as required. Indeed, by December 2014 we have met all the Mining Charter Targets and exceeded some.

The second set of SLPs, for the period 2015 – 2019 has been submitted to the DMR and is available on our website under the Sustainability tab. The community development projects and targets detailed in these plans were compiled and agreed in discussions and negotiations with the communities involved and other significant stakeholders. The initial SLPs included board-approved commitments amounting to $46.4m (R418m) for local economic and enterprise development and community and human resources projects.

In 2014, $6.5m (R71.3m) was spent completing local economic development and on community and human resources projects. The region delivered several such projects in 2014, which were officially launched in Merafong, including a library and a science laboratory for schools in the Matlosana municipality as well another science laboratory for a school in Lusikisiki, one of our labour-sending areas.

In addition to these infrastructure projects, income-generating local-economic development projects began with the implementation of the social and labour plans (SLPs) for the Vaal River and West Wits operations. One of these projects, the Merafong Agricultural Project, employs 20 people and has already planted sugar bins on 2ha of land. This project is a partnership between AngloGold Ashanti, which funded the project, and the Merafong Local Municipality, which donated the land. Other partners are the departments of Agriculture and of Social Services. This is a true demonstration of how public-private partnerships can contribute meaningfully to local economic development and towards poverty reduction by creating and supporting sustainable livelihoods.

During the year work continued in the labour-sending areas in remote villages of the Eastern Cape. Employment was created through the support of a sheep-shearing project in Mthata, a cattle farm in Lusikisiki, and piggeries in Libode and Ngqelini. These projects are run by co-operatives and the women in these villages who have unlocked value in the agriculture and farming fertile Eastern Cape to generate income and derive disposable income.

Two youth business hubs in Merafong, also funded by AngloGold Ashanti, became operational in the reporting period. The hub located in Matlosana created 35 jobs almost immediately. The hubs were modelled around formalising what are traditionally informal businesses, such as hair salons and car washes, among others, and situating them in one central high-traffic location.

The Social and Institutional Development Fund, which finances approved projects requested by communities and NGOs which are beyond the scope of the SLPs and our Mining Charter commitments, addresses social challenges relating to the Millennium Development Goals such as helping to eradicate poverty, promote gender equality and sponsor youth development, among others. This fund spent a total of $1.3m in 2014 (2013: $1.4m), bringing the total spent to date to $4.4m, of which $1.5m was spent in labour-sending areas.

Illegal mining is of growing concern, particularly at the operations close by to those where mining has been suspended. See the section in this report entitled Analysis of our external environment for discussion on this.

External communication has also been improved with the This is Gold initiative, (www.thisisgold.co.za) which has been undertaken in collaboration with three other South African gold producers. This initiative provides insight into the local gold industry, its history, processes, its contribution to the South African economy and its role globally, as well as the work being done by the industry and the plans in place to improve its future prospects.

AngloGold Ashanti has six producing mines and processing operations – of which the group manages four – in five countries in the Continental Africa region, following much activity in 2014 with the sale of the Navachab mine in Namibia, the transition to limited mining at Obuasi in Ghana and the cessation of mining at Yatela in Mali.

Democratic Republic of the Congo

  • Kibali, which began commercial production in October 2013 is steadily ramping up production. The mine is adjacent to the town of Doko and 180km from Arua on the Ugandan border. The project is co-owned by AngloGold Ashanti (45%), Randgold Resources Limited (45%) and Société Minière de Kilo-Moto (SOKIMO) (10%), a state-owned gold mining company. Randgold Resources manages and operates the mine. It is expected that Kibali will be one of the largest mines of its kind in Africa.

Ghana

  • Iduapriem, which comprises the Iduapriem and Teberebie properties in a 110km² concession, 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, approximately 60km south of Kumasi. Mining operations have primarily been underground, to a depth of 1,500m. Following a two-year review of operational efficiencies, mining operations were significantly curtailed. A feasibility study investigating options to modernise and improve the life-of-mine plan is underway. The focus of the study is not only on the economic and technical aspects but also security, environmental obligations and community relations.

Guinea

  • Siguiri is a multiple open-pit oxide gold mine in the relatively remote district of Siguiri, around 850km northeast of the country’s capital, Conakry. The area has significant potential for gold mining and has long been an area of traditional artisanal mining. The gold processing plant treats about 30,000t daily. AngloGold Ashanti holds an 85% interest in Siguiri, with the remaining 15% held in trust for the nation by the Government of Guinea.

Kibali produces high-margin ounces at a cost significantly lower than the group average.

Mali

  • Morila is a joint venture between AngloGold Ashanti and Randgold Resources, which manages the mine, and in which each has a 40% interest. The Government of Mali owns the remaining 20%. Morila is situated 180km southeast of Bamako, the country’s capital. The operation ceased mining operations in 2009 and currently treats low-grade stockpiles and marginal waste. The plant, which incorporates a conventional carbon-in-leach (CIL) process with an up-front gravity section to extract the free gold, has an annual throughput capacity of 4.3Mt. In 2014, 18.4Mt of material from the pit and 3.2Mt of stockpile material were processed.
  • 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 south-western Mali, some 77km south-southwest of the regional capital Kayes. Mining takes place in five open-pits. On-site surface infrastructure includes a 4.9Mt per annum carbon-in-leach (CIL) gold plant where the ore is eluted and smelted.
  • 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 25km north of Sadiola. Mining excavation activities have been suspended. Processing of the heap leach pads and ore already mined will continue until the end of 2016. Ore extraction in most of the open pits has been completed and the mine has begun closure and rehabilitation procedures.

Tanzania

  • Geita, one of our flagship mines in the Continental Africa region, 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, which is currently mined as a multiple open-pit operation, has underground potential and is currently serviced by a 5.2Mt per annum carbon-in-leach (CIL) processing plant. While Geita generates its own power, the operation of its power generating facility is outsourced and fuel is delivered by road.
Key statistics
  Units 2014 2013 2012
Operational performance    
Tonnes treated/milledMt29.926.927.8
Pay limitoz/t0.0390.0490.041
 g/t1.3451.6691.273
Recovered gradeoz/t0.0540.0540.055
g/t1.661.691.70
Gold production (attributable)000oz1,5971,4601,521
Total cash costs$/oz783869830
Total production costs$/oz9771,0861,060
All-in sustaining costs (1)$/oz9681,2021,235
Capital expenditure$m454839925
Productivityoz/TEC14.369.9710.97
Safety    
Number of fatalities 025
AIFRper million hours worked1.561.972.26
People    
Average no of employees: Total 16,07016,62516,621
– Permanent employees 8,73910,77810,014
– Contractors 7,3315,8476,607
Employee turnover (2) % 64 115
Training and development expenditure$m211NR
Environment    
Total water consumptionML17,58221,031(3) 19,132
Total water use per tonne treatedkL/t0.560.670.60
Total energy usagePJ8.9512.0112.13
Total energy usage per tonne treatedGJ/t0.290.380.38
Total greenhouse gas (GHG) emissions000t CO2e785969978
Total GHG emissions per tonne treatedt CO2e/t0.030.030.03
Cyanide usedt10,54913,72014,065
No. of reportable environmental incidents 455
Total rehabilitation liabilities:$m463.2411.0427.5
– restoration$m291.9273.3275.1
– decommissioning$m171.3137.7152.4
Community and government    
Community expenditure$m 3.9 13.313.3
Payments to government$m306320552
– Dividends$m1621 (4) 51
– Taxation$m7972239
– Withholding tax (royalties, etc.)$m108106149
– Other indirect taxes and duties$m274638
– Employee taxes and other contributions$m696459
– Property tax$m156
– Other (includes skills development)$m6610
  1. 1 Excludes stockpile write-offs
  2. 2 Includes the retrenchment of the entire workforce at Obuasi.
  3. 3 Annual water usage data restated to exclude domestic water consumption.
  4. 4 Adjusted for Ghana – additional 2012 dividend.
  5. NR = not reported

OPERATIONAL PERFORMANCE

Production

The ramp up and first full year of production at Kibali more than offset the decline at Yatela and the half-year contribution from Navachab which was sold in June 2014. The region’s attributable production increased by 9%.

Kibali produced its first gold in 2013, ahead of schedule, and delivered 527,000oz in 2014, of which 45% was attributable to AngloGold Ashanti. Over the first 12 years of operation – underground and open-pit – Kibali is expected to produce an annual average of 600,000oz. These are high-margin ounces produced at a cost that is lower than the group average.

During 2014, production at Kibali came largely from the open pit, while significant development of underground workings was carried out. Underground mining commenced following the start of blasting of the first stope in the latter of the year. The oxide plant was successfully ramped up in early 2014 with the sulphide plant commissioned in the second half. Kibali’s Ore Reserve is currently estimated at around 11Moz (attributable: 4.94Moz), accounting for 26% of the Continental Africa region’s Ore Reserve. Given the mine’s current life expectancy, operations should be sustained until 2031.

Our largest operations in the region, Geita and Siguiri, recorded strong performances for the year. At Geita, tonnes of hard sulphide ore milled surpassed 5Mt for the first time, a result of better mill running time and fragmentation control. This followed improvements in blast fragmentation, the installation of a secondary crusher and improved carbon management systems in the leach circuit. These improvements offset grade declines at the Star & Comet pit; the failure of the pit wall at Nyakanga Cut 7; and delays at Geita Hill East pit.

During the fourth quarter, an evaluation of the merits of switching from owner to contractor operations at Geita was initiated. A change could reduce costs, which would align with the group strategy of enhancing operational cash flows. Investigations into the feasibility of mining and processing harder ore have begun, with a view to potentially extending the mine’s life.

At Siguiri, tonnes treated remained stable with a higher-than-expected improvement in recovered grades contributing to an increase in production. The grades, however, declined in the latter part of the year as higher-grade ore resources were depleted.

In Mali, production decreased overall as the mines continued to wind down, treating lowergrade waste tonnes.

At Obuasi, while output increased marginally year-on-year, underground production was halted in the fourth quarter. Processing of tailings and aboveground stockpiles is continuing. This was in line with the initiative to downscale the operation temporarily while a feasibility study is undertaken to explore options for its long-term sustainability.

Tailings retreatment continued during the year, contributing to an improvement of close to 2% in ounces produced year-on-year, as we continued to fulfil environmental responsibilities. Development of a decline from surface to the existing underground mining blocks continued in 2014. The decline will allow development of the appropriate infrastructure to enable mechanised operations and de-bottleneck the mine, which was constrained by an outmoded, labour-intensive mining method and also ageing and sub-optimal vertical hoisting infrastructure.

By year-end Obuasi had successfully transitioned to limited operations and the entire workforce had been retrenched. A limited number of employees was recruited on a one-year fixed-term contract while the feasibility study is underway. The study is due to be completed in 2015.

Costs

Project 500 gained significant traction in the region, with noteworthy gains made in several areas. In looking to improve process recoveries, an initiative to optimise dissolved oxygen levels improved recoveries across all major operating sites, particularly at Geita, Siguiri and Iduapriem. Mine plans were optimised, with low-margin or loss-making ounces removed, while labour efficiencies were realised across the region. The expatriate contingent was reduced and consultant services curtailed. At Geita, mining efficiencies resulted in greater tonnages moved with no additions to the fleet, helping reduce unit mining costs. Work was done to realise benefit of a more favourable environment for buyers of contract mining services due to excess capacity across the globe. Competitive bidding processes for mining and related contracts were held at Siguiri, Geita, Sadiola and Iduapriem, with all resulting in new contractors or more favourable contracts agreed. Considerable effort was also directed at reducing working capital through the optimisation of consumable stores across the regional portfolio, and engagement with governments in Tanzania and Guinea to reduce indirect tax lock-ups.

The region as a whole also continued to realise the benefit of more consistent operating performance with tight management of all costs and capital. The region benefited from the inclusion of the first full-year’s production from the Kibali mine, which contributed production at lower-than-average cash cost. The sharply lower fuel price in the fourth quarter also aided cost control efforts, particularly for open pits mines which operate large truck and shovel fleets and generate all or part of their own power from diesel or heavy fuel oil, like the major mines in the region Geita, Kibali and Siguiri. As with the rest of the group, the focus on strict capital allocation and a more concentrated exploration programme was also a strong feature in Continental Africa. The net result of these initiatives was a 19% reduction in all-in-sustaining costs to $968/oz, the lowest in the group.

Growth and improvement

Our emphasis has been on improving operational and cost efficiencies in response to gold’s decline. Kibali’s cost-efficient production ramp up has already contributed substantially to overall production and a containment of overall costs per ounce. The production ramp up at Kibali will further contribute additional ounces at a cost that is lower than the group average. The focus for 2015 will be completion of the paste plant and the second hydro-power station – Ambarau. The sinking of the vertical shaft remained ahead of schedule with a shaft depth of 720m at the end of the year with only 40m remaining.

In Guinea, despite indications of promising new developments, greenfields exploration teams had to be withdrawn during the latter part of the year as a precaution against the outbreak of the Ebola virus disease.

SUSTAINABILITY PERFORMANCE

People

The average number of people in the workforce in the region declined, largely a result of the retrenchment undertaken at Obuasi, to an average of 16,070 in 2014 from 16,625 in 2013. Regional productivity improved significantly to 14.36oz/TEC. Most retrenchments were undertaken toward the end of the year.

Overall, the labour relations climate remained relatively positive and stable. At Obuasi, labour relations were peaceful and the relationship with the Ghana Mineworkers Union (GMWU) was constructive throughout the retrenchment process and the transition period, during which production was downscaled. Refer to Stakeholder engagement and materiality for additional information.

Separate wage negotiations were conducted at Iduapriem where the existence of four different unions representing different categories of employees presents a dynamic and challenging labour relations environment. Although negotiations covering the 2014 period were protracted and took several months to finalise, a mutually beneficial settlement agreement was reached without loss of production.

At Siguiri, the annual 2014 wage negotiations were concluded amicably as they were at Yatela and Sadiola. As part of the Yatela mine closure, a life skills training programme for employees facing retrenchment was completed in November 2014. Maiden annual wage negotiations were successfully concluded with the Tanzanian Mines Energy Construction and Allied Workers Union (TAMICO) which entered into a full recognition agreement following the union’s achievement of the majority status required for the purposes of collective bargaining. A joint capacity building workshop for both management and union representatives was successfully conducted.

Health

Occupational health remains a top priority for Continental Africa, as with all our operations. The main focus of the regional occupational health strategy is to combat noise-induced hearing loss (NIHL), to reduce the incidence of silicosis at underground operations in Ghana and fight malaria. In 2014, a total of 152 cases of NIHL were reported in all (the high number due to exit medical examinations of employees following their retrenchment) and nine cases of silicosis in Ghana.

The introduction of improved reporting systems in the Africa region highlighted the incidence of NIHL. These will be addressed by the introduction of engineering and administrative controls, including the use of personalised hearing protection which offers greater protection and a greater level of comfort.

One of the most significant community health risks in the region is malaria, which occurs particularly in Ghana, Guinea, Mali, and Tanzania. The malaria intervention programmes in and around our operations in these countries continued as did its roll-out in 25 districts in Ghana under the auspices of the Global Fund project.

With the outbreak of the Ebola virus disease in West Africa, this became a serious health risk in Guinea in particular and to a lesser extent in Mali. Measures were put in place to ensure the company was prepared for any potential impact. By year-end, there had been no such impact on our operations, although exploration activities in Guinea were suspended as a precautionary measure.

Environment

Mining activities at the Yatela mine in Mali halted on 30 September 2013 and rehabilitation is planned for completion in early 2019, with final relinquishment of mining rights expected to be in 2020. Read more detail about closure preparations at the Yatela mine in the SDR.

In addition to the operational challenges faced at Obuasi, AngloGold Ashanti faces a range of socio-economic and environmental challenges at both of its operations in Ghana. Most environmental issues in this region relate to the management of water, waste and tailings, rehabilitation and pollution. Hand-in-hand with the downscaling of operations at Obuasi, a major undertaking during the year was continued work to resolve the environmental legacy issues at the mine. A 15-month environmental management plan (EMP) covering the period from October 2014 to December 2015 was submitted to the Environmental Protection Agency (EPA) in July, and a formal response is awaited. A full EMP (2016 to 2019) will be developed as part of the feasibility study for submission to the EPA in 2015. For further detail, see the SDR..

Stakeholder engagement and communities

Current work regarding artisanal and small-scale mining (ASM) is focused on developing more comprehensive baseline information on the nature and scale of ASM activity surrounding our operations. A database of relevant information on ASM activity is being compiled to support our engagement with government. Based on this information, a multi-stakeholder partnership was established that includes other large-scale miners, regulators and ASM associations. Funding by the World Bank led to the formation of a management advisory group focusing on a pilot best practice operation in the village of Lwangasa, near Geita in Tanzania. This project, which is supported by AngloGold Ashanti, aims to formalise ASM by facilitating the construction of a small-scale mine and providing training on safer, more efficient and environmentally friendly mining and processing methods.

Resettlement processes were concluded successfully at Geita and at Iduapriem. At Geita, 18 households which had been living in temporary shelter were relocated to new housing in Tarzan Valley and at Iduapriem, a 70-household community was resettled close by at Mankessim, an area which is closer to amenities.

A limited relocation action plan (RAP) was completed for the Mofu satellite pit near Kibali. The Gorumbwa RAP is expected to begin during 2015 with completion planned for 2016.

Human rights

An ambassador for human rights has been nominated at each site in the region to advance human rights programmes and monitor compliance. Human rights audits are included in combined assurance processes to identify potential human rights risks. Where security incidents occur, they are dealt with in terms of the Voluntary Principles on Security and Human Rights (VPSHR). These principles, together with our human rights policy, drive our approach to human rights. During 2014, two VPSHR incidents occurred in the region.

At Geita mine the use of technology in conjunction with the deployment of skilled rapid reaction teams, has been used to good effect to overcome the challenge of securing company property. The mine, which covers an area of approximately 196.5km2, has been broken down into geographical sectors using high-tech thermal surveillance cameras to detect potentially illegal activity. The use of technology removes security personnel from situations of potential conflict and ensures that response teams are furnished with the equipment and required information to respond to situations if they occur.

AngloGold Ashanti’s operations in the Australasia region include, Tropicana, one of our two newest mines. Tropicana completed its first full year of production in 2014.

The two AngloGold Ashanti operations in the region are:

  • Sunrise Dam, which is wholly-owned, is located 220km northeast of Kalgoorlie and 55km south of Laverton in Western Australia. Mining of the Crown Pillar at the base of the 490m deep pit was completed in early 2014. By year-end, underground mining, which is conducted by a contract mining company, was the primary source of ore. Ore is treated via conventional gravity and carbon-in-leach (CIL) processing plant which is owner-managed.
  • Tropicana, a joint venture between AngloGold Ashanti (70% and manager) and Independence Group NL (30%), is located 200km east of Sunrise Dam and 330km east-northeast of Kalgoorlie. First gold was poured ahead of schedule and on budget in September 2013, following development approval in November 2010. The open pit operation features a large scale, modern processing plant which uses conventional carbon-in-leach technology and includes high-pressure grinding rolls for energy-efficient comminution. Mining is carried out by a contract mining company and the plant is owner-managed.
Key statistics
  Units 2014 2013 2012
Operational performance    
Tonnes treated/milledMt7.84.33.4
Pay limitoz/t0.070.090.08
 g/t2.292.822.42
Recovered gradeoz/t0.0720.0720.070
g/t2.452.452.39
Gold production (attributable)000oz620342258
Total cash costs$/oz8041,0471,211
Total production costs$/oz1,0701,3331,358
All-in sustaining costs (1)$/oz9861,3761,680
Capital expenditure$m91285369
Productivityoz/TEC62.0049.6443.46
Safety    
Number of fatalities 000
AIFRper million hours worked10.73(2) 7.916.33
People    
Average no of employees: Total 832925494
– Permanent employees 194281110
– Contractors 638644384
Employee turnover% 15 2214
Training and development expenditure$m 1 21
Environment    
Total water consumptionML8,0114,8283,104
Total water use per tonne treatedkL/t0.841.030.92
Total energy usagePJ5.522.812.08
Total energy usage per tonne treatedGJ/t0.580.600.62
Total greenhouse gas (GHG) emissions000t CO2e359174125
Total GHG emissions per tonne treatedt CO2e/t0.040.040.04
Cyanide usedt4,3981,6581,331
No. of reportable environmental incidents 021
Total rehabilitation liabilities:$m65.553.161.5
– restoration$m32.021.926.8
– decommissioning$m33.531.234.7
Community and government    
Community expenditure$m 0.20.50.5
Payments to government$m674988
– Dividends$m
– Taxation$m8747
– Withholding tax (royalties, etc.)$m191611
– Other indirect taxes and duties$m
– Employee taxes and other contributions$m402630
– Property tax$m
– Other$m
  1. 1 Excludes stockpile write-offs.
  2. 2 Restated owing to injury reclassifications.

OPERATIONAL PERFORMANCE

Production

With the ramp up in production at Tropicana during the course of 2014, the mine’s first full year of operation, and considerably increased levels of output at Sunrise Dam, total production for the Australasia region was 81% higher.

At Sunrise Dam the underground mine transitioned to become the primary source of mill feed in 2014, delivering 2.43Mt of ore to the mill for the year. Stockpiled intermediate grade ore (average 1.45g/t) was blended with the underground ore to meet the processing plant capacity, which saw throughput reach 3.8Mt in 2014, a 10% improvement on 2013 despite the higher proportion of harder underground ore treated. Plant performance improved due to the focus on engineering reliability, which significantly reduced plant down time.

An intensive two-year project on planning systems and operational efficiencies resulted in substantial productivity improvements in the underground mine, culminating in a record 675,503t of underground ore being mined in the December quarter – equivalent to an annualised rate of 2.7Mt. This mining rate is expected to be maintained in 2015. The multipronged productivity improvement strategy included an innovative approach to grade control based on reverse circulation (RC) drilling that emulated the highly successful grade control process in the open pit. The change to RC drilling combined with productivity improvements gained in the underground mine drove mining costs down by more than 50% over the two-year period.

Tropicana, which was officially opened in March 2014 by the Western Australian Minister for Mines, the Hon. Bill Marmion, completed its first full year of operation. In total, the mine produced 511,000oz of which AngloGold Ashanti’s share was 358,000oz. Open pit mining focused on the Havana and Tropicana pits in 2014. During the year additional mining fleet was brought to the site to counteract a decrease in mining rates caused by poor equipment availability and lower-than-planned productivity. Mining productivity improved in the fourth quarter and it is anticipated that productivity rates will be back on target in the first quarter of 2015. Despite these challenges, feed to the processing plant was on budget, enabling treatment of 5.7Mt for the year at a head grade of 3.06g/t and metallurgical recovery of 90%. Mine-to-mill reconciliation, in terms of both tonnes and grade, aligned extremely well, providing confidence in production forecasts going forward.

Costs

Total cash costs for the region declined by 23% and all-in sustaining costs by 28%. Costs for the Australasian region were positively affected by the ramp-up to full production at Tropicana, and productivity improvements at Sunrise Dam. However, at Tropicana these unit cost reductions were impacted by higher mining costs resulting from fleet productivity issues and increased plant maintenance costs. These cost increases however, were offset by savings in other areas resulting in the operation delivering on the cost performance anticipated in the feasibility study, consistent with market guidance.

Growth and improvement

At Tropicana, additional maintenance and engineering work was carried out in the processing plant during the year to close out construction work following commissioning and to optimise sections of the plant with a view to lifting throughput beyond nameplate capacity in 2015. At year-end regulatory approvals were received to complete an expansion of the process water supply borefield that provides water to the operation. By the end of the first quarter in 2015, an additional 27 bores will have been installed and commissioned to take the number of bores servicing the plant to 51 and capacity from approximately 750t of water per hour (tph) to more than 1,000tph.

Analysis of data from a 3D seismic survey which was conducted across the Tropicana ore bodies is expected to be completed in the first half of 2015. This analysis will enable more accurate and more cost effective targeting of deep drill holes to test for extensions of mineralisation beneath the current open pit. This drilling data will augment work already carried out on the Havana Deeps study to determine if the down plunge extensions to the ore bodies continue to the north below Tropicana and Boston Shaker. Ultimately, this information will determine whether these ore bodies could be mined via a large open pit or by underground methods.

In July 2014, AngloGold Ashanti signed agreements with a natural gas infrastructure company for the transportation of natural gas to Sunrise Dam and Tropicana. It is expected that this will provide continuity of fuel supply, reduce exposure to diesel price volatility and significantly reduce the number of trucks on the site access roads. This will yield important safety benefits and will help in reducing road maintenance costs. Construction is scheduled to start in the first quarter of 2015 with first gas due to be available at Tropicana in January 2016. The power stations at both mines will be modified to run on 100% natural gas. Backup diesel capability will be retained for emergencies. Gas power generation is expected to reduce cash operating costs.

Mineral Resource and Ore Reserve

At 31 December 2014, the total attributable Mineral Resource (inclusive of the Ore Reserve) for the Australasia region was 9.58Moz (2013: 8.63Moz) and the attributable Ore Reserve, 3.53Moz (2013: 3.81Moz). This is equivalent to around 4% and 6% of the group’s attributable Mineral Resource and Ore Reserve respectively.

SUSTAINABILITY PERFORMANCE

People

The workforce in the Australasia region averaged 832 – 194 full-time employees and 638 contractors. Productivity remained high, with the Australasia region reporting 62.00oz/TEC in 2014 (2013: 49.64oz/TEC), again the highest in the group.

Safety

No fatalities were reported in the region and the 2014 AIFR was 10.73 per million hours worked (2013: 7.91 – restated). The deterioration in safety performance was due to the reduced number of hours worked as construction at Tropicana was completed. Sunrise Dam has retained its independently verified OHSAS 18001 rating with Tropicana scheduled for its first OHSAS 18001 certification audit in 2015.

Diesel particulate exposure has recently been identified as a potential health risk in Australia. Efforts to mitigate this potential impact are at an early stage.

Environment

Environmental management in the Australasian region has seen more prescriptive regulations and an increasing requirement to provide greater transparency, more inclusive consultation and more detailed public reporting on performance. Both Tropicana and Sunrise Dam continued to perform well in terms of the management of environmental incidents as they focus on their three-year safety and environmental management plans, which include key performance indicators on reportable incidents.

Water management is a focus area, mainly due to the arid environment in the Western Australian goldfields where the only available ground water is highly saline. Short-term water supply constraints at Tropicana are being addressed with the expansion of borehole infrastructure to increase the capacity of the water abstraction and delivery system, as discussed above under growth and improvement. Potable water used in the accommodation villages at both Sunrise Dam and Tropicana is desalinated using a reverse osmosis process and waste water from the Tropicana village is in turn used in the processing plant where low salinity water is required, such as in the gold elution circuit.

Biodiversity is another feature of the safety and environmental management plan and this was an integral part of the development of Tropicana. As part of the operation’s biodiversity offsets strategy in its approved environmental management plan, the Great Victoria Desert Biodiversity Trust was established. A condition of the Federal Environmental Protection and Biodiversity Conversation Act approval for the mine, the trust reflects the Tropicana Joint Venture partners’ recognition of the need to base environmental management decisions on robust science. The trust, in a model unique to the Western Australian mining and environmental landscape, will fund research on the remote Great Victoria Desert, where the mine is located. An independent trustee is accountable for the trust’s financial management and the trust is being administered by a management panel comprising an independent chairman, and representatives of Western Australia’s Department of Parks and Wildlife and the company. Technical advisory panels will guide scientific decisions and provide third party reviews and input into the research and on-ground conservation work. The trust’s aim is to promote knowledge and understanding of the Great Victoria Desert region and its biodiversity so as to benefit conservation and scientific knowledge.

The Australian government withdrew its proposed carbon tax legislation during the course of the year.

Stakeholder engagement and communities

In Australia, a ’Think Local, Buy Local, Employ Local’ strategy has been adopted at both the Australian operations to promote the growth of local supply networks. In terms of the ’Buy Local’ programme, where capability exists and where there is a competitive value proposition, goods and services are procured from local vendors in preference to those from outside the region. Procurement spend in the Goldfields-Esperance region, in which AngloGold Ashanti’s operations are located, is currently 18% of total spend, with procurement from businesses in the rest of the state of Western Australia making up a further 78% of the total.

AngloGold Ashanti has also played a leading role in developing indigenous-owned businesses. An indigenous business development programme offers structured business coaching and mentoring and five indigenous-owned businesses are currently supplying goods and services to operations in Australia. For more information, see the SDR.

Youth development programmes which aim to create opportunities for young indigenous people are also a priority, especially given the remote and isolated location of our operations in Australia, which is characterised by limited community resources, poor education and health, minimal opportunities for work and high unemployment. Work readiness programmes seek to support the transition of indigenous, female and disadvantaged youth to the workplace through training and work experience which can lead to employment in the mining industry.

AngloGold Ashanti has four mining operations – both open pit and deep level mining – in the Americas region. In addition, there is an active greenfields exploration programme underway in Colombia.

Argentina

  • Cerro Vanguardia, in which AngloGold Ashanti has a 92.5% stake, is the company’s sole operation in Argentina. Fomicruz, a state company operating in the province of Santa Cruz, owns the remaining 7.5%. Located to the northwest of Puerto San Julián in the province of Santa Cruz, Cerro Vanguardia operates multiple small open pits with high stripping ratios and multiple narrow-vein underground mines. The metallurgical plant has a daily capacity of 3,000t and includes a cyanide recovery facility.

Brazil

  • AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração ), which is wholly owned, comprises two operational complexes located in the state of Minas Gerais, close to the city of Belo Horizonte:
    • The Cuiabá complex includes the Cuiabá and Lamego mines and the Cuiabá and Queiroz plant complexes. Cuiabá has been in operation for 29 years while Lamego is a more recently developed underground mine. Ore from the Cuiabá and Lamego mines is processed at the Cuiabá gold plant. The concentrate produced is transported 15km by aerial ropeway to the Queiroz plant for processing and refining. Total annual capacity of the complete Cuiabá circuit is 1.7Mt. The Queiroz hydrometallurgical plant also produces around 200,000t of sulphuric acid as a by-product, which is sold commercially on local Brazilian markets. The Cuiabá complex is changing its mining method from cut-andfill to sub-level stoping so as to increase the contribution of narrow-vein ore bodies to production (from 15% to 40%) and to improve rock engineering controls.
    • The Córrego do Sítio complex comprises one surface (oxide) and two underground (sulphide) mines, as well as a heap leach pad and sulphide plant.
  • Serra Grande, which is wholly owned by AngloGold Ashanti, is located in central Brazil in the state of Goiás, about 5km from the city of Crixás. It comprises three mechanised underground mines: Mina III (the ore body IV), Mina Nova (the Pequizão ore body) and Palmeiras – and an open pit in the outcrop of the Mina III ore body. One dedicated metallurgical plant treats all ore mined. Annual plant capacity is 1.3Mt. The mine has enhanced the group’s production, Ore Reserve and Mineral Resource profiles through the 100% ownership, making a positive contribution toward AngloGold Ashanti’s near-term gold production profile in Brazil.

United States

  • AngloGold Ashanti holds a 100% interest in the Cripple Creek & Victor (CC&V) Gold Mining Company’s Cresson mine, located in the state of Colorado. A surface mining operation provides oxidised ore to a crusher and valley leach facility, one of the largest in the world. Higher-grade ore with more sulphidic properties will be processed in a carbon-in-pulp (CIP) mill to achieve better recoveries. A two-phase mine-life-extension (MLE) project is well underway and is expected to increase production significantly from 2015.

Colombia

  • Two advanced major exploration projects, La Colosa and Gramalote, are currently underway in Colombia. Extensive exploration activities are also being conducted in the region, across a reduced mineral tenement portfolio, by either AngloGold Ashanti teams or together with joint venture partners. A significant portion of the year was devoted to a third noteworthy Quebradona project area, releasing the maiden resource for Nuevo Chaquiro deposit. Refer to the section Planning for the future for further details.
Key statistics
  Units 2014 2013 2012
Operational performance    
Tonnes treated/milledMt26.126.725.7
Pay limitoz/t0.0340.0260.024
 g/t1.1560.8970.822
Recovered gradeoz/t0.0350.0360.034
g/t1.131.201.16
Gold production (attributable)000oz9961,001953
Silver (attributable)Moz3.13.32.4
Total cash costs$/oz709671669
Total production costs$/oz942886907
All-in sustaining costs (1)$/oz1,0109701,006
Capital expenditure (100% basis)$m394410409
– Attributable (including Colombia)$m390405395
– Attributable (excluding Colombia)$m388391387
Productivityoz/TEC16.3516.6317.47
Safety    
Number of fatalities 201
AIFRper million hours worked3.81 (2) 4.71 (2)5.20
People    
Average no of employees: Total (3) 8,5888,3747,896
– Permanent employees 5,9445,9795,509
– Contractors 2,6442,3952,387
Employee turnover% 13 1411
Training and development expenditure (excluding Colombia)$m236
Environment (excludes Colombia)    
Total water consumptionML12,17011,7327,456
Total water use per tonne treatedkL/t0.450.440.29
Energy usagePJ6.056.065.88
Total energy usage per tonne treatedGJ/t0.230.230.23
Total greenhouse gas (GHG) emissions000t CO2e449399389
Total GHG emissions per tonne treatedt CO2e/t0.0170.0130.015
Cyanide (2) usedt6,4286,2035,807
No. of reportable environmental incidents 000
Total rehabilitation liabilities (includes Colombia):$m272.8236.6249.5
– restoration$m221.9194.3211.9
– decommissioning$m50.942.337.6
Community and government (includes Colombia)    
Community expenditure$m 3.7 5.75.1
Payments to government$m261314356
– Dividends$m810
– Taxation$m69103146
– Withholding tax (royalties, etc.)$m384744
– Other indirect taxes and duties$m8810
– Employee taxes and other contributions$m9710094
– Property tax$m233
– Other$m474549
  1. 1 Excludes stockpile write-offs.
  2. 2 Restated owing to injury reclassifications and/or progression of injury severity.
  3. 3 100% basis and excluding Colombia and Denver regional office.

OPERATIONAL PERFORMANCE

Production

The year was a challenging one overall for the Americas operations and overall production from the region declined marginally. Higher production from AGA Mineração and Cerro Vanguardia failed to offset declines at CC&V and Serra Grande. Production was somewhat hampered by lower grades for some mines as well as negative stockpile movements. Cerro Vanguardia’s production for 2014 was the highest in 11 years, due mainly to improved heap-leach production.

AGA Mineração continued to deliver a strong performance with increased tonnage and feed grades at both the Cuiabá and Córrego do Sítio complexes. Development here exceeded expectations and production began from the new ore body at Córrego do Sítio (Sulphide II) and full production rates were achieved at the underground Mine I.

At CC&V, production was negatively affected by several factors including increased amounts of clay in the ore that resulted in reduced volumes and lower-grade ore being supplied to the crusher. Certification delays for an exposed liner necessitated modifications to the heap-leach stacking plan, leading to deferred production in the early part of 2014.

The Americas region’s contribution to group attributable production declined to 22% due to growth in Australia and Continental Africa. In addition, the region produced 3.5Moz (attributable) of silver as a by-product.

Costs

Despite the intense focus on limiting cost increases over the past year, regional costs increased by around 5%, due largely to inflationary pressures in the South American countries. The higher levels of production at AGA Mineração and Cerro Vanguardia unfortunately failed to offset increased costs at Serra Grande and CC&V. Although overall costs increased at Cerro Vanguardia due to deferred stripping adjustments, the negative impact of stockpile movement and inflationary pressures and wage increases, these were partially countered by the increased production and weaker exchange rates. The depreciation of both the Brazilian real and Argentinian peso helped to limit cost increases in those countries, as did various cost management initiatives. Operating challenges resulted in regional all-in sustaining costs increasing by 4%.

Taxation and royalty payments were lower at all operations, in line with subdued gold and silver prices.

In line with the group cost optimisation drive, the focus of savings initiatives in the Americas region was on labour, contractors, energy, consumables and working and stay-in-business capital. Various initiatives aimed at efficiency and production improvements (underground mine design optimisation, tyre life extension, and the optimisation and stabilisation of CIL and regeneration circuits), continued.

Cost savings initiatives at CC&V focused on improving efficiencies derived from consumables and tyres, and better fleet time management. This enhanced crusher throughput and resulted in savings of $4m.

In Brazil, potential savings identified in 2013 were addressed by initiatives implemented in 2014. These cost and cash management programmes involved productivity improvements, process optimisation, and reductions in power costs, materials pricing and in administrative expenses.

Growth and improvement

Various growth programmes are underway at all operations in the region, the most significant of which is CC&V’s expansion project. The first part of the two-phase mine life expansion (MLE) project began production in 2011 and is expected to continue until 2016. MLE2 will expand the operation to include a second valley heap-leach facility (VLF), a CIP mill to process sulphide material and an associated gold recovery plant. This MLE project is expected to significantly increase production for CC&V while reducing operating costs. The mill began commissioning at the end of 2014 and production is scheduled to begin in the first half of 2015. The second VLF is due to start production in the second half of 2016.

At Cerro Vanguardia, an underground mining expansion project is being undertaken to improve efficiencies and productivity through underground mine design optimisation and optimisation and stabilisation of the CIP and regeneration circuits.

At the Brazilian operations, the focus was principally on optimisation initiatives to improve operational efficiencies. At AGA Mineração’s Córrego do Sítio complex, full production rates were improved at both the sulphide and oxide mines. The brownfields drilling programme at Córrego do Sítio continued and identified satellite ore bodies close to existing infrastructure. These exploration successes will potentially improve production both in the short term and over the life of mine.

Colombia remains a key area of focus for the exploration programme and continues to yield promising results. A particular success was the release of the maiden Inferred Mineral Resource estimate for Nuevo Chaquiro, which is part of the Quebradona greenfields exploration programme. Studies and engagement with the local communities continue.

Mineral Resource and Ore Reserve

As at 31 December 2014, the total attributable Mineral Resource (inclusive of the Ore Reserve) for the Americas region was 72.48Moz (2013: 61.06Moz) and the attributable Ore Reserve, 7.56Moz (2013: 8.82Moz). This is equivalent to around 31% and 13% of the group’s attributable Mineral Resource and Ore Reserve respectively.

SUSTAINABILITY PERFORMANCE

People

On average, the workforce in the Americas region totalled 8,588 people for the year – 5,944 full-time employees and 2,644 contractors – as compared to 8,374 in 2013. Productivity for the region was 16.35oz/TEC as compared to 16.63oz/TEC in 2013.

Although the decline in commodity prices and the slowdown in the Brazilian economy will potentially affect the unemployment rate and possibly reduce the competition for employment in Brazil, it is not certain that this will eliminate the skills shortfall.

Safety

Two fatalities were reported in the Americas region (2013: 0). Two contractor employees lost their lives in an incident at AGA Mineração’s Cuiabá mine during the renovation of the ventilation shaft when the braking mechanism for a rope holding a suspended platform in place failed. The AIFR for the region was 3.81 per million hours worked in 2014 (2013: 4.74 – restated).

In Brazil, where there was a renewed emphasis on safety, the Consequences policy was launched which is based on ten key rules which are to be followed by all employees and contractors. This policy standardises and makes more transparent the recognition of positive safety behaviour and safe mining practice. This is intended to develop and build on AngloGold Ashanti’s preventative safety, health and environment policies.

Health

CC&V’s health programme continues to be successful through ongoing noise testing and monitoring, as well as continued dust sampling and training. To ensure a drug-and alcohol- free workplace, random drug testing continued throughout the year as did third-party post-accident and reasonable suspicion testing. At Cerro Vanguardia, trainings sessions and employee medical examinations continued.

In Brazil, along with occupational screening tests, the company continued with the quality of life programmes, such as Mais Viver (Live More). This programme encourages employees to eat more healthily (with professional nutritional guidance) and to participate in sport (walking and running groups have been formed). Preventive campaigns focused on breast and prostate cancer, and HIV/Aids.

While it is a potential risk at underground operations, silicosis has been eradicated at our Brazilian operations, a result of mechanisation, improved ventilation, dust suppression, personal preventative measures and statutory limitations on the length of service of underground employees.

Environment

No significant environmental incidents were reported during the year. All the Americas operations remain ISO 14001 compliant and have been certified in terms of the international cyanide management code.

In 2014, the Brazilian operations obtained all relevant licensing for the Cuiába dam-raising and for the consolidation of the Corrégo do Sítio complex. The underground water recirculation project implemented at the Cuiába mine was among the top five finalists among 99 projects competing for the national prize for Best Practices in Water Management, organised by the federal government’s National Water Agency (ANA).

Colombia is one of the most bio-diverse countries in the world and there is thus a high level of environmental awareness and of the need to limit the adverse impact on the environment. AngloGold Ashanti, recognising this from the start of mineral exploration activities in 2006, has made every effort to minimise the impact of its activities and to implement any mitigations plans if necessary. During 2014, there were no reportable environmental incidents (high, major or extreme) at La Colosa, Gramalote or other explorations areas. Greenfields exploration drilling was conducted in a manner designed to limit surface disturbance, re-circulate drill water and restore drilling locations to their pre-existing condition.

Stakeholder engagement and communities

AngloGold Ashanti Colombia first "coined" the phrase "social political enablement" in 2013 as a reference point to the necessity of obtaining the critical social acceptance and social licence to operate its business. Social political enablement spans a broad spectrum of activity and in 2014 this activity centred on working closely in those communities that are directly and indirectly affected by AngloGold Ashanti’s exploration work. Primary delivery consisted of projects and programmes of social infrastructure, education, support and institutional strengthening. All of this work was developed in alignment with the communities engaged, with the support of various levels of government, and it has allowed for the creation of ownership and sustainability among communities.

CC&V continues to implement its engagement strategy, which is primarily focused on creating and maintaining open communication with communities and stakeholders regarding mining operations with an emphasis on MLE2.

In Argentina, successful local socio-economic development was undertaken around the Cerro Vanguardia mine where we have engaged closely with the community of San Julián since the start of operations more than 20 years ago. This strategy is based on permanent and continuous dialogue with all local institutions and organisations as well as the local and provincial authorities. A development agency was established in 2004, a collaboration between the mine, the local and provincial authorities, the local university, the rural association and the Chamber of Commerce, which has been financed by the mine since its inception. An important achievement in 2014 was to successfully bring into operation a fish processing plant, a project that has created new jobs and opened up the possibility of a very important viable economic activity that does not depend on mining.

In Brazil, the community strategy is based on projects that promote jobs, generate income, and improve the quality of health and education in the communities that surround our operations. The most significant challenge is to structure socio-economic projects so that the community or government, as appropriate, takes ownership of the public infrastructure and services supplied through community investment. A portfolio of projects is developed to achieve the wide range of community targets, which include amongst others, the Supplier Development Programme; Entrepreneur Award Friend of Sports for the development of and participation in sporting activities; a volunteer programme that was established in 2004 and which has benefited about 24,000 people, 51 social institutions and involved the participation of 1,723 volunteers over the last 10 years.

In the Americas, our engagements with the ASM in the Gramalote concession have included establishing alternative means of livelihoods and creating employment through a co-existence initiative. As in the Continental Africa region, the aim will be to formalise ASM activities and promote the use of improved technology for the artisanal extraction of gold, allowing for higher yields and lower impacts on the environment, as well as the integral development of the value chain.

Value-added statement Resource and Reserve overview