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Annual report suite 2012

Australasia

Australia [map]
Graham Ehm [photo]

Graham Ehm
Executive Vice President
Australasia Region

Gold production (000oz) Average number of employees
OPERATIONS
1 Australia
Sunrise Dam 258 494

Regional profile

AngloGold Ashanti’s Australian assets comprise the wholly owned Sunrise Dam and the 70% owned Tropicana Gold Project (see Project section of this report) which was under construction during 2012.

  • Sunrise Dam is located in the northern goldfields of Western Australia, 220km northeast of Kalgoorlie and 55km south of Laverton. The mine will transition from a combined open pit and underground operation to solely underground mining during 2013. Mining is conducted by contractors and the ore is treated in a conventional gravity and carbon-in-leach (CIL) processing plant, which is owner-managed.

Key performance indicators

AIFR  Australasia [graph]
Production  Australasia [graph] Total cash costs  Australasia [graph]
Productivity  Australasia [graph] Number of reportable environmental incidents Australasia [graph]
Australasia – key statistics
Units 2012 2011 2010
Operation
Tonnes treated/milled Mt 3.4 3.6 3.6
Pay limit oz/t 0.08 0.10 0.14
g/t 2.42 3.00 4.32
Recovered grade oz/t 0.070 0.063 0.099
g/t 2.39 2.16 3.40
Gold production 000oz 258 246 396
Total cash costs $/oz 1,211 1,431 982
Total production costs $/oz 1,347 1,622 1,065
Capital expenditure $m 355 102 40
Productivity oz/TEC 43.46 38.93 66.77
Safety
Number of fatalities
AIFR per million hours worked 6.33 18.11 13.10
People
Average no of employees: Total 494 509 494
Permanent employees 110 101 93
Contractors 384 408 401
Environment
Total water consumption ML 3,104 4,059 3,485
Total water usage intensity kL/oz 12.05 16.48 8.8
Total energy usage million GJ 1.35 1.21 1.28
Total energy intensity GJ/oz 5.24 4.90 3.23
Total greenhouse gas (GHG) emissions 000tCO2e 87 93 153
Total GHG emissions/oz tCO2e/oz 0.34 0.38 0.39
Cyanide * used t 1,331 1,379 1,444
No. of reportable environmental incidents 1 1
Rehabilitation liabilities: Total $m 61.5 42.0 38.2
Restoration $m 26.8 27.8 28.2
Decommissioning $m 34.7 14.2 10.0
Community
Community expenditure $000 464 276 456
Payments to government $m 88 122 28
Dividends $m
Taxation $m 47 81 (2)
Withholding tax (royalties, etc) $m 11 10 12
Other indirect taxes and duties $m
Employee taxes and other contributions $m 30 31 18
Property tax $m
Other $m
  1. * International Cyanide Code compliance: Sunrise Dam was certified in 2007 and recertified in 2010.

Performance

Safety and health
Safety performance continued to be an area of focus with no fatalities reported. The AIFR improved to 6.33 per million hours worked (2011:18.11).
Production
Production from Australasia rose by 5% to 258,000oz in 2012 as operations at Sunrise Dam recovered from floodrelated disruption (excessive rainfall, pit flooding and pit-wall failure) the previous year. Total cash costs decreased by 15% to $1,211/oz (2011: $1,431/oz) as volumes rose. This represents a decrease of 16% in local currency to A$1,171/oz (2011:A$1,386/oz). An insurance payout of A$30 million related to the 2011 pit wall failure was offset against cash costs in 2012. Cash costs during the year were also positively impacted by improved grades from the North Wall Cutback area of the pit. The region contributed 6% to group production in 2012.
Capital expenditure
Total capital expenditure at Sunrise Dam was $35m. This was spent on ore reserve development and improvements to underground dewatering capacity. This amount excludes expenditure at Tropicana of $315m.
People
A total of 494 people (2011: 509 people), 110 (22%) permanent employees and 384 contractors (78%) were employed at Sunrise Dam in 2012. Productivity continued to be high, reporting 43.46oz/TEC in 2012 (2011: 38.93oz/TEC), the highest level in the group.

Skills shortages remain an area of concern in the region and are a driver of high employee turnover and costs. Efforts have been made to extend employment to local indigenous people and the community engagement team works closely with the human resources department to generate training and employment opportunities, address employee retention, mentor and support, and to provide supervision and leadership. The frontline supervisor programme now incorporates a module on skills sets for the supervision of indigenous employees. A further outreach education programme has been developed to help indigenous peoples’ families adjust to their lifestyles changes.
Communities
A community engagement team was established during the year to build capacity among local suppliers and generate more local employment initiatives. A review of the supply chain process and local small and medium enterprises (SME) programmes is progressing. These enterprises will be provided with a toolkit to help them engage with the company. Contract implementation is a particular area of focus for local entrepreneurs.
Environment
Energy is becoming a challenging global factor and Sunrise Dam is participating in a regional plan to integrate renewable energy sources such as gas, wind, solar thermal, biomass and solar panels, so reducing its reliance on non-renewable energy and lessening AngloGold Ashanti’s carbon footprint. Australia has taken a firm stance on environmental legislation and has imposed stricter emission limits and carbon pricing mechanisms. The Clean Energy Future Scheme, which came into effect from July 2012, introduced a carbon pricing scheme to regulate carbon emissions. AngloGold Ashanti will be required to pay A$23/t of CO2 generated. This is due to increase by A$2.5/t annually until 2015, from when it will be controlled by a market trading scheme. AngloGold Ashanti is actively engaging with the Australian government on the balancing of profitable business practices with responsible environmental strategies to overcome these adverse factors.
Mineral Resource
and Ore Reserve
At the end of 2012, the total attributable Mineral Resource (inclusive of the Ore Reserve) for the Australasia Region was 8.34Moz (2011: 7.45Moz) and the attributable Ore Reserve, 3.91Moz (2011: 4.26Moz). This makes up around 3% and 5% of the group’s Mineral Resource and Ore Reserve respectively. The Mineral Resource for Tropicana grew by 1Moz at year end to 5.52Moz.
Growth
Attributable production for the region will increase to an annualised rate of more than 600,000 oz by the end of 2013 as Tropicana comes on stream. Mining of the Crown Pillar from the base of the Sunrise Dam pit will contribute highgrade ore to mill feed as the operation focuses on lifting underground ore production rates over 2Mtpa. Brownfields drilling at Sunrise Dam is targeting extensions to the Vogue discovery located below the currently mined Cosmo and adjacent Dolly underground domains. Vogue remains open along strike and at depth and offers an opportunity for either extensive bulk or selective mining close to existing underground mine infrastructure. At Tropicana a prefeasibility study to examine the potential open pit and underground development options at Havana Deeps is expected to be completed in the second half of 2013. At this time the Ore Reserve for the mine will be updated.
Outlook*
In 2013, attributable production is expected to be between 0.417Moz and 0.447Moz at a total cash cost of between $949/oz and $984/oz. Capital expenditure of around $320m is planned.

  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”.