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Annual report suite 2012

Our products and markets

Our activities begin even before exploration, and continue well beyond closure of operations, and we address our impacts and responsibility throughout those periods of the product life cycle over which we have control.

Sustainable development [flowchart]

Our products

Gold has been a much sought-after source of wealth over the centuries. It has extensive uses such as an investment, a safe-haven asset, a hedge against inflation, a store of value, as jewellery, in the electronics industry and in medical technology.

Once mined, the ore is processed into doré (unrefined gold bars) at AngloGold Ashanti’s operations. The doré is dispatched to various precious metals refineries. In Brazil we own and operate the Queiroz refinery, which is a member of the LBMA. We also have an interest in Rand Refinery Limited in South Africa, which is also a member of the LBMA. Gold is refined to a purity of at least 99.5%, in accordance with the standards of ‘good delivery’ as determined by the LBMA. This is important as it ensures that we comply with the highest standards as a responsible mining company.

Our gold is sold directly to bullion banks via the refineries. Bullion banks are commercial entities that deal in gold, distributing bullion bought from mining companies and refineries to markets worldwide. These banks hold consignment stocks in all major physical markets and finance their inventories from the margins they charge physical buyers.

Valuable by-products including silver, sulphuric acid and uranium are produced in the process of recovering the gold mined. These by-products are a function of the characteristics of local geology. Uranium is produced by certain South African operations, sulphuric acid is produced by our Brazilian operations and silver is produced in varying quantities at all operations.

As sulphuric acid and uranium are potentially hazardous, we ensure their safe production and transportation to customers.

OS For further information on our product stewardship programmes and initiatives, see Adding value.

Our markets

Geographic location of gold shares [graph]

The jewellery sector accounted for 43% of gold demand in 2012, while the investment sector – bar and coin hoarding, medals and other retail investment instruments, as well as exchange traded funds (ETFs) – accounted for 35% of total demand. The balance of gold demand is from the electronics and dentistry industries (10%) as well as uptake from central banks (12%).

We promote our product in target markets, by supporting initiatives aimed at improving gold jewellery design. This is mainly through the AuDITIONS programme of jewellery design competitions. Jewellery consumption in countries such as India and China still provides an important source of physical gold demand.