In reflecting on what has been a challenging year for the gold market in general, it is worth casting one’s mind back to the achievements of the past 24 months as we've sought to ensure the sustainability of the business.

Over this period, the management team at AngloGold Ashanti has taken decisive action to weather a turbulent market, notably by making deep and sustainable cuts on all expenditure and improving the quality of the portfolio by bringing into production two new, low-cost mines while making the difficult decision to close and sell others. The effectiveness of this endeavour is evidenced by the 22% drop in all-in costs in 2014. All of this has been done while recording our best ever safety performance. These impressive achievements were realised through management’s resolute application of the necessary discipline.

In October 2014 I took part in a dialogue between a number of Christian churches and the mining industry, "The ecumenical reflections on mining", that was held at Lambeth Palace in London. It was a culmination of an initiative by AngloGold Ashanti in 2013, which saw us deliberate, together with other mining houses and the Vatican, to open a frank conversation about responsible mining and shared value; the latter embracing the concept that business competitiveness and social and community wellbeing are inter-dependent. These initiatives coincide with the UN initiative to develop a set of sustainable development goals (SDGs). All these deliberations bring into sharp focus the central question in our world, our societies and our enterprise: Can we positively contribute to the sustainable development of both the eco-system and the people? Our values, at AngloGold Ashanti, unambiguously mandate us to do so.

This conversation took place in the midst of commodity market stagnation at best, deterioration at worst. The year 2014 saw continuing decline in the gold market, with the average gold price received at $1,264/oz, almost 10% below the 2013 price of $1,401/oz and 24% below the 2012 equivalent. The decline in the currencies in most of our operating economies has done no more than maintain local gold prices, and this, in an environment of increasing energy, labour and other costs.

The management team at AngloGold Ashanti has taken decisive action to weather a turbulent market.

The Lambeth discussion, not unjustifiably, focused on the negative legacy of the industry as "a ruthless extractor of value with harmful consequences for communities". It is a legacy that, as a new generation of leaders in the industry, we must acknowledge as part of our determination to fashion a different outcome, one that will result in all stakeholders viewing us as a reliable partner in the realisation of the SDGs. However, we also recognise that our ability to play such a role will always depend on ensuring that mining is a viable enterprise from which shareholders can earn reasonable returns. Achieving this depends on the combined efforts of all stakeholders in a relationship of mutual trust.

Notwithstanding some negative legacies, mining has also been a positive contributor to low and middle income economies. A recent research publication of the International Council on Mining and Metals (ICMM), of which we are a founding member, has developed a Mining Contribution Index, which you will find of great interest. Our operating jurisdictions: the Democratic Republic of the Congo (DRC), Guinea and Tanzania are in the top 25 countries, with Colombia not far behind. The table and graph clearly show how this manifests in some of the countries in which we operate.

Mining Contribution Index by country
      Mining Contribution Index calculation
Country by MCI ranking Population
2000 - 2012 (%)
Index (HDI)
from metals
and coal (%)
in export
2007 – 2012
(% of %)
2012 metals
and coal
(% of GDP)
Index (MCI)
4. DRC400.3481.512.418.095.88
7. Guinea310.3960.19.134.794.79
13. Australia190.9357.38.910.089.86
21. Namibia190.6253.41.811.682.51
24. Tanzania400.4935.34.38.981.81
35. Colombia200.7119.92.83.578.00
36. Brazil140.7417.
59. South Africa190.6638.8(6.5)17.162.43
60. Mali450.4142.3(9.3)20.762.27
62. Ghana350.5717.6(0.7)12.562.08
65. Argentina110.816.82.00.961.59
67. United States110.917.71.50.860.88
82. Russian Federation(2)0.789.6(0.7)4.454.39
Mining Contribution Index score
  • Above 80
  • 60-80
  • 40-60


We have worked closely with the relevant stakeholders to take care of mutual interests to the extent possible. We are appreciative for the cooperation of all concerned.

We are encouraged by our shareholders' support of both our company strategy and our vision of shared value and responsible mining. In striving to generate free cash flow and positive sustainable returns to shareholders, we continue to deliver on the fundamentals of our strategy, the key objectives of which are clearly articulated in both the CEO’s and the CFO’s reports and covered in detail in this report.

Our new operations that started pouring gold in 2013, Kibali in the DRC and Tropicana in Australia, are now a year old and together contributed 595,000oz in 2014, making significant contributions to cash flow. For the first time, the DRC project is making a positive contribution to our business and to that economy. Australia contributed 14% of our gold production, compared with 8% previously. However, the precipitous fall in gold prices over the past two years meant we have had to withdraw from our Mongbwalu project in the DRC. We are grateful to the government of the DRC for its cooperation in this regard. In Namibia, we sold a noncore asset, the Navachab mine, as a result of a review of our portfolio. In Mali, we are also at an advanced stage of disposing off the assets. We have progressed discussions as promised to shareholders, to either joint venture or sell our interest in Cripple Creek & Victor in the US. This, at the same as we continue to consider other asset sale options. In all these processes, we have worked closely with the relevant stakeholders to take care of mutual interests to the extent possible. We are appreciative for the cooperation of all concerned.

We have had to take different decisions to reposition our persistently loss making, yet highgrade orebody, Obuasi mine in Ghana. This entailed the retrenchment of the entire labour force. The mine is currently at limited operation mode, while we conduct a feasibility study that will consider transforming Obuasi into a modern, mechanised operation. As we look at the options available to finance and operate Obuasi into the future, we are also exploring options to reduce risk while maintaining exposure to the upside of this resource by considering a joint venture with another industry or financial partner. We would not have achieved the progress we have made in this initiative without the support, understanding and encouragement of stakeholders; particularly the trade unions, government and the community. We remain confident that this partnership will carry us to the critical stage that will lead to the reopening and improved operation of this excellent asset.

Macro-level contributions of mining in low- and middle-income countries

60-90% of total FDI


Mining FDI often dominates the total flow of FDI in low-income economies that have only limited other attractions for international capital

30-60% of total exports


Mineral exports can rapidly rise to be a major share of total exports in low-income agrarian economies even when starting from a low base

3-20% of government revenues


Mineral taxation has become a very significant source of total tax revenues in many low-income economies with limited tax-raising capacity

3-10% of total national income


Modern-day mineral processing technology is sophisticated and highly capital intensive; locations are centralised as a result and most upstream value addition takes place outside the mine-host country

1-2% of total employment


Mine employment on its own is usually small relative to the total national labour force

Source: ICMM (various years) and Oxford Policy Management (various years).

We are encouraged that the South African Minister of Mineral Resources shares our view that policy uncertainty is undesirable."

All of these measures are designed to ensure that the company works toward operating only top class assets across diverse geographies where we are able to effectively bring to bear our technology, skills and financial capabilities. We have increased gold production while delivering good savings, through focused cost management initiatives, including significant reductions in staff numbers, particularly at corporate, regional and country offices. Although we have simultaneously exited a few exploration sites, we have significantly reduced exploration spend, and we have made good progress in our exploration portfolio. In Colombia, we have been successful in delineating a number of gold and copper-gold ore bodies resulting in a set of opportunities too extensive for AngloGold Ashanti to undertake alone. Consequently, we are exploring opportunities for partnerships or sale for value where we believe our assets stand to make a positive contribution to the country’s mining landscape.

There has been good progress from our Technology & Innovation Consortium, with the goal of extracting otherwise sterilised gold reserves in South Africa from support pillars and enabling mining beyond current depths of about 4,000m. Nonetheless, South Africa’s mining industry is in desperate need of a new strategy that defines its role and place in the country’s agenda for growth. We must not lose out on future commodity booms. The leaders of industry, government and the trade unions owe it to the country to show urgency in developing such a strategy, rather than indulging in a fratricidal inward-looking fight to the finish. Our position in the international mining leadership stakes has already declined. The cost this time may be the industry itself.

The South African gold industry needs rationalisation in order to realise economies of scale, optimise the search for new technologies, and to enable a paradigm shift to a better educated and skilled workforce, capable of higher productivity and wage levels earned in a healthier and safer mining environment. Failure to do this will shorten its already dwindling future and compromise jobs and economic growth. These considerations were at the heart of our restructuring proposal of 2014 which took into account broader developments in the sector.


The leaders of industry, government and the trade unions owe it to the country... [to develop a] new strategy that defines its role and place in the country’s agenda for growth.

Our commitment to confront the negative legacy of the industry’s past has positioned our business well and seen us protect the interests of our stakeholders very well. We have been able to do this because we are not just about compliance, but about lifting our values. Mines that were once prone to high injuries and fatalities now enjoy record breaking safety performance. This is despite the earthquake that struck some of our South African mines in August. In the last five years, the number of fatalities has dropped from 15 in 2010 to six in 2014. Four of the 2014 fatalities were in South Africa’s ultra-deep level mines. We are saddened by those deaths, in respect of which I convey our heartfelt condolences to the families, friends, communities and colleagues of Mncedi Ponti, Mafikizolo Sikhumbuzo Ngwenya, Thembinkosi Dubazane, and Lwazi Bovungana from the South African operations and Luiz Alberto Santos Cerqueira, and Thiago Luiz de Oliveira from Brazil. Although we are encouraged by our progress in this regard, one death on any of our mines is one too many and we cannot rest until all of our operations are completely safe.

We have over the years made great progress in establishing a healthier work environment, from our groundbreaking HIV prevention and treatment work, to significant reductions in the incidence of occupational lung disease, thanks to improved underground dust management, vastly improving living conditions in company-provided accommodation. In fact, together with Anglo American, Gold Fields, Harmony and Sibanye Gold, we announced in November 2014 an industry working group to address issues relating to fair compensation and medical care for occupational lung disease (OLD). The companies have begun to engage all stakeholders on these matters, including government, organised labour, other mining companies and legal representatives of claimants who have filed legal suits against the companies. We are seeking a comprehensive solution which deals both with the legacy compensation issues and future legal frameworks, and which, while being fair to employees, also ensures the future sustainability of companies in the industry.


Guided by the spirit of an industry agreed Mining Charter, AngloGold Ashanti can proudly claim to have played a central part in deracialising patterns of ownership in the South African economy resulting in one of our beneficiaries of this programme becoming the country’s first black billionaire. This at the same time as we ensured a successful Employee Share Ownership Scheme (ESOP), a procurement programme aimed at mainstreaming black and women suppliers as well as a range of enterprise development initiatives. The renovated employee accommodation is a far cry from the old hostels that were an assault on the human dignity of our workers. We remain committed to improve the living conditions of our employees including a search for a solution to the negative consequences of the migrant labour system, initiatives to address employee indebtedness, where irresponsible lenders and debt administrators severely curtail their spending power.

This inclusive approach is delivered in varied ways in different jurisdictions often guided by prevailing policy frameworks. Our leadership appointments and talent management for instance, whilst single mindedly driven by the principle of merit and best person for the job, we have been able to address expectations for localisation and employment equity with great success. This is even though we recognise the need for an improvement in the number of African women in the executive leadership.

In the review of the Mining Charter, while we are encouraged by the progress made in the professional assessment towards the commonly agreed industry transformation agenda, we trust that the outcome of this will be used objectively and fairly to ensure that those that have thus far failed to comply are brought along. For reasons already discussed, we would strongly advise against a shifting of the goal posts on empowerment. We are encouraged that the South African Minister of Mineral Resources shares our view that policy uncertainty is undesirable. In a similar vein, we trust that the previous agreements reached between government and the Chamber of Mines in respect of the Mineral and Petroleum Resources Development Amendment Bill, which the President recently returned to South Africa’s National Assembly, will be maintained.


Regulatory certainty is required in other jurisdictions as well to enable us to pursue our vision of shared value in mining. This is particularly so with regard to artisanal and small-scale mining (ASM). As AngloGold Ashanti we regard ASM as a legitimate entrepreneurial activity. After all, in many cases these are miners we found engaged in tenements we were allocated, and long after we will have left they will remain active. The absence of a permissive regulatory regime in some jurisdictions may inadvertently criminalise a legitimate economic activity. In communities where we operate, the company supports a formalisation of the ASM sector wherever possible. This affords us an opportunity to empower these entrepreneurs to embrace healthy and safe practices, protective of the environment and also adhere to decent work standards that we encourage.

Our company needs to modernise its operating methods, in order to survive and in order to ensure a fair shareholder return.

In the Americas, our engagements with the ASM, for instance in the Gramalote concession, included establishing alternative livelihoods, including employment with the company, driven through a co-existence initiative, to promote the formalisation of the ASM activities and 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.

At Geita, through a multi-stakeholder partnership initiative, together with the government of Tanzania and the World Bank, we have established a management advisory group that will pilot an operation in Lwamgasa village, whose aim is the formalisation of the ASM sector as a long-term sustainable solution. The pilot project was launched in September 2014 and it is anticipated that the geological evaluation will be completed in 2015, after which the construction of the small-scale mine will commence. This will be accompanied by training of the miners in safer methods of mining, mercury-free gold processing and other approaches that are more efficient, safer and environmentally friendly.


We pride ourselves on the positive relations we have usually enjoyed with our employees and their representative unions in the various jurisdictions. As a result of this relationship, great strides have been made in an industry that had a reputation of repression and unbridled exploitation. Today the entry level wages of our South African workers compare favourably to those of other industrial sectors. However, the differential between the lowest and the highest paid employee is disturbingly high. This is an untenable structural problem that requires carefully considered and sustainable resolution. We support the government initiated engagement process on labour relations that is led by Deputy President Cyril Ramaphosa and involves business, labour, government and community. Its purpose is to find solutions to this challenge as well as that of adversarial labour relations that are sometimes characterised by violence and unusually long strikes. AngloGold Ashanti has made a significant contribution to the discourse by allowing me to convene during June a colloquium of the country’s leading labour relations thinkers whose conclusions have helped shape the engagements.

The biennial gold industry wage negotiations that get underway later in the first half of 2015 will take place against this background, which will be compounded by inter-union rivalry. Widely canvassed measures to stem violence that often accompanies some of the strike action will not have been agreed by the time of the forthcoming bargaining season. We trust, nonetheless, that the bargaining will be approached in a constructive and peaceful way by all sides.

Much hard work has been done in the gold sector to ensure that the institutionalised system of centralised collective bargaining, which has served the industry well for more than three decades, will continue to do so. Collective bargaining is an essential feature of any market economy, and it invariably includes elements of conflict. However, employers and employees need always to bear in mind that they have a common interest in minimising, or even avoiding, the losses through resorting to strike action that always accrue to all, including those who are not directly part of the employment relationship, as the platinum strike demonstrated so starkly.


...great strides have been made in an industry that had a reputation of repression and unbridled exploitation

Every one of the issues dealt with in this letter – a fair return to shareholders, employee and labour relations, health and safety, technological advancement, ASM, transformation, mining and society – bring home the complex and interrelated set of responsibilities that the board and management of a modern, and modernising, mining company faces. Our industry offers the potential to help lift the poorest societies out of poverty. It has done so in many parts of the world in recent decades. But companies have a responsibility to ensure they do so in a responsible way, even – perhaps especially – in locations where government regulation or its implementation is inadequate to ensure company contribution to shared value and respect for human rights.

Our company needs to modernise its operating methods, in order to survive and in order to ensure a fair shareholder return. But it needs to do so with awareness of, and appropriate responsibility for, the interests and rights of those affected by our activities – employees, host communities and governments. We need always to engage frankly with those stakeholders with a view to a fair sharing of the value generated by our activities. We need always to be aware of and honest about the trade-offs that tough decisions will require. The trade-offs, for example, between pressure for better wages, jobs and technological advancement in labour intensive environments as at our South African mines is a matter that should be at the forefront of the minds of the leaders of business and labour. AngloGold Ashanti has always sought to be at the cutting edge of the thinking about these issues. We seek to continue to play this role.

I welcome to the board Christine Ramon, who was appointed CFO with effect from October 2014. She is a seasoned CFO with an impressive depth of experience and will add an important dimension to our board and to the executive. I thank Richard Duffy, the company’s previous CFO, who had a long and distinguished career with the company. We are deeply grateful to Richard for the outstanding work he did over the 13 months of his reign. I wish him well and all the best in his future endeavours. I also welcome to the board Albert Garner, Maria Richter and Dave Hodgson. Dave was chief operating officer at our company until his retirement in 2005.

Finally, I want to acknowledge the extraordinary job that our CEO, Srinivasan Venkatakrishnan – Venkat – and his team continue to do in these most challenging times. I take this opportunity to also express my gratitude to my fellow board members, who have supported me throughout the year, and with whom we continue efforts to improve the company’s value proposition for our shareholders and all stakeholders.

Sipho M Pityana
19 March 2015

Introduction CEO's review