From the chief executive officer

ESG focus

Kelvin Dushnisky Chief Executive Officer

AngloGold Ashanti has embraced and worked to integrate sustainability into its core business from as early as 2012, improving its ability to deal with the increasing complexity of the operating landscape for mining companies.

The year 2019 has been an extraordinary one for listed companies as stakeholders, specifically shareholders, have sharpened their focus on the non-operational issues that are now characterised by the catch-all term Environmental, Social and Governance factors, or ESG. The implications for companies are clear: improve your ESG performance and demonstrate clear strategies for dealing with issues or be penalised by the allocators of global capital, and guarantors of your social licence to operate.

This is a welcome change in emphasis from investors, and is well aligned with AngloGold Ashanti’s operating ethos. We endeavour to make positive impacts wherever we operate, with a particular focus on developing skills in our host communities and spending locally to build capacity in these markets. The drive to hire locals at every level is important in ensuring lasting benefits for our communities, as well as to increasing diversity across our organisation.

An excellent example of this is the redevelopment of our Obuasi Gold Mine, in Ghana. I’m proud to say that Ghanaians comprise 96% of the workforce – three quarters of those from the Obuasi district. The lion’s share of our capital is going to local companies, with around 80 cents of every dollar spent on restarting the mine, spent in Ghana.

You will see in the pages that follow, our efforts across a broad front to mitigate the impacts of our activities on the environment and to leave a positive imprint on society. We have achieved success in some places and fallen short in others. We are working to improve.

There is a growing sense that the private sector must take the lead in improving its social performance to help turn the tide against nationalism and political polarisation, trends that present a threat to global economic growth and security. Safety remains our first priority, but there is also an urgency around ensuring environmental stewardship, addressing income inequality, gender parity, public health and the needs of the communities in which we operate. Perhaps unsurprisingly, climate change tops the agenda for many investors.

We have done important work on Climate Change. We achieved our long-term target – set in 2008 – to reduce our emissions intensity by 30% over 15 years, early. We recognise more work is needed to mitigate our contribution towards the planet’s changing climate. This year we will review our Climate Change approach with updated climate models to ensure the business is prepared for a range of weather scenarios. We will also continue investments that ensure communities are better prepared and will set new emission targets.

The second-order consequences of a hotter and drier Sahel region in North and West Africa, are increasing levels of conflict and population displacement, forcing people to seek alternative livelihoods. Artisanal and small-scale mining (ASM) is often the easiest way to replace lost income and in many cases, it is geology that determines where displaced people settle. We continue to search for a holistic way to deal with this challenge while recognising the social and macroeconomic factors that are driving it. Our preferred approach to dealing with the challenges that informal mining presents, is the formalisation of ASM which may offer an opportunity for people to earn livelihoods, and a way for governments to capture some of the benefit from the development of a scarce resource.

This is easier said than done. There are a number of factors to consider, including the safety of small-scale miners, measures to limit environmental damage and rehabilitate, and a means to sell the gold in a legitimate way, and at a fair price. Each one of these is complex, and we will continue to work with stakeholders to find a lasting solution. We’ve seen some promising examples of formalisation efforts in Colombia, Ghana and Tanzania, which we will continue to support.

It is important to distinguish between ASM and illegal mining, and we will adhere to the strict application of the rule of law in dealing with the latter, which often disrupt and threaten legitimate largescale mining operations.

This year we recorded another record safety year – passing 20 months fatality free at the end of 2019 for the first time. Our safety journey provides valuable lessons on how to integrate a ‘sustainability’ discipline into an operating framework, notably by correctly understanding the challenge, developing a strategy with clear milestones, understood by every member of the organisation, and the placing of accountability for achieving an ambitious set of goals. Safety is fully integrated into our business; every employee and contractor understand safety is their first priority and personal accountability.

Notwithstanding this achievement, we received a heart-breaking reminder of the fragility of these milestones. In March we lost four colleagues in two separate incidents at our Mponeng mine. The first, a large seismic event immediately ahead of the face, caused a massive face ejection and fall of ground, that left three of our colleagues dead. A short time later, in the old TauTona section of the mine, one of our colleagues was killed in a horizontal transport incident. This is a tragic loss that we mourn with the families and loved ones of the deceased, and it enjoins us to drive ever harder toward our goal for zero harm.

In closing, I commit to placing sustainability at the centre of our business. That goes as much for ensuring we have the appropriate capital structure to weather any market outcome, as it does for investing in the resilience of our host communities. Every department in this company – from our legal and finance teams, to the mine planning and geology groups – is learning to view their work through a sustainability lens.