Integrated report <IR> 2020

Our business model

Our ability to create value depends on the use of and access to various capital inputs – this includes access to financial capital and economically viable orebodies, as well as to the necessary mining infrastructure, including utilities, plant and equipment, and a skilled and experienced workforce. Creating value entails optimising and balancing the use of these inputs, enhancing positive outcomes and impacts, minimising those that are negative, and delivering on our strategy.

Operating context

Those risks and issues arising in our external operating environment that have the potential to affect our ability either positively or negatively to create and preserve value, include:

  • Global health concerns – the COVID-19 pandemic and other diseases such as malaria and Ebola
  • Volatile global economic and commodity markets resulting in an unpredictable gold price and currency movements
  • Relative cost competitiveness, particularly in the resources sector
  • Political uncertainty and country risk – instability, regulatory and policy challenges
  • Community expectations and the need to work with stakeholders to build self-sustaining communities
  • Climate change and decarbonisation efforts
  • Management of water, a scarce resource
  • Increasingly comprehensive reporting and disclosure requirements

See Managing our risks and opportunities, external operating context and materiality and material issues


Our all-encompassing governance framework, systems and processes, together with our values, inform how we conduct our business and guide all that we do – our operations, decision-making, behaviour and stakeholder engagement. Our governance structures acknowledge our social and environmental responsibilities.

Our corporate governance aims at achieving:

  • Responsible, ethical leadership and conduct, in line with our values and code of ethics
  • Effective oversight and control of our business and the effective delegation of responsibility
  • Inclusive stakeholder engagement to promote trust and legitimacy and to aid understanding of our impacts on stakeholders

See Corporate governance


Essential capital inputs

Why important
Required inputs
Related challenges/constraints
Related strategic pillars/ capitals affected
Natural capital

Our primary business activity is the exploration for, development and operation of gold orebodies to transform these into economic and social value.

To do this, we need:

  • Pipeline of economically viable Mineral Resource and Ore Reserve
  • Access to various natural resources – land, water and energy, among others
  • At the start of 2020, an inclusive Mineral Resource of 175.6Moz and Ore Reserve of 43.9Moz
  • Pipeline of economically viable orebodies in our existing mines, greenfield projects and exploration sites
  • Land – 460,757ha under management of which 25,738ha was disturbed and 5,063ha had been rehabilitated at the start of 2020
  • Other natural resource inputs:
    • Energy: 25.57PJ consumed
    • Water: 47.40GL withdrawn
    • Diesel: 216.36ML consumed
    • Cyanide: 25.73t
  • Availability of increasingly scarce, economically viable orebodies must be managed to maximise returns and the value generated over their finite lives
  • Mining and its related processing activities have certain inevitable environmental impacts. Challenges include:
    • Land rehabilitation and restoration, the protection and preservation of biodiversity
    • Conserving water, a scarce resource in many areas in which we operate and one which is shared with other users/stakeholders. Water re-use is a priority
    • Efficient energy use, reducing the use of non-renewable energy and increasing that of renewable energy to limit emissions and our impact on the climate
    • Responsible deposition and management of mining waste streams, especially tailings
Strategic pillars
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Other capitals affected
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Financial capital

Access to cost-efficient capital is vital to fund our business, sustain operations, ensure future growth, and to pay for the use of other capital inputs necessary to our business. Our main sources of funding are operational cash flow, debt and credit facilities, and equity.

At the start of 2020, our financial capital included:

  • Totally equity of $2.7bn
  • Cash and cash equivalents from continuing operations of $0.456m
  • Adjusted net debt from continuing operations of $1,581m
  • Undrawn borrowing facilities of $1,752m
  • Investments in associates and joint ventures of $1,581m, a source of dividends
  • Other investments of $86m, a source of dividends
  • Market capitalisation of $9.28bn
  • Ensure sufficient financial capital is available to conduct our business, to balance competing demands for financial capital and optimise its allocation
  • Generating cash flow to fund the business as well as future growth depends on various factors, both external and internal
  • We operate in a constrained global financial environment where the cost of financial capital is dictated by company fundamentals, investor sentiment, political and country risk, and the overall health of the global economy
  • Our cost efficiency impacts cash flow
  • Judicious balance sheet management is necessary to ensure the required level of liquidity to sustain the business, finance growth, reduce debt and pay dividends
  • Sovereign ratings downgrades could increase the cost of capital
Strategic pillars
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Other capitals affected
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Human capital

The conduct of our business and delivery on our strategy depend on the skills and knowledge, productivity, behaviour and well-being of employees. Effective talent management enables AngloGold Ashanti to better navigate a volatile macro-economic environment and to achieve our strategic objectives

  • Representative, skilled, engaged and motivated workforce
    • Employees with the necessary mining and related technical skills and expertise – employed 36,952 people, including 16,222 contractors
    • $10.8m invested in training and development
  • Cordial and constructive engagement with all employees
  • Strong, experienced and diverse leadership
  • Motivational reward structures linked to strategic performance and delivery
  • Talent attraction, retention and succession planning ensures we have the skills and expertise necessary to operate our business efficiently and deliver on our strategy. COVID-19-related challenges highlight the importance of talent retention
  • Workforce localisation and the reduction of expatriate employees are focus areas
  • Inclusivity, equity and diversity is a focus for ESG investors and broader society
  • Internal appointments followed changes to the board and executive management
  • Mining can be hazardous, and a safe, healthy workforce is essential to the execution of our strategy. COVID-19 was the single most significant challenge to employee well-being
Strategic pillars
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Other capitals affected
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Manufactured capital

Efficient conduct of our business relies on the development and maintenance of our mining operations and related infrastructure and equipment.

  • Ten mining operations with well-maintained infrastructure, gold processing plants and equipment. The book value of our property, plant and equipment is $2.9bn as of 31 December 2020 (31 December 2019: $2.6bn excluding the South African portfolio)
  • Exploration and mining rights, permits and licences
  • Three projects (Obuasi, Gramalote, Quebradona) are being developed and brownfields projects underway at Geita, Siguiri, Kibali, Cerro Vanguardia, AGA Mineração, Sunrise Dam, and Tropicana
  • Consumed:
    • Cyanide – 23.7t
    • Explosives – 50.2t
    • Liquid fossil fuels – 270,063kL
    • Lubricants – 6,047kL
    • Total acids – 10,412t
    • Total alkalis – 141,439t
  • Continued access to reliable manufactured capital entails focused investment in its development, maintenance, upgrade and replacement
  • Well-maintained, functional infrastructure, plant and equipment, together with the necessary technical support, are essential to cost-efficient, steady operations. Maintenance of manufactured capital is included in stay-in-business capital expenditure
  • Balancing competing demands for financial capital, while allowing for unexpected equipment failure and potential supplier delays
Strategic pillars
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Other capitals affected
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Social capital

Relationships with many of our stakeholders support our license to operate, and must be based on trust and transparency. These relationships also help protect our reputation, and enable us to deliver on our strategy.

Stakeholders include communities, governments, NGOs, and investors, among others.

  • Our Values and Code of Ethics guide our stakeholder engagement
  • Commitment to maintaining our integrity and reputation among stakeholders, including investors, communities, civil society, NGOs, suppliers, governments and regulators
  • Dedicated community engagement structures facilitate engagement and promote supportive communities
  • A reliable, cost-focused, efficient and representative supplier database, adhering to our Supplier Code of Conduct. Local suppliers are given preference
  • Constructive relationship with government and regulators
  • Accurate, transparent and consistent disclosure
  • Responsible ESG practices, consistent financial and operational performance and delivery on our strategy earns investor confidence
  • Stakeholder trust is vital in securing our social licence to operate; low levels of trust could potentially impede the business
  • The importance of strong stakeholder relationships has been highlighted because of declining levels of trust in global organisations
  • To maintain trust, relationships are carefully nurtured
Strategic pillars
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Other capitals affected
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Intellectual capital

An ethical, performance-based culture, solid governance framework and efficient management systems, including enterprise risk management, are vital in facilitating delivery on our business strategy. Underpinning these is innovation and technology to enhance and optimise efficiencies and outcomes.

  • Integrated, focused strategy supported by sound management systems, corporate governance framework and an effective risk management framework
  • Our Values and Code of Ethics guide our behaviour and all decision making
  • Talent management programme to maintain bench strength
  • Competitive remuneration and clear performance management systems aim to ensure the best skills are attracted and retained
  • Technology to enable the constant monitoring of all information technology (IT) assets in real time and any possible threats
  • Attracting and retaining the talent required to enhance our intellectual capital is key to obtaining the skills required to drive innovation and technological development
  • The costs of digitalisation, technological innovation and R&D must compete for capital allocation
  • Increased cybersecurity threats
  • Maintaining cybersecurity across all operations is essential
Strategic pillars
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Other capitals affected
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Outputs and related capitals

Key outputs of business activities
Related capitals
  • 42.1Mt of ore treated/milled (attributable) (1)
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  • Produced 3.0Moz of gold – and 3.6Moz of silver and 188t of sulphuric acid as by-products
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  • Produced 140.84Mt of overburden and waste rock
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  • Deposited 70.52Mt of tailings
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  • Generated revenue of $5.5bn from the sale of gold and by-products (2)
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  • Contributed 1,123kt of GHG emissions, through the consumption of 5.989PJ of grid-based electricity
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  1. (1) Excludes surface and dump ore treated/milled
  2. (2)Includes equity-accounted joint ventures

Outcomes of our business activities

Action to enhance and optimise value and prevent its erosion
Outcomes achieved
Stakeholders affected
Natural capital
  • We work to mitigate direct environmental impacts of our activities and to offset these where possible.
  • The South Africa and Mali asset sales streamlined our portfolio to help ensure value creation in the longer term.
  • Initiated a focused Ore Reserve programme
  • $162m invested in brownfields and greenfields exploration to develop the Ore Reserve pipeline.
  • Feasibility studies on our two Colombia projects were advanced, bringing closer the introduction of new production sources that will be mostly hydropowered
  • About $24m invested in the project to convert our Brazil TSFs to dry stacking, and another $72m planned for this work in 2021
  • Initial, bottom-up work done in preparation for the update of our climate change strategy and the setting of emission targets, including physical risk assessments at each site

More detailed information on our activities see: CEO’s review, ESG performance and Mineral Resource and Ore Reserve – summary in this report; and relevant sections in the <SR>

  • At 31 December 2020, our mining activity, project development and sale of assets resulted in:
    • Mineral Resource (inclusive) of 124.5Moz
    • Ore Reserve of 29.7Moz
  • Gross Ore Reserve increased by 6.1Moz – extending average operating life by around 11 years
  • Eight reportable environmental incidents (2019: 3)
  • No community environment-related grievances


  • 25,881ha of land disturbed by our activities – 5.6% of land under management
  • 5,243ha land rehabilitated – 1.1% of land under management


  • Water re-use efficiency of 73% for 2020 compared to 76% in 2019

Energy and GHG emissions

  • Energy consumption improved while efficiency declined
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Financial capital
  • Streamlined the portfolio through the sale of assets in South Africa and Mali, generating cash proceeds of $239m including dividends and loan payments
  • Most of these funds were used to reduce debt
  • Free cash flow generation was the highest since 2011
  • A doubling in the dividend payout ratio contributed to a more than fivefold increase in the annual dividend payment

See CFO’s report

  • Free cash flow rose by 485% to $743m, from $127m in 2019
  • Adjusted net debt from continuing operations declined by 62% to $597m
  • Adjusted EBITDA rose 50% year-on-year to $2.6bn
  • Adjusted net debt to adjusted EBITDA ratio from continuing operations fell to 0.24 times
  • Cash and cash equivalents were up 192% to $1.33bn
  • No employees lost wages or benefits during lockdowns and COVID-19 related disruptions

Improved shareholder returns:

  • Paid a dividend of approximately 48 US cents a share – a fivefold increase from 9 US cents a share in 2019
  • Share price increased marginally over the year for a market capitalisation of $9.4bn at year end 2020
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Human capital

We invest in technology systems and procedures to ensure workplaces are safe, employees are healthy, motivated, and equipped to do their jobs. We provide training and development, ensure fair labour practice, promote local employment and diversity and inclusivity.

  • Our safety strategy aims to minimise harm and injury in the workplace.
  • Our COVID-19 response saw all employees receive salaries and wages during periods of enforced lockdown and the suspension of operations.
  • Our internal talent pipeline is strengthened through our established talent review and succession plan.
  • Diversity, inclusion and localisation, especially in the Africa region, are important focus areas

See ESG performance – an overview and People are our business in this report as well as relevant sections in the <SR>

  • Regrettably, six colleagues lost their lives in 2020 in workplace accidents
  • All injury frequency rate improved 28% to 2.39 injuries per million hours
  • All occupational disease frequency rate improved 47% to 0.72 cases per million hours worked
  • Improved employee skills, enhancing their employability – $10.8m invested in training and development
  • Diversity – 33% of the executive committee and 44% of the board are women
  • Increased employee engagement and improved employee relations because of frequent COVID-19-related communication
  • Paid $508m in salaries, wages and other benefits
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Manufactured capital
  • Our actions here aim to ensure our mines operate efficiently and their operating lives are optimised.
  • Two projects in Colombia are progressing – their feasibility studies are underway and the results are expected by end June 2021
  • The first phase of the Obuasi Redevelopment Project was completed. The overall project was 90% complete by end 2020

See Strategic capital trade-offs, CEOs review and Regional review

  • Number of operations reduced from 14 to 10, after sale of the South Africa and Mail assets

Obuasi – creating value over the longer term

  • Advancement of the Obuasi Redevelopment Project, once fully ramped up, is expected to contribute 350,000-400,000oz of gold annually to production for first 10 years of full production
  • Annual production will be equivalent to more than 10% of group production
  • Employs 4,210 people (of whom more than 90% are local nationals) – focus on in-country recruitment and local procurement

Colombia projects – allowing for long-term optionality

  • Pending board approval, the Colombia projects are expected to contribute an estimated 600,000oz of annual gold-equivalent production in their first five years, once both are fully ramped up
  • Significant resources and reserves, and the equipment and infrastructure needed to develop them
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Social and relationship capital
  • Our activities here are aimed at ensuring constructive stakeholder relations, which are vital to maintaining our regulatory and social licences to operate
  • As a responsible corporate citizen, we aim to share the socio-economic benefits of our mining activities and support resilient, self-sustaining communities
  • Regular and constructive engagement with local, regional and national governments
  • Our socio-economic activities are aligned with local development targets
  • Focus on human rights and human rights awareness training
  • Concerted effort to ensure and maintain positive community relations

For the detail on these activities, see ESG performance – an overview and relevant sections in the <SR>


  • Overall positive relationship with communities boosted by active engagement and the provision of local employment and procurement opportunities, infrastructure and services
  • Community resettlements and community demands for services, jobs, and reduced environmental impact
  • Accolades received for community work in Colombia, Tanzania and Ghana
  • No reported human rights violations for a third consecutive year
  • Total local procurement spend of $2.1bn including capital purchases
  • Total community investment of $20.6m

Governments and regulators

  • Good regulatory compliance – no fines received for material non-compliances
  • $1,055m paid in total to governments


  • Strong financial performance and transparent engagement and disclosure, supports investor and shareholder confidence
  • Dividends totalling $38m paid to shareholders
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Intellectual capital

A detailed digital transformation roadmap has been developed that has defined usability for various areas with the potential to improve operating and safety performance, and ensure reliable delivery and compliance with strategic and business plans

For further detail, see Planning for the future – projects, exploration and innovation


  • Digital disruption
  • Technological challenges of remote work for many employees, accelerated by the COVID-19 pandemic and resultant move to remote working
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Value created, preserved and eroded by delivering on our strategy

Value for stakeholder
Value for AngloGold Ashanti
Long-term value
Shareholders and investors (including providers of capital)
  • Dividend payments
  • Share price appreciation
  • Repayment of debt and interest
  • Improved cash flows from a steady performance and increased gold price
  • Debt reduced from cash flows and asset sale proceeds
  • Increased earnings and cash flow provide greater optionality in capital allocation and investment
  • Improved liquidity and greater access to capital
  • Reduced debt levels

Sustained positive cash flows over the long term will provide shareholders with positive returns

  • Fair pay in return for work
  • Wages and salaries earned support employees’ livelihoods
  • Skills development and learning, personal career growth
  • Employee benefits, including healthcare
  • Stable workforce
  • Improved productivity
  • Ability to attract and retain talent
  • Motivated, engaged employees
  • Beneficial, co-operative labour relations

Sustained employment over the longer term means the steady receipt of salaries and wages, with the subsequent sustained contributions to local expenditure and local economic activity, boosting local economies and creating more resilient communities

  • Reliable offtake of goods and services
  • Local procurement supports local business and workforce, and creates resilient economies and societies
  • A well-established database of reliable, cost-efficient suppliers supports delivery on our strategic objectives, particularly optimising overhead costs and operating expenditure
  • Strong relationships with suppliers helped ensure business continuity during disruptions to global supply chains (eg. COVID-19)

As a long-term customer for suppliers, we contribute positively to local communities, encouraging economic growth over time. In exchange, suppliers will help ensure the supply chains remain resilient during widespread disruptions

  • Employment and procurement opportunities – community members employed by the mines in turn contribute to local economies
  • Investment in socio-economic development projects such as agriculture, education and infrastructure
  • Improved standards of living
  • Constructive community relationships support our social licence to operate
  • Reduced incidence of operational disruptions caused by community protests

Our social aims include contributing to, and promoting resilient, self-sustaining communities. Our community investment focuses on developing socio-economic initiatives that are economically viable and sustainable in the long term

  • Payment of taxes, royalties and other duties support the national fiscus in host countries
  • Payment of employee personal income tax
  • Partners in our operations benefit from earnings generated
  • Collaborative partnerships to develop local infrastructure
  • Constructive, steady relations with governments and regulators help maintain mining licences
  • Regulatory compliance ensures licence to operate

Continued payment of taxes, royalties and duties, by both the company and employees, contributes to the national fiscus of each country in which we operate, ensuring shared value with our host governments and communities

  • Mining is an environmentally disruptive activity. We aim to minimise our impacts and help restore this natural capital
  • Environmental management mitigates the damage caused through land disturbance, protecting biodiversity and the responsible consumption of natural resources and waste management
  • Improved environmental performance aids inclusion in ESG performance indices, boosting responsible investment in our equity, supporting our valuation in the long term
  • Reduced environmental impact and carbon footprint in line with the SDGs
  • Land rehabilitation to repair damage or restore land
  • Improved efficiencies (of water and energy especially) and responsible resource consumption contribute to lower operating costs

Our environmental rehabilitation and biodiversity programmes aim, over time, to restore land for sustained, alternative economic use. This is linked to creating value for communities and is aligned with our values to respect the environment and to leave communities better off for AngloGold Ashanti having been there