Our risk governance is reflected in our established oversight structures and the management of assigned risk accountabilities.

AngloGold Ashanti is exposed to volatility and various risks in the external operating environment. We recognise that risks and their effective management are intrinsic to this business and, while this remains the case, we will continue to identify and pursue valuecreating opportunities, including the leveraging of existing assets, shareholdings, skills and experience. Risk management is a central component of strategic, operational and project management, and our risk management framework assists us in assessing and managing the risks associated with our business and operational activities. Our framework, which applies across the Company and to all group-managed entities, consists of a formal risk management policy and a set of risk management standards. We adhere to the King IV Corporate Governance Risk Principles, ISO 31000 and to the Committee of Sponsoring Organisations (COSO) Enterprise Risk Management Framework.

Roles of the board, Audit and Risk Committee and management

The board provides oversight of AngloGold Ashanti’s risk management framework, policies and processes and has ultimate accountability for the development and implementation of the risk management strategy and plan.

The Audit and Risk Committee is accountable for risk governance and oversight of the risk management system, approving risk policy, determining the appropriate levels of risk appetite and tolerance and setting of annual limits for these.

Management is responsible and accountable for effective risk management and practice. The CFO is accountable for the enactment of policy and reports to the Audit and Risk Committee and the board on this matter.

Assurance on the risk management system is provided by Group Internal Audit, which provides periodic evaluation of controls and compliance, as well as an objective view of delivery on the risk management process.

Our risks and opportunities are identified at an operational and regional level and assessed with input from senior management. These are reviewed quarterly, or more frequently if required, based on changes in our operating environment. Relevant risk owners are consulted to confirm the status of risks and opportunities in terms of their severity and likelihood, and to ensure alignment with regular independent assessments and assurance processes.

Opportunities

Acquisitions

The acquisition of Corvus, completed on 18 January 2022, provides AngloGold Ashanti with the opportunity for district-wide consolidation in Nevada. The combination of Corvus’ assets, the North Bullfrog, Mother Lode, and other exploration areas, with our own neighbouring targets, including the Silicon and Merlin deposits, provides the opportunity for the Beatty District to become a potential Tier One asset with first gold production expected in the next three years.

The transaction is expected to enable AngloGold Ashanti to establish a medium- to longer-term, low-cost production base in a premier gold mining jurisdiction.

Operational effectiveness and cost reduction

A core priority for the organisation is to reduce costs, such that the business is profitable at lower prevailing gold prices. Key to this objective is to embed the new Operating Model and the organisational model that supports it. The new Operating Model aims to reduce wasteful spending and activity, remove unnecessary duplication of roles at multiple places in the organisation, and empower the revenue generating assets with the resources needed to execute on their business plans. In all, this change to the business is expected to provide improved and more consistent operating outcomes. In parallel with this process, work is also underway to review planned operating and capital expenditures while also conducting a full asset potential review of our operating sites to ensure each is operating at its full potential.

Project development

Development of new projects has the potential to improve the cost and life-of-mine profile of the Company’s portfolio, and improve its long-term optionality. The redevelopment of Obuasi in Ghana is well advanced and the operation is expected to ramp up to a steady state of 4,000tpd of mining by the middle of 2022. The most advanced projects in the pipeline currently are those in southern Nevada’s Beatty district, including our own Silicon deposit and the properties newly acquired in the Corvus acquisition; the Gramalote joint operation with B2Gold in Colombia, currently undergoing optimisation of its feasibility study to improve returns; and the Quebradona copper and gold deposit, also in Colombia, which has appealed a decision by the national environmental regulator to ‘archive’ its environmental permit application, meaning that the regulator will not approve or deny the application.

Climate change

There are substantial opportunities for the gold supply chain – including gold mining – to implement decarbonisation initiatives and move toward a future with net zero GHG emissions, as revealed by the work undertaken by the World Gold Council to understand the gold sector’s GHG emissions profiles and climate change impacts. Climate change risk assessments undertaken in 2020 for all our operating assets and the Quebradona project showed that most physical change-related climate risks have already been identified and included in operational-level risk registers.

We recognise that the effects of climate change may alter the frequency and severity of weather and climate hazards. Using the latest climate data and projections for a range of climate hazards, operational teams were guided through a participatory approach to consider how risks may be affected into the 2030s, focusing on the worst-case scenario (equivalent to a 4.3°C increase in the global average temperature by the end of the century, relative to pre-industrial temperatures), which would require the most robust adaptation measures.

When planning our response to individual physical climate risks, we consider risk management actions that apply to many areas of the business – including those related to information, governance and policy – as well as any operational changes and physical modifications.

We recognise that in some cases our understanding of the risks and required adaptive⁽¹⁾ measures need to be developed further. Informational actions were thus key in enabling us to successfully build on our 2020 climate change risk assessments. These include expanding our monitoring and early warning systems, together with more detailed quantitative modelling and risk assessments. To strengthen climate governance controls, awareness-raising and capacity-building activities are essential in ensuring that our employees have the knowledge and skills necessary for good decision-making and to ensure that our functional policies and standards are fit for purpose.

Operational actions include many simple, cost efficient and flexible options – such as increased frequency of routine maintenance activities – to ensure our assets, infrastructure and equipment are performing optimally. Physical modifications covering both ‘hard’ engineering solutions and ‘softer’ nature-based solutions, tend to be more complex and costly. Nature-based solutions are potentially attractive as they frequently offer multiple benefits beyond management of the initial risk such as environmental improvements and contributions to social value.

1. Adaptation: The process of adjustment to actual or expected climate and its effects. In human systems, adaptation seeks to moderate or avoid harm or exploit beneficial opportunities. In some natural systems, human intervention may facilitate adjustment to expected climate and its effects. Mitigation (of climate change): A human intervention to reduce the sources or enhance the sinks of greenhouse gases (GHGs). IPCC. (2014). Climate Change 2014: Synthesis Report.

Our top 10 residual Group risks

Our risks are assessed over the short, medium and long term. The heat map below shows the residual rating for each of our top 10 risks over a three-year view (medium term). Residual risk is the Company’s exposure to a particular risk once mitigation measures have been applied to the inherent risk.

Strategy

Mining is a long-term business, and so our strategy aims to create sustained value over the life of our mining operations and beyond. This involves careful allocation of key resource inputs – the natural, human, intellectual, financial, manufactured, and social and relationship capitals – which are essential to achieving this aim.

For detail on our strategy and strategic focus areas, see Our strategy – an overview.

Our principal risks

Our risks are assessed over the short, medium and long term. Not all of these factors contributing to our principal risks are within the control of management as they are influenced by external factors outside of management’s control. These external factors include among other things COVID-19 and its lingering impacts on employees, supply chain resilience, resource nationalism, macroeconomic factors, the gold price, and unforeseen events in our areas of operation. These factors carry varying degrees of uncertainty and at times require agile responses to manage the risks. For more on these external factors, see Our external operating environment in this report.