Optimise overhead, costs and capital expenditure

All spending decisions must be thoroughly scrutinised to ensure they are optimally structured and necessary to fulfil our core business objective.

The group’s cost performance in 2021 reflects the continued reinvestment across our portfolio, notably at the Obuasi, Iduapriem, Geita, and Tropicana operations. It also reflects significant investment in tailings compliance in Brazil.

Our overall focus remains on improving our operational performance, underpinned by the introduction of the new Operating Model, continued cost discipline and the commencement of the Full Asset Potential Review programme in 2022.

Key metrics and related targets 2021

(27.5% of DSP performance award)
Measure Target
Target measures Stretch measures Actual
achievement %
Production (shared with Improve portfolio quality) 12.50% 2.7Moz 2.8Moz 2.9Moz 2.472Moz 0.00%
All-in sustaining costs 15.00% $1,230/oz $1,205/oz $1,180/oz $$1,355/oz0.00%
Other metrics monitored are:
  • Total cash costs
  • Sustaining capital expenditure

Performance outcomes

  • Total cash costs increased 22% in 2021, or $173/oz, to $963/oz mainly due to lower grades ($121/oz) and stockpile drawdowns at certain operations ($23/oz). The second half of 2021 reflected an 8% drop in cash costs to $925/oz, on the back of a 12% increase in production from our operating assets (excluding Obuasi), helped by higher underground grades (11%), when compared to the first half of 2021
  • Inflationary pressures ($40/oz) were partially mitigated by weaker local currencies, lower royalties and higher silver by-product contribution. Our proactive supply chain strategies, including holding three to six months inventories of consumables and spares, delayed the inflationary impacts and enabled business continuity during the year. We are closely monitoring the sea freight market, given capacity constraints which are squeezing lead times on deliveries, as well as freight and logistics costs. We have taken a proactive posture on managing our supply chain since the onset of the COVID-19 pandemic, and we will continue to do that to ensure resilience and continuity of supply
  • Open pit grades were 26% lower year-on-year, with most operations affected other than Siguiri and Sunrise Dam. Recovered grades from underground were 3% higher year-on-year, with grade improvements at Geita and Kibali more than offsetting lower grades in Brazil, Sunrise Dam and Cerro Vanguardia
  • The re-investment in our sites continues to progress with the aim of extending mine life and improving flexibility, which remain key priorities
  • Sustaining capital increased by $281m or 57% mainly due to the tailings investment, as well as ongoing stripping at Tropicana and Iduapriem
  • All-in sustaining costs were $1,355/oz, up 31% year-on-year, driven by the higher sustaining capital expenditure and the rise in total cash costs. AISC includes an estimated $34/oz COVID-19 impact, and an estimated $55/oz impact for Brazilian TSF compliance

For further detail on our performance in relation to this strategic pillar, see the CFO’s report and the <AFS>.