Precious metals miner AngloGold Ashanti has lowered its production guidance for 2023 after suspending gold processing at one of its mines in Brazil.
This comes as tailings-related regulations were introduced in Brazil in 2022, which required the Johannesburg-based miner to do a new detailed risk assessment of its portfolio of tailings storage facilities with oversight from an independent expert.
The assessment found the company has to increase the buttressing of the Calcinados tailings storage dam and align it to standards applied in Canada, which the miner said is “currently considered best practice”.
Brazilian regulators are concerned about mining safety following the Mariana and Brumadinho tailings dam disasters in 2015 and 2019, which killed close to 300 people, similar to the incident at Jagersfontein in the Free State in September last year.
CEO Alberto Calderon said in an interview with Business Day the whole process should take months and not years. “This operation in particular is a very old one and everything is very interconnected. Usually this would not be an issue, you would just buttress it and move on,” he said.
As a result of the temporary closure of its operations in the South America country, the miner now expects to produce 2.45-million to 2.61-million ounces in 2023, down from the 2.74-million it produced in 2022.
“AngloGold Ashanti will proceed with this buttressing programme and has therefore suspended filtered tailings deposition on the facility, which services the Cuiabá mine complex,” it said on Wednesday in its 2022 annual results to end-September.
“The facility’s factors of safety — in both a drained and undrained state — are fully compliant with relevant Brazilian operating regulations,” the company said.
This means the processing of gold concentrate at its Queiroz plant, which also services Cuiabá, will also be suspended until the buttressing programme has been completed, while the mining of ore continues.
The Cuiabá complex accounted for 8.8% of the company’s gold production in 2022.
AngloGold, which has listings on the New York, Australian and Ghanaian stock exchanges, as well as the JSE, sold its last SA mine to Harmony in 2020.
The group’s Obuasi mine in Ghana met its production target of 250,000oz as it continues to ramp up to its full production target of more than 400,000oz by the end of 2024.
The company said phase three of the Obuasi mine is expected to be completed by the end of this year.
African mines delivered the bulk of the company’s gold production in 2022, followed by the Americas and then Australia.
In terms of financials, the miner saw its operating profit decrease 35.9% to $519m (R9.48bn).
Profit more than halved to $316m, despite it reporting higher revenue from product sales as total cash costs per ounce rose 6%, in part because of higher oil and commodity prices, and increasing labour and contractor costs.
Impairments relating to its Brazilian operations also weighed on the bottom line.
The company declared a final dividend of R3.22, bringing the total for the year to R8.15. Cash flow from operating activities jumped 42.3% to $1.8bn.
By the JSE’s close AngloGold’s share price had fallen the most in almost a year, down 7.08% to R308.51.
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