Gold Fields and AngloGold Ashanti have agreed to pause discussions over what would have been Africa’s largest gold mine after reaching a stalemate with Ghanaian authorities.
A statement on Tuesday suggested that Ghana’s government failed to endorse the group’s proposed joint venture to combine their Iduapriem and Tarkwa gold mines in the country.
The companies proposed the combination of the neighbouring mines in March 2023 and have spent much of the intervening time in a constructive dialogue with the Ghanaian government to obtain the necessary approvals, said Gold Fields CEO Mike Fraser.
“While the shared value created by a combination of the two mines remains compelling, Gold Fields and AngloGold have agreed to pause discussions related to the joint venture to allow focus on our respective operations on a stand-alone basis,” said Fraser.
This would also allow AngloGold to consolidate the improvements to its long-term mining plan, which currently shows the highest value of its options, according to the statement.
Iduapriem is located in the western region of Ghana, about 70km north of the coastal city of Takoradi and about 10km southwest of Gold Fields’ Tarkwa mine.
The open pit mine began gold production in September 1992 and was acquired by AngloGold Ashanti in 2002 when it merged with Ashanti Goldfields. In 2024 Iduapriem produced 237,000oz of gold at a total cash cost of $1,118/oz.
In terms of the original proposal, Gold Fields would have owned 60% of the JV, AngloGold Ashanti 30% and the Ghanaian government 10%.
The benefits of the transaction, if approved, were expected to have been almost immediate, with a higher combined production of 900,000oz at a cost of less than $1,000/oz over the first five years and the life-of-mine extended to 2038.
Gold Fields’ asset base straddles Australia, Ghana, Chile and SA, while AngloGold no longer has mines in SA after it sold its last SA mining assets to Harmony Gold in 2020 for about R4.4bn.
While it no longer has any operations in SA, it remains listed on the JSE despite moving its headquarters to London, and its primary listing to New York last year, while adding a secondary listing in Ghana.
The decision to move its primary listing from Johannesburg to New York was inspired by the group’s strategy to close the valuation gap between it and the largest North American and Australian mining houses.
Gold Fields operates two gold mines in Ghana’s Ashanti Gold Belt — Tarkwa and Damang — while AngloGold Ashanti also has two mines in the country, Iduapriem and Obuasi.
Despite the disruption to Gold Fields’ inorganic growth ambitions, the group said that Ghana’s government had “expressed support” for the continued operations at Tarkwa, and that it would immediately prepare to extend the operation’s mine leases, due for renewal in 2027.
Meanwhile, Gold Fields has turned its focus to deal-making in Australia, announcing this week that it had made progress in its pursuit of Gold Road Resources in a deal valued at A$3.7bn (R44bn).
With Kabelo Khumalo and Jacob Webster
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.