AngloGold could start harvesting mines if gold price falls further - CNBC Africa

AngloGold could start harvesting mines if gold price falls further

Southern Africa

by Reuters 0

AngloGold Ashanti, could begin "harvesting" some of its mines if the gold price sinks below $1,000 an ounce. PHOTO: Wikipedia

Africa's top bullion producer, AngloGold Ashanti, could begin "harvesting" some of its mines if the gold price sinks below $1,000 an ounce, its chief executive said on Monday.

"If we end up below $1,000 a gold price we may start harvesting some of the short-life mines for cash for a period until prices recover," Chief Executive Officer Srinivasan Venkatakrishnan said on a media conference call.

Venkat said he could stop investing in mines Mali such as Morila, Sadiola and Yatela, which are already reaching the end of their lives, and instead mine the gold that is left.

The bullion price currently sits at $1,117 an ounce having slid more than 40 percent from peaks in 2011.

AngloGold swung to a second-quarter profit with adjusted headline earnings totalling 6 U.S. cents per share in the three months to end-June from a loss of 1 cent a year earlier.

Wage talks between unions and South African gold producers were deadlocked last week, raising the threat of a strike as the mining industry still reels from a record stoppage last year.

Venkat said AngloGold's geographically diversified portfolio would help shield the company from the effects of any protracted strike in South Africa. South Africa accounts for about a third of group output.

Production dipped to 1,007 million ounces, slightly ahead of guidance but lower than last year's 1,098 million, mainly due lower output in South Africa and the sale of its Navachab mine.

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