Global mining giant and South African mining mainstay, AngloGold Ashanti says it is selling its remaining assets in South Africa for an unassuming $300million to Harmony Gold, reports Reuters. The transaction, subject to approvals by the mining ministry and competition watchdog, could be completed by June 30.
Harmony Gold, which operates in South Africa and Papua New Guinea, says that acquiring AngloGold’s assets provides a strategic, financial, operational and geographical fit to their plans.
“The acquisition has the potential to improve our overall recovered grade and increasing our cash flow margins”, says Peter Steenkamp, Harmony’s CEO. Furthermore, Harmony’s gold production is set to increase by around 350,000 ounces a year due to the acquisition.
AngloGold will receive the payments “subject to subsequent performance”, with additional payments due if Harmony develops the West Wits mines below the existing mining infrastructure. Harmony is also set to acquire the Mponeng mine (the world’s deepest gold mine) and surface assets, such as a surface rock dump processing business and a mine waste retreatment operation.
“At this point in time, we have made no decision to go down below infrastructure”, says Steenkamp, who claims that further development was unlikely to involve a vertical shaft even though there is “massive resource below infrastructure”.
This deal marks the exodus of AngloGold from South Africa, the company has emerged from mining tycoon Ernest Oppenheimer’s forays in South African mining nearly one hundred years ago. AngloGold’s trajectory now seems to be towards more profitable mines in Ghana, Australia, and the Americas, writes Fin24 via Bloomberg.
“This sale helps deliver on our commitment to sharpen our management focus and capital allocation on the highest return investment options available to us”, says Kelvin Dushnisky, AngloGold’s CEO.
Harmony, backed by South African mining billionaire, and brother-in-law of President Cyril Ramaphosa, Patrice Motsepe’s African Rainbow Minerals, has been hunting for deals to boost declining reserves and grades at its South African mines.
AngloGold is, however, still retaining its interests in Rand Refinery and its obligations under the Silicosis Class Action Settlement, a legal battle by miners seeking compensation for illnesses they blame on negligence in health and safety.
No job cuts are planned by Harmony Gold, who will now employ 6000 more people in its new operations.
By Luis Monzon
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