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AngloGold Ashanti to suspend Brazil plant
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Production likely to fall, miner says
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2022 costs under control despite inflation
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Shares down 7%
(Updates share price at the end of the trading day)
By Helen Reid and Nelson Banya
Feb 22 (Reuters) - AngloGold Ashanti has no
plans to make acquisitions or to be bought, preferring to focus
on internal growth, CEO Alberto Calderon said on Wednesday,
after Newmont's $16.9 billion Newcrest bid reignited talk of
deals in the gold sector.
"The greatest value we can create is internal," Calderon
said. "Adding value with M&A and being able to justify a premium
is very difficult - I'm not saying impossible, but it is
difficult."
Asked if AngloGold could be acquired, Calderon said he could
not predict that. "We will stick to what we are doing," he said.
AngloGold shares slumped 7% to their lowest level since the
end of November after the miner said 2023 output would likely
fall as a plant in Brazil shuts down while improvements are made
to a tailings dam.
Tailings dams store the huge volumes of toxic sludge
produced when separating minerals from waste rock.
In common with other miners, AngloGold has been improving
tailings dams after breaches in recent years killed hundreds of
people in Brazil and elsewhere, prompting the development of a
new international standard on dam safety.
Johannesburg-based AngloGold said 2023 production excluding the Cuiaba mine - where the processing plant is being suspended - is expected at 2.45 million ounces to 2.6 million ounces of gold. The miner has temporarily stopped adding tailings to the dam at Cuiaba, as it plans to increase buttressing to bring it into line with a Canadian safety standard. The dam is safe, stable, and compliant with Brazilian regulations, AngloGold said. "Tailings dams are something that we all agree cannot fail, period," Calderon said.
AngloGold expects Cuiaba to produce 180,000 ounces of gold this year, down 25% from 2022.
Calderon said he could not yet give a timeline for the engineering work on the dam, and would inform the market later about the cost of the work. AngloGold's headline earnings per share for 2022 fell by 12% to 129 U.S. cents, in the middle of a guidance range the company gave last week.
AngloGold produced 2.742 million ounces in 2022, an 11% improvement on the previous year, and it managed to keep costs under control despite surging inflation. The company's all-in sustaining costs – a measure of the overall cost of mining – increased by 2% year over year, while total cash costs per ounce increased by 6%. (Reporting by Helen Reid and Nelson Banya in Johannesburg and Muhammed Husain in Bengaluru; editing by Nivedita Bhattacharjee, Jason Neely and Barbara Lewis)
