* Fourth-quarter earnings plunge on strikes
* Strikes wipe out $208 million of earnings
* Company in transition as CEO exits
(Adds sector perspective, Chamber of Mines quote)
JOHANNESBURG, Feb 20 AngloGold Ashanti,
the world's third-largest bullion producer, posted a plunge in
quarterly earnings, hit by wildcat strikes at its South African
mines and troubles at one of its largest African operations.
The South Africa-based miner said on Wednesday
fourth-quarter adjusted headline earnings were 2 U.S. cents
compared with 61 U.S. cents in the previous quarter.
Production dropped to 859,000 ounces in the quarter after
250,000 ounces, or $208 million in earnings, were wiped out by
work stoppages that included illegal strikes and underground
sit-ins at its South African operations.
Full-year production was 3.9 million ounces, well off the
company's target of between 4.3 and 4.4 million ounces.
"We took a hit in South Africa," said chief executive Mark
Cutifani, who leaves to lead Anglo American in
April, adding that the company stalled the re-opening of its
South African operations this year.
"We were unhappy with the way one or two operations came
back to work and we sent people back home. We then spent about
ten days with the guys working, reinforcing the need to treat
each other with dignity and respect."
Obuasi, its largest mine in Ghana, also continued to
underperform. A decision in October to change the mine
development contractor cost the company $44 million. Already
part of AngloGold for more than a decade, Cutifani said Obuasi
was taking too long to deliver.
South African gold and platinum producers have been scarred
by violent labour clashes that late last year halted operations
and slashed production.
More than 50 people were killed in labour strife last year,
including 34 shot dead by police at Lonmin's
Marikana mine in August - the deadliest single security incident
in South Africa since apartheid ended in 1994.
"It is not just one company that is facing the challenges,
many of the companies are in the same boat," Roger Baxter, a
senior executive at the Chamber of Mines told a South African
parliamentary committee on Wednesday.
AngloGold's closest rival Gold Fields reported a 20
percent fall in headline earnings last week, largely due to the
impact of an illegal strike at two South African mines it has
since spun off.
Harmony Gold, however, which produces 95 percent of
its gold in South Africa, reported a 28 percent hike in headline
earnings for the three months to end-December.
AngloGold is already in the middle of a corporate and cost
review with some assets, like Namibia's only gold mine Navachab,
considered for sale. It has also pushed back some projects.
"Capital numbers have been kept tight, we continue to trim
where we do not see real short-term uplift," said Cutifani.
Gold equities have historically traded at a discount to the
metal but South African mining shares have felt additional pain
thanks to the sector's tarnished image.
"The thing that concerns me most is getting performance back
into the share price," Cutifani said.
AngloGold's shares dropped 3.90 percent to trade at 231.51
rand, in line with the JSE's gold index, which was 3.45 percent
lower by 1236 GMT.
(Reporting by Sherilee Lakmidas and Wendell Roelf; Editing by
Mark Potter and Helen Massy-Beresford)