DAKAR Feb 13 AngloGold Ashanti is to
hold off on a $500 million expansion plan for its Sadiola joint
venture mine in western Mali until the security situation
becomes clearer, a company executive said on Wednesday.
Richard Duffy, executive vice-president of continental
Africa, said the world's third-largest gold producer was simply
waiting on developments in the French-led war to oust Islamist
rebels from the country's northern desert.
"We are waiting for a little more certainty in terms of how
the security situation in Mali pans out," Duffy told Reuters in
an interview in Dakar. "We are not scaling back, we are waiting
for some clarity."
Duffy said the expansion of the Sadiola mine in the Kayes
region, far from the fighting in the north, was ready for the
company's board approval. AngloGold operates in partnership with
Canada's Iamgold and the government.
"It is more about how quickly things settle. We don't expect
any immediate resolution: it is more about determining safety
for our people and any possible impact in the major centres like
Bamako and Kayes," Duffy said.
A four-week campaign by French and Malian forces since Jan.
11, backed by warplanes and helicopters, has driven the Islamist
militants out of the main towns of northern Mali into the
mountains and desert.
But the slow deployment of other African forces to help
secure urban centres and surrounding areas has raised security
concerns after insurgents carried out a surprise attack in the
northern city of Gao last weekend.
SEEKING TO CUT COSTS
Though AngloGold's operations in Mali are far from the
conflict zone, Duffy said the firm had reviewed its security and
asked for more support from Malian state security around sites.
"We have also put in place some restrictions and reviewed
emergency evacuation plans as a precautionary measure," Duffy
said, adding that the measures did not significantly increase
its operating costs.
AngloGold's Continental Africa operation - which excludes
South Africa - groups its mining sites in Ghana, Mali, Guinea,
the Democratic Republic of Congo, Namibia and Tanzania.
Its Malian operations, including the Morila joint venture
with Randgold Resources, and the Sadiola and Yatela
ventures with Iamgold, accounted for 5.8 percent of AngloGold's
annual production in 2011.
The Johannesburg-listed firm will report its fourth quarter
2012 results on February 20.
In the third quarter Continental Africa produced 357,000
ounces of gold at a cost of $916 per ounce, compared with
411,000 ounces at $739 per ounce in the same period in 2011.
Duffy said gold production from its Africa business for the
whole of 2012 would be broadly stable but there was a challenge
across the industry to keep production costs in line with
consumer price inflation (CPI).
"I certainly don't, in the short-term, see a reversal in the
cost trend. It is much more about managing costs to do better
than CPI," he said.
Duffy said lower ore grade had also impacted output but new
projects, such as its Kibali joint venture with Randgold
Resources in the Democratic Republic of Congo, would help offset