With OPEC heading to Vienna…
America’s biggest oil field just…
These are bad days for AngloGold Ashanti in Ghana, where its gold mining operations are suffering from rising costs and declining production to the point that the company will have to make cuts at the country’s largest gold mine.
As reported by Reuters on Monday, AngloGold Ashanti CEO Srinivasan Venkatakrishnan conceded that the mine “is currently making losses at the operating level … The current cost structure at the operation is clearly unsustainable.”
Since 2008, AngloGold has seen production costs more than double at the Obuasi mine. This, coupled with a decline in gold prices has made the Ghana branch dependent on financing from the parent company.
Related article: Foreign Mining Companies Flee China
Second-quarter 2013 financial results show a loss.
Now layoffs are in order, with the company citing major losses primarily due to labor costs and electricity prices. There have been no details on the number of layoffs to be expected, but the company has said layoffs are being considered presently, among other operational cuts.
According to the Ghana Mineworkers' Union, though, AngloGold Ashanti has already given some 450 people notification of layoff. The total workforce comprises more than 5,000 people.
Moody’s ratings agency has assigned a (P)Baaa3, negative outlook to AngloGold Ashanti as of 25 July.
By. Charles Kennedy
Charles is a writer for Oilprice.com