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AngloGold’s Obuasi mine in Ghana maintains its Phoenix-like rise from the ashes

AngloGold’s Obuasi mine in Ghana maintains its Phoenix-like rise from the ashes
Obuasi mine, Ghana. (Photo: AngloGold Ashanti)
Ed Stoddard
By Ed Stoddard
7 Aug 2022
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AngloGold Ashanti unveiled a slight decline in H1 earnings on Friday and said its Full Asset Potential review programme remained on track. One asset that appears to be blooming is its Obuasi mine in Ghana, which just a few years ago was overrun by an army of illegal miners. Its rise from the ashes of anarchy has been Phoenix-like.

AngloGold Ashanti no longer has operational assets in South Africa, though the “Anglo” in its name speaks to its roots in Johannesburg, where it retains its primary listing on the JSE. The “Ashanti” in its name speaks to its presence in Ghana — “the Gold Coast" — where it seems determined to stay despite some serious setbacks in recent years.  

To wit, the reboot of its Obuasi mine there remains firmly on track. A few years ago, the mine was overrun and occupied by thousands of artisanal miners after it had been temporarily mothballed. That rendered the asset pretty much worthless.  

A subsequent change of government saw a sleeping state wake up. In early 2017, AngloGold announced the Ghanian army had “largely cleared Obuasi of illegal miners, setting in motion plans to bring the mine back to life. The company’s activities have not been without controversy. A 2016 study that examined “the human rights concerns in communities around AngloGold concessions” in the area concluded, “that the rights of people in mining communities are mostly trampled upon due to mining activities”.   

anglogold obuasi Obuasi mine, Ghana. (Photo: AngloGold Ashanti)



This was before the illegal miners were cleared out by the army. AngloGold maintains that its community relations are far better now — environmental, social and governance issues are all the corporate rage these days, and companies’ records on this front are being subjected to scrutiny. This correspondent is not aware of any recent reports alleging serious rights issues in the area.  

“The relationship we have with the community is very good,” AngloGold CEO Alberto Calderon said in an interview. 

Jobs, investment and export earnings


The mine poured its first gold bars in more than five years in December 2019 and the reboot remains on course. That means jobs, investment and export earnings for the Ghanaian economy. 

“Group guidance for production remains unchanged at 2.55 million ounces to 2.80 million ounces, with the majority of the production growth expected to come from Obuasi,” AngloGold said in its interim results statement on Friday.  

Obuasi is on track to produce 240,000 to 260,000 ounces for the full year, the company said.  

“Obuasi is clearly one of our tier-one ore bodies, and I have great expectations for Obuasi in the longer term. Its geological potential is just enormous. I don’t think we have begun to tap it,” Calderon told Business Maverick.  



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He went on to say that he saw it producing as much as 450,000 ounces a year by 2025, adding: “I think beyond that it has further potential. Obuasi is really a cornerstone of this company.”  

Meanwhile, the company is continuing its asset review. Such an exercise can focus a company’s strategy and in the case of a gold producer reveal where its most profitable ounces in the future are likely to be extracted.  

It’s perhaps revealing that AngloGold is sticking to Obuasi and Ghana — where it has two other assets — while it got out of South African production before Calderon assumed the helm. Think about that: the company had a mine in Ghana that was taken over by thousands of illegal miners at one point, but South Africa was clearly regarded as having a higher risk profile. That speaks volumes about South Africa’s diminishing reputation as a destination for mining capital.  

Obuasi has risen Phoenix-like from the ashes of anarchy, while South Africa maintains its headlong descent into state failure.  

AngloGold’s earnings fell slightly in the period under review, which it mostly attributed to “higher operating costs, higher exploration and evaluation costs and adverse foreign currency movements”. 

Adjusted Ebitda for the first six months to the end of June 2022 was $864-million, as against $876-million in the first half of 2021. Headline earnings were $300-million, or 71 US cents per share, compared with $363-million. That translated into an interim dividend of 29 US cents per share.  

So it’s making decent money, and with a robust balance sheet — and production picking up — it seems on pace to make a lot more. DM/BM

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