AngloGold Ashanti said it has signed a $375 million, five-year underground mining deal with Australia’s African Underground Mining Services and Ghana’s Rocksure International, the junior partner in the joint-venture company that will mine Obuasi.
AngloGold acquired Obuasi when it bought Ashanti Goldfields in 2004, but the mine has not lived up to its potential despite numerous management interventions.The Obuasi mine was abandoned in 2014 to develop a new operating plan. Efforts to bring in Randgold Resources to share the cost and risk failed.
The company revealed that $375 million is the operating cost number rather than the capital to be spent on redeveloping the underground mine and refurbishing the processing plant. The capital needed for such a project is estimated to be as high as $500 million.
AngloGold will provide African Underground Mining Services and Rocksure International with all the equipment needed to start operations in the first quarter of 2019.
Developing Obuasi will the first order of business for Kelvin Dushnisky, the new CEO of Anglogold Ashanti. As the Kibali joint-venture gold mine with Randgold in the Democratic Republic of Congo is completed, Obuasi will become one of the most closely watched assets in the AngloGold suite, being a perennial underperformer and one which is now the key investment project in the company.
According to Graham Ehm, AngloGold’s executive vice-president in charge of group planning and technical, “we’ve worked closely with the government of Ghana to progress the redevelopment of Obuasi gold mine into a modern, productive operation, making it a key asset in our portfolio for the long term”.