AngloGold Ashanti Brasil, a subsidiary of South Africa-based gold mining company AngloGold Ashanti, has decided to put the Córrego do Sítio (CDS) mine in the Minas Gerais state of Brazil on care and maintenance.

The closure follows a period of sustained operating losses at the CDS mine due to poor production and higher costs.

In a statement, AngloGold Ashanti said: “The CDS mine in Brazil’s Minas Gerais state has for a sustained period reported challenging operating results characterised by poor production and costs that remain well above the gold price.

“The mine has been unable to sustain itself or to fund the capital needed to ensure its long-term future.”

During the first six months of 2023, the mine produced 30,000oz of gold at a total cash cost of $2,278/oz and an all-in sustaining cost of $3,031/oz, resulting in a negative free cash flow of $30m.

Last year, the CDS mine produced 69,000oz at a total cash cost of $1,946/oz and an all-in sustaining cost of $2,887/oz.

The decision to put the mine on care and maintenance will result into redundancies. However, the company added that it has taken steps to minimise the number of layoffs which includes transferring some employees to other operations in equivalent roles.

“AngloGold Ashanti Brasil commits to ensuring this process is undertaken in a manner that ensures all those affected will be treated with dignity and respect, that all legal obligations are met and that stakeholders are kept apprised of all material developments through the process,” the statement added.

The company will disclose the impact of the suspension of activities at CDS mine in its third quarter market update in November 2023.