Gold mining giant AngloGold Ashanti has announced a new restructuring process in South Africa, which will make around 2,000 employees redundant.
Image: AngloGold Ashanti’s operations at the Kopanang mining site. Photo: courtesy of AngloGold Ashanti.
The gold miner indicated that its South African operations are being crippled by a large number of challenges. Included in these are growing depth and distance from central infrastructure along with decreasing production profiles, and escalations in costs.
AngloGold Ashanti said that the challenging factors have continued to outpace inflation and gold price, while adding that the margins are negatively impacted by a much stronger exchange rate.
Currently, the gold mining company has around 8,200 employees across South Africa. Its latest restructuring move will impact employees working across various categories and levels, including executive committee and senior management levels.
The company, in a statement, said: “In order to safeguard the long-term sustainability of its remaining South African business, AngloGold Ashanti has considered various options, including but not limited sales and services reductions, subject to the outcomes of the consultation process.”
AngloGold Ashanti has launched a consultation process with employees in an effort to restructure its cost base to match and support a smaller operating presence in South Africa.
By divesting the Kopanang and Moab Khotsong mines, earlier this year, and by closing the TauTona mine, AngloGold Ashanti had brought down its South African production by around 50%.
The gold miner is now left with the Mponeng underground gold mine, and a surface operation in South Africa. Both the assets have the potential for long lives, said AngloGold Ashanti.
In June 2017, the gold miner said that the restructuring of its South African asset portfolio was going on to ensure that the on and off-mine cost structures are aligned with the size of the reduced production base in the country.
At that time, AngloGold Ashanti announced that it would lay off one third of its workforce in South Africa in order to make a turnaround of its loss-making operations in the African country.
AngloGold Ashanti then said that it will make close to 8,500 jobs redundant out of the 28,000 roles it had during the period in its South African business.