When the gold goes, everything goes. This is how the latest excellent half-yearly results of AngloGold Ashanti from South Africa could be summarised.
Driven upwards by an ounce of gold that on Wednesday exceeded the symbolic threshold of $1,500, the first since April 2013, the continent’s leading gold digger by production (3.4 million ounces in 2018) announced Thursday a 21% increase in profits in the first half of 2019 ($120 million against $99 million in the same period last year). This result is all the more remarkable as over this period, the company’s overall gold production decreased by 1.5% to 1,554,000 ounces. This decline was due, among other things, to strikes and technical problems at AngloGold’s South African industrial units, and was ultimately more than offset by the strong 18% increase in the price of the yellow metal since the beginning of the year and by tight control of operating expenses.
The Kibali mine in the Democratic Republic of Congo, co-owned by AngloGold Ashanti, Barrick Gold and Société Minière de Kilo-Moto, was the first production unit to be recognized for its performance, while benefiting from lower costs and a high gold price, such as the Geita mines in Tanzania and Tropicana in Australia. « I am satisfied with the focus on costs, and this will continue, » said Kelvin Dushnisky, the company’s Executive Director, on the conference call following the announcement of the results. In a context of strong Sino-American trade tensions, which are pushing investors towards the safe haven value of gold, the manager also said he was « very satisfied with the rise in the price of gold », while stressing that « AngloGold Ashanti will continue to closely control costs and margins ». Founded in 1999, the mining company, which specializes in gold mining, is now the world’s third largest producer of gold, behind Canadian Barrick Gold and American Newmont Mining.