AngloGold draws a line under the Rainbow Nation by selling off its last assets

Announced in May 2019, the sale of AngloGold Ashanti’s ultimate South African mining assets to Harmony Gold has now been completed. This transaction completes a long process of disengagement from the Rainbow Nation.

For AngloGold Ashanti, the world’s third-largest gold producer, this is a turning point. By announcing on Wednesday 12 February that it will sell the remainder of its South African assets to its compatriot Harmony Gold for around 300 million dollars, the mining group has announced its definitive withdrawal from the Rainbow Nation, its homeland, where it has been continuously disengaging since the early 2000s. The result is a mining industry that is in constant decline, with rising costs, dwindling resources, mine closures, redundancy plans and increasing labour unrest. The negative spiral is even more pronounced in the gold sector – AngloGold’s main area of activity – which saw its production fall by 83% between 1980 and 2018. As a result, AngloGold is now looking elsewhere for growth opportunities (Tanzania, Ghana, Mali, DRC, Australia, etc.). The announcement of the sale of its last South African assets can therefore be seen as the final chapter in a long process of disinvestment from the Rainbow Nation.

In its press release, the group, which confirms that the agreement will allow it to « focus on higher-yielding assets », states that Harmony will acquire the Mponeng gold mine – the deepest in the world – as well as the Tau Tona and Savuka gold mines. First Uranium Corporation, AngloGold’s subsidiary active in the reprocessing of mine waste, will also become part of Harmony. In settlement of the transaction, which is expected to be completed by June subject to regulatory approvals, AngloGold Ashanti has indicated that it will receive an initial payment of $200 million for its assets, followed by two further drafts to be paid by 2027, with the final cumulative amount (approximately $100 million estimated) to be determined based on realized gold production and world prices. Harmony, which recently returned to profit, welcomed the potential of the acquisition through CEO Peter Steenkamp, who said that the acquisition would « increase cash margins », including an expected increase in gold production of approximately 350,000 ounces per year.

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The location of the Mponeng mine, adjacent to the Kusasalethu site (Harmony Gold), in Gauteng province. © Harmony Gold