AngloGold Falls to 3-Year Low on Output Miss: Johannesburg Mover

By Carli Cooke - Apr 10, 2012 11:43 PM GMT+0800

AngloGold Ashanti Ltd. (AU), the third- largest producer of the metal, fell to the lowest in more than three years in Johannesburg trading after missing an output target as South Africa stepped up mine-safety stoppages.

The stock declined 3.1 percent to 260.29 rand by the close, the lowest since February 2009. AngloGold said today it fell short of its first-quarter target of 1.03 million ounces. Smaller rivals Gold Fields Ltd. (GFI) and Harmony Gold Mining Co. lost 0.7 percent and 2.3 percent, respectively.

Anglo American Plc (AAL), Lonmin Plc and Aquarius Platinum Ltd. lost metal production after government-imposed safety stoppages increased late last year. AngloGold Chairman Tito Mboweni, a former central bank governor, said the Department of Mineral Resources’ approach was akin to “coming with a sledgehammer.” The state orders mines, or parts of them, to suspend production after fatal accidents, or injuries, or to conduct audits.

AngloGold produced about 980,000 ounces in the three months ended March 31, the Johannesburg-based company said in a statement. Safety stops cut 76,000 ounces, it said, the equivalent of $126 million at current prices. Gold declined 0.1 percent to $1,638.95 an ounce at 4:38 p.m. in London.

Five workers, including one injured in September, died after accidents at South African operations during the quarter, while one was killed in Argentina, the company said in an e- mailed response to a query today.

‘Desired Results’
Safety halts will continue as they have had “the desired results,” Mines Minister Susan Shabangu said March 20. Mine deaths declined to 123 last year from 127 in 2010, while injuries were cut by 15 percent to 2,918, she said.

First-quarter output was also eroded by unplanned repairs at the main shaft of the Obuasi mine in Ghana, AngloGold said. There will be a “consequential impact” on costs, it said. The company had planned to produce bullion at a cash cost of $820 to $835 an ounce.

In Mali, AngloGold and its venture partners “continue to closely monitor the situation,” following last month’s coup and the economic sanctions imposed on the military junta until recently, it said. The Morila, Yatela and Sadiola joint ventures in Mali “operated as normal,” AngloGold said.