AngloGold cuts 2009 production forecast

Production and Markets

AngloGold Ashanti Ltd, one of the world’s largest gold producers, has cut its production forecast by another 200,000oz for the year to end-December due to a two-month shutdown at its Tau Tona mine in South Africa.

According to the September quarterly results statement, the company will produce between 4.55-4.6Moz in 2009, compared with the forecast of 4.9-5Moz at the start of the year. Costs are also expected to escalate to US$515-530/oz from earlier forecasts of US$435-US$450/oz.

The company says it has suspended underground operations at Tau Tona for up to two months following an incident where a length of steel dislodged and fell down the shaft. AngloGold says the inspection of the steelwork along the mine’s shaft system will be completed by the end of 2009.

Tau Tona produced 194,000oz of gold in the first nine months of the year at costs of US$446/oz. The mine was forecast to produce 295,000oz this year at US$330-US$350/oz.

This is the second time the company has lowered its production forecasts after interruptions to operations in South Africa and Tanzania, and leach pad issues in the US, caused an adjustment of about 200,000oz to estimates at the half year.

AngloGold produced 1.19Moz in the September quarter, 5% more gold than the previous three month period. Geita in Tanzania and the Vaal River mines were the main contributors to the increase, as they produced 32% and 20% more gold in the quarter. Total cash costs across the group were 13% higher at US$534/oz.

The company reported an adjusted headline loss of US$596 million after a large hedge buyback during the quarter. In the three months to June the company made a US$167 million adjusted headline profit.