The AngloGold Ashanti Kelvin Dushnisky will lead a very different company to the one Srinivasan Venkatakrishnan headed as CEO, and the challenges facing him are mainly in Africa, which is the company’s largest source of gold.
Dushnisky, a Canadian who joins AngloGold as CEO in September, leaving his role as Barrick Gold president, comes to a firm that has turned to an interim profit, has rising output and has cut its South African contribution to just 10% of the group’s annual gold output.
Under the five-year stewardship of Venkatakrishnan, who joined AngloGold in 2004 when the company bought Ghana-focused Ashanti Goldfields in 2004, a crippling 12m oz hedge book was removed, costs were cut, assets were sold, South African mines closed or shut, and its debt burden brought down to manageable levels — all without resorting to asking shareholders to inject capital.
AngloGold reported a post-tax profit of $43m for the six months to end-June from a loss of $165m in the same period a year earlier.
Venkatakrishnan is clear on the pressing tasks facing his successor: bring the loss- making and now suspended Obuasi mine into profitable production in a $500m project and restore AngloGold’s credibility at the perennially problematic operation, return the 4km-deep Mponeng mine in SA to profit and resolve the spat with Tanzania’s government around royalties and taxes.
Dushnisky had indicated his enthusiasm for SA, preparing to move to AngloGold’s Johannesburg headquarters and calling the country a "great jurisdiction", said Venkatakrishnan.
There has long been a question about whether AngloGold would hive off its SA assets from its international portfolio of low-cost mines, creating two listed mining entities. The heat has come out of that question now that AngloGold has begun a restructuring process at the Mponeng mine, the world’s deepest, and the Mine Waste Solutions tailings business.
Since the failed attempt by Venkatakrishnan to separate the two businesses in 2014, a plan firmly rejected by shareholders as too costly, AngloGold closed and sold mines in SA.
Chris Sheppard, who cut his teeth in the platinum sector, has the job of overseeing the two-thirds cut in the annual spend of R3.3bn in SA on support and logistical services.
Up to 2,000 jobs could be lost, but Sheppard said the well-advanced retrenchment process with unions was revealing options to sell assets such as hospitals, laboratories, rail networks and other infrastructure to third parties, with employees going with the assets.
The process, which should be completed by the end of 2018, would return Mponeng to positive cash flows, he said.
When it comes to Tanzania, Dushnisky had the attributes needed to resolve what has become a protracted problem for the extractive industry there.
"As to his strongest attributes, his long and varied experience speaks for itself, but as well, I also found Kelvin to be a very effective listener, and very importantly, a good bloke of high integrity," said Peter Tomsett, who worked with Dushnisky on the turnaround of African Barrick Gold, later called Acacia, for four years until 2017.
Acacia became the poster child of the problems in Tanzania during 2017.