AngloGold’s sale of last SA mine is credit-positive, says Moody’s

The decision by AngloGold Ashanti to sell its last remaining SA assets is credit-positive as it will streamline the miner’s asset portfolio and optimise capital allocation, Moody’s Investors Service said on Friday. 

The world’s third-largest gold miner is selling its Mponeng mine, other old assets, and Mine Waste Solutions, a tailings recycling business, to Harmony Gold for $300m (about R4.4bn).

These are its last mining assets in SA, with the amount less than half what the assets are worth on AngloGold’s books.

With a remaining mine life of eight years, AngloGold would have had to start planning and preparing for a large capital investment in the near future to extend the mine’s life if it was committed to keeping this asset in its portfolio, Moody’s said.

The company’s overall scale of production and portfolio diversification will not deteriorate as a result of the sale because it is more than offset by the recent completion of the Obuasi mine redevelopment in Ghana, the agency said.

“AngloGold selling its Mponeng mine in SA is another positive step in its strategy to streamline its mine portfolio and lower its overall cost structure,” said Rehan Akbar, a vice-president and lead analyst for AngloGold Ashanti at Moody’s.

“The Mponeng mine is the world’s deepest gold mine and has a relatively high cost structure because of the complexities of operating a mature and ultra-deep mine.” 

With Allan Seccombe

gernetzkyk@businesslive.co.za