AngloGold’s interim profit more than trebles

World number three gold miner AngloGold Ashanti will more than treble interim profit, spurred mainly by higher gold prices, with more in store for shareholders as the metal price continues to rise.

AngloGold, which is untangling itself from SA by selling its last mining assets in the country of its birth to Harmony Gold, will post headline earnings of between $392m (R6.4bn) and $416m for the six months to end-June.

This compares with the $120m it reported in the same period a year earlier. The results will be made public of August 7.

The gold price AngloGold received increased by a quarter and its mines in Australia, Africa and South America benefited from weaker currencies against the dollar.

In the first six months of the year, the dollar gold price increased by 16% to $1,783/oz. Since then the price is trading at $1,940/oz as investors fret about the economic uncertainty and damage caused by the global Covid-19 pandemic.

By removing the high-cost, risky, deep-level Mponeng mine in SA from its portfolio, AngloGold will have a suite of relatively cheaper, more mechanised operations that will yield hefty returns in a high gold price environment.

AngloGold’s shared mines contributed $41m to revenue, with Kibali operation shared with Barrick Gold in the Democratic Republic of the Congo the standout performer in the period.

Basic earnings of $410m-$432m compared with $114m the year before. These would receive a boost from a $17m non-cash impairment reversal on its SA assets with the February agreement to sell them to Harmony for $200m cash and $100m in deferred payments.

Gold output for the interim period was 1.469-million ounces, down from 1.554-million ounces before.

SA was the country worst affected by the Covid-19 pandemic after the government shut the economy at the end of March. Underground mines were only permitted to return to full capacity under stringent health and safety protocols from June.

AngloGold has Mponeng, the world’s deepest mine at 4km below surface, as well as Mine Waste Solutions, a tailings retreatment business that was permitted to return to operation on a limited basis.

AngloGold singled out Geita in Tanzania, Iduapriem in Ghana and Serra Grande in Brazil as the standout performers in the six months.

seccombea@businesslive.co.za