ALBERTO CALDERON: AngloGold Ashanti extends its capital markets reach

AngloGold Ashanti announced on Friday the intention to move our domicile to the UK, and to transition our publicly traded shares in the US to a full primary listing on the New York Stock Exchange following approval received from the SA authorities. This is an important step in taking forward our strategy and aligning our corporate footprint with our portfolio, which is now based entirely outside SA.  

We are proud of our SA heritage and our relationship with the country remains strong. Our large corporate office in Johannesburg, from which our team provides critical services to our global portfolio, our African operations in particular, will be unaffected by this change. Over 40% of our shareholders are South African and they will retain unaltered access to our shares, which will remain listed on the JSE and A2X exchanges. We hope they will continue to support and share in our enduring success. 

I became CEO of AngloGold Ashanti in September 2021. This was a year after the last of our SA assets were sold to Harmony Gold, which was better placed to give them a longer productive life. Given that we have no intention to diversify into other metals, and that SA’s remarkable century-old gold industry presents limited opportunities for our production profile, the prospects to sustain and grow the company exist elsewhere in the world. We are completing a new mine in Ghana and are permitting others in the US and Colombia.  

In that context, when I arrived I was often asked whether we had the right corporate structure, but as a new CEO I felt there were more urgent matters to attend to first. Our costs had increased rapidly relative to our global peers in the preceding year. Obuasi, one of our largest mines, had suspended production after a serious underground accident. Our business performance required urgent attention. After three months in the role I estimated it would take around three years of focused effort to safely and responsibly regain cost competitiveness. That remains the goal although we have already made significant strides in achieving that objective.  

Our priority was to simplify our internal organisational structure and so create more accountability and efficiency. We also strengthened our leadership with a diverse team of experts from across the global mining sector. Their focus is to improve capital allocation and execution while diagnosing and addressing our performance shortcomings.  

We have made good progress. The cost gap with our more efficient peers almost halved last year and our exploration team has replenished our reserves. Most importantly, we have become one of the safest companies in the mining sector with workplace injury rates less than half that of our peers. There is still a long way to go, and we will have bumps in the road, but I am confident we are right on track. 

As those fundamental improvements gained momentum, it was the right time for the board to reassess the question that has been a feature of our discourse with shareholders: with no remaining SA assets, all our growth outside the country, most of our trading liquidity offshore, plus a persistent valuation gap with our international peers, was there value in changing our corporate structure? 

Comprehensive review

This is a significant decision to make. From the outset we have treated it with the gravity it deserves. We conducted a comprehensive review of different structures and analysed the various complex regulatory, legal, tax and human resources considerations as well as the capital market dynamics.  

As we looked at these options it became clear that we should indeed make changes. The transaction we announced on Friday, May 12, will build on our strengths and utilise our established corporate infrastructure, while also removing unneeded complexity, aligning with our evolving asset base, and bringing us closer to our higher valued peers. All of that puts us in a stronger position to add value for all our stakeholders. 

Our domicile will move to the UK, which is a logical step given that we hold our operating assets and issue our debt through a UK-headquartered subsidiary. This means we are familiar with a tax and regulatory landscape that is suited to our requirements. Two-thirds of our daily share liquidity already takes place on the New York Stock Exchange and so it makes sense to make that our primary listing. That should give us a better chance of trading in line with our North American peers, which have about double the volumes and trade at significant premiums on common valuation metrics.  

AngloGold Ashanti operates in nine countries. We face different challenges in every country but we are confident we can work with, and in, all our host nations to prosper together. The same is true in SA — we are grateful for the support we have consistently received from our shareholders, our employees past and present, the communities we have worked and live in, and from our regulators across the board. These strong relationships have been instrumental to our success. But the profile of our business has changed and it is the right time to start a new chapter. 

We will remain inextricably linked to SA. We will keep our name and our iconic branding. We will maintain our Johannesburg office with both seasoned professionals and lots of promising young talent, all of whom will continue to participate in AngloGold Ashanti’s global business and improving prospects. Our local listings will also ensure that SA remains an important capital market and source of liquidity for AngloGold Ashanti.  

We will continue to honour and build upon our many commitments to SA stakeholders, including new investments in education and rural development to benefit former mineworkers and their families. Extending our reach to the US is, in part, testament to our regulators, who have recognised this natural progression of our structure and strategy and acknowledged that our main markets and operations — as well as prospects for future growth in gold production — are all offshore. 

• Calderon is AngloGold Ashanti CEO.