After AngloGold Ashanti's disappointing first-quarter results and the company's announcement that it is reviewing its South African operations, the question is whether a plan to split the company is being reconsidered. The option was first proposed in 2014, but was shot down by shareholders. The situation was a little different then - the gold price was at $1255 an ounce and the company's debt, at $3.7-billion, was almost equal to its market capitalisation. Nonetheless, the plan to split the South African and international assets into two companies triggered a 15% slump in its stock price. At the time, the South African operations were experiencing declining grades and production, and the mining industry was embroiled in intense labour unrest. Three years later, the company has significantly reduced its debt, and labour relations have stabilised, but the gold price is languishing and production and ore grades continue to drop. The effects of this were evident in AngloGold's first-qu...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.