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22.09.2004 Business & Finance

AngloGold's Obuasi mine stabilising after poor quarter

By Busnessreport
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Johannesburg - The situation at AngloGold Ashanti's Obuasi mine in Ghana, where production has been disappointing, was now "stabilising", president Sam Jonah said yesterday.

Output at the mine, the star operation of Ashanti Goldfields before it was taken over by AngloGold, was below expectations in the second quarter, mainly due to lower tonnages stemming from lack of equipment.

When asked during a conference in Johannesburg if the situation was improving at Obuasi, Jonah replied: "It is stabilising. We are trying to get a balance [between grades and tonnage]."

Jonah headed Ashanti before the takeover and has relocated to South Africa to take up his new post with AngloGold.

The second-quarter results included two months of Ashanti's earnings and output. AngloGold acquired it for $1.44 billion (R9.35 billion) in April.

AngloGold said when releasing results in August that Ashanti mines had a "tough quarter", but delivery of new equipment was expected to be completed by the end of September.

Jonah did not say whether that goal would be met, but noted that sourcing new mining equipment was not easy since it was so specialised.

AngloGold, which is majority owned by Anglo American, posted a 29 percent fall in adjusted headline earnings a share to R1.27 for the second quarter compared with the first quarter.

AngloGold shares, which have lost a quarter of their value this year, gained 2.18 percent to R242.50 yesterday, while the gold mining index rose 2.41 percent.