Africa-focused gold producer Rangold Resour-ces says it is pulling out of a joint venture with AngloGold Ashanti to redevelop AngloGold’s ageing Obuasi mine in Ghana.
A statement issued by AngloGold Ashanti yesterday said “Randgold Resources Limited has informed AngloGold Ashanti that it wishes to terminate the conditional Investment Agreement concluded in September 2015, for a joint venture to redevelop the Obuasi Mine, as the proposed investment does not meet Randgold’s investment criteria.”
This decision according to the statement followed concerted efforts by both companies to improve the project’s returns and also to secure an appropriate set of consents from the Government of Ghana, within an ambitious timeframe that would have allowed for a feasibility decision on the redevelopment of the mine in early 2016.
Under the Agreement, Randgold will lead and fund a development plan designed to rebuild Obuasi as a viable long-life mining business with an attractive cost structure and returns.
The terms would allow the Iduapriem mine, and other non-core assets to be retained under the sole ownership of AngloGold Ashanti.
It said although, improvements have been identified, these have not been sufficient to commit to a substantial investment under the prevailing conditions.
The Minister of Lands and Natural Resources of Ghana Nii Osa Mills according to the statement had approved continuation of Obuasi’s limited operating phase during Q1 2016.
Limited operations will be undertaken at reduced cost, compared to 2015, including maintaining the operations, security, environmental management, optimising the feasibility study, as well as ongoing sustainability work.
“We have made a concerted effort to unlock a new opportunity for Obuasi, and the work we have done lays a good foundation for the operation in the long term,” AngloGold Ashanti Chief Executive Officer Srinivasan Venkata-krishnan said.
“But in the current environment, we believe it is prudent to conserve our resources and to revisit this opportunity when market conditions improve,” he said.
By Times Reporter