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By unknown | Feb 08, 2008 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

AngloGold Ashanti's head office staff members are being sent to the mines as part of new chief executive Mark Cutifani's shake-up.

He has cut head office staff by 20percent, redeploying 60 managers to mining operations.

"My first impression is this group is not delivering to its full potential," Cutifani said, presenting the group's first full quarter since he replaced Bobby Godsell as AngloGold's head.

"Every asset will be reviewed, and then sold, fixed or improved."

AngloGold reported a R2,4billion loss for the year to end December 31, but nevertheless declared a dividend of 53c for the quarter to take the annual dividend to R1,43 per share.

Cutifani said two of the group's 20 mining operations failed to deliver, contributing to a 5percent drop in gold production to 1,4million ounces during the three months to December 31.

He singled out Obuasi in Ghana and Geita in Tanzania as the two chief problem areas, after South African mine safety and Eskom's power problems.

"Obuasi and Geita can be fixed by bringing in the right skills," Cutifani said.

Since taking the helm of AngloGold, Cutifani has had to deal with Anglo American's decision to sell its gold-mining arm and more recently Eskom's power crisis.

The group has reduced its electricity consumption by 17percent over the past four years, and Cutifani warned that it might have to close a local operation leading to retrenchments to meet the further 10percent cut Eskom has imposed on mines.

Ghana's power shortages resulted in AngloGold's Iduapriem mine reporting a 13percent drop in production on a 15percent increase in costs in the quarter.

AngloGold's global footprint now stretches to 20 countries, but its seven South African mines still contribute nearly 40percent of its total output.

Its local mines account for a disproportionate number of mine accidents. Of the group's 34 fatalities last year, 80percent were in South African mines.

Cutifani said his "Safety is Our first Value" campaign saw fatalities drop from nine during the first five weeks to none during the remainder of the quarter. A mud slide caused two fatalities so far this year.

"Fatalities are down 75percent since we made safety our first priority," Cutifani said.

Besides stressing safety, Cutifani has introduced a drive to make staff more accountable. This has included turning senior management into a smaller team.


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