•Focus on people, safety and sustainability. People are the foundation of our business. Our business must operate according to our values if it is toTo remain sustainable in the long term.term, we must live our values in the conduct of our business. This encompasses being accountable for our actions and decisions, and respecting all, including employees, communities and the environment. ESG principles are integrated into every aspect of our business.
•Promote financial flexibility. We must ensure our balance sheet always remains able to meet our core funding needs.
•Optimise overhead costs and capital expenditure. All spending decisions must be thoroughly scrutinised to ensure they are optimally structured and necessary to fulfil our core business objective.
•Improve portfolio quality. We have a portfolio of assets that must be actively managed to improve the overall mix of our production base as we strive for a competitive valuation as a business.
•Maintain long-term optionality. While we are focused on ensuring the most efficient day-to-day operation of our business we must keep an eye on creating a competitive pipeline of long-term opportunities.
45
INTELLECTUAL PROPERTY
AngloGold Ashanti, as a group, is not dependent on intellectual property, commercial or financial contracts or new manufacturing processes for the conduct of its business as a whole.
THE REGULATORY ENVIRONMENT ENABLING ANGLOGOLD ASHANTI TO MINE
AngloGold Ashanti’s rights to own and exploit Ore Reserve and deposits are governed by the laws and regulations of the jurisdictions in which these mineral properties lie.
AngloGold Ashanti is subject to a wide range of laws and regulations governing all aspects of its operations, including such areas as environmental protection, reclamation, exploration, development, production, taxes, immigration, labour standards and employment issues, occupational health, mine safety, toxic substances and wastes, securities and foreign corrupt practices. AngloGold Ashanti has made, and expects to make in the future, significant expenditures to comply with these laws and regulations. Non-compliance can result in violations and legal claims, as well as substantial fines, penalties, reputational damage and delays in day-to-day operations. Pending or proposed changes to existing laws and regulations, as well as any proposed or contemplated new laws or regulations could also have significant impacts on AngloGold Ashanti’s business and results of operations, the extent of which cannot always be predicted.
There are in some cases certain restrictions on AngloGold Ashanti’s ability to independently move assets out of certain countries in which it has operations, or transfer assets within the group, without the prior consent of the local government or minority shareholders involved. See “Item 10D: Exchange controls” for details.
For more information on the risks and uncertainties associated with AngloGold Ashanti’s mining rights, see “Item 3D: Risk factors”, in particular the risk factors entitled “AngloGold Ashanti’s mining rights in the countries in which it operates could be altered, suspended or cancelled for a variety of reasons, including breaches in its obligations in respect of such mining rights”, “Failure to comply with laws, regulations, standards and contractual obligations, breaches in governance processes or fraud, bribery and corruption may lead to regulatory penalties, loss of licences or permits, negative effects on AngloGold Ashanti’s reported financial results, and adversely affect its reputation”, “Title to AngloGold Ashanti’s properties may be uncertain and subject to challenge”, “AngloGold Ashanti’s mineral deposits, Ore Reserve, and mining operations are located in countries where political, tax and economic laws and policies may change rapidly and unpredictably and such changes and policies may adversely affect both the terms of its mining concessions, as well as its ability to conduct operations in certain countries” and “AngloGold Ashanti’s Ore Reserve, deposits and mining operations are located in countries that face instability and security risks that may adversely affect both the terms of its mining concessions, as well as its ability to conduct operations in certain countries”.
SOUTH AFRICA
As part of the South African asset sale, AngloGold Ashanti Limited sold its remaining three mining rights in South Africa to Golden Core Trade and Invest (Pty) Ltd (Golden Core) and Harmony Gold Mining Company Limited pursuant to a sale agreement concluded on or about 12 February 2020, as amended and reinstated from time to time (SA Sale Agreement). These mining rights relate to operations in the West Wits area. For further information on the South African asset sale, see “Item 18: Financial Statements—Note 9—Discontinued operations and assets and liabilities held for sale—South African asset sale”.
Pursuant to the SA Sale Agreement, AngloGold Ashanti and Golden Core executed a notarial deed of cession of the mining rights with DMRE references GP 30/5/1/2/2/01 MR and GP 30/5/1/2/2/248 MR to transfer and cede these mining rights to Golden Core (Deed of Cession). The MPRDADeed of Cession has been lodged for registration at the Mineral and Petroleum Titles Registration Office (MPTRO) to transfer such mining rights from AngloGold Ashanti to Golden Core. While the registration of the Deed of Cession is still pending, the risk in, benefit of, and ownership of these mining rights between the parties shall be deemed to have passed to the cessionary on 30 September 2020, the date of the notarial execution of the Deed of Cession, pursuant to clause 2 of the Deed of Cession.
With respect to the mining right held under DMRE reference GP 30/5/1/2/2/11 MR, AngloGold Ashanti and Golden Core agreed to make an application in terms of section 102 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 (MPRDA) at the Department of Mineral Resources and Energy (DMRE) after the closing date of the SA Sale Agreement requesting, among other matters, the incorporation of this mining right into the mining right with DMRE reference GP 30/5/1/2/2/01 MR (Harmony Consolidation Application). AngloGold Ashanti also executed a notarial conditional deed of abandonment pursuant to which it conditionally abandons this mining right in terms of section 56(f) of the MPRDA (Deed of Abandonment) on condition that ministerial consent is granted in respect of the Harmony Consolidation Application.
On the date of registration of the Deed of Cession and the grant of the Harmony Consolidation Application, AngloGold Ashanti will cease to be a holder of mining rights in South Africa. Once the transaction has been fully implemented, the general laws relating to mining outlined below will no longer be applicable to the company.
46
General laws relating to mining
The Mineral and Petroleum Resources Development Act (MPRDA)
Mineral and Petroleum Resources Development Act, Amendment Act and Regulations
The MPRDA came into effect on 1 May 2004. The objectives of the MPRDA are, amongst other things, to allow for state sovereignty over all mineral and petroleum resources in the country, to promote economic growth and the development of these resources and to expand opportunities for the historically disadvantaged. Another objective of the MPRDA is to ensure security of tenure for the respective operations concerning prospecting, exploration, mining and production. By virtue of the provisions of the MPRDA, the state ensures that holders of mining and prospecting rights contribute to the socioeconomic development of the areas in which they operate.
The Mineral and Petroleum Resources Development Amendment Act, No. 49 of 2008 (MPRDAA) was passed by the South African Parliament in 2008 and became effective on 7 June 2013. Its purpose is to amend the MPRDA in order to, amongst other things:
The Mining Charter
Mining Charter, 2004
The Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry, 2004 (Mining Charter, 2004) was published in August 2004. The Mining Charter, sprang from2004 was developed in terms of section 100(2)(a) of the MPRDA and also took effect on 1 May 2004. The Mining Charter, 2004 committed all stakeholders in the mining industry to transfer ownership of 26 percent of their assets to black or historically disadvantaged South Africans (HDSAs) within 10 years. The Mining Charter, 2004 also setsset targets for, amongst other things, the advancement of HDSAs into management positions, the employment of women, procurement of goods and services from HDSA-owned companies, training, community development and the upgrading of mine housing. Mining companies are required to deviseformulate plans to achieve thesethe aforementioned targets, must identify current levels of beneficiation and must indicate opportunities for growth.
Following a reviewof the progress made in the transformation of the mining industry against the Mining Charter, are to:
Mining Charter, require mining companies to:2017
On 15 June 2017, the MRE Minister gazetted the Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2017 (2017 Charter)(Mining Charter, 2017), which came into effect on the same day (Reviewed Mining Charter).day. The Reviewed Mining Charter, seeks2017 sought to align the Revised Mining Charter, 2010 with the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, in order to ensure meaningful participation of black people in the mining industry and to provide for policy and regulatory certainty to ease the investment
in and the development of the mining industry. The Chamber of MinesMinerals Council launched an urgent application at the High Court of South Africa (Gauteng Division) to interdict the implementation of the Reviewed Mining Charter, 2017 and set it aside. The DMR filed papers in court and the urgent application was due to be heard in court on 14 September 2017. However, the Minister and the Chamber of Mines reached an agreement on 13 September 2017 wherein theMRE Minister undertook to suspend the Mining Charter, 2017 Charter pending the outcome of DMR/Chamber of Minesthe DMRE/Minerals Council application. The DMR/Chamber of Mines applicationOn 4 April 2018, judgement was set to be heard in February 2018, but has now been postponed indefinitelyhanded down by the High Court and on 12 August 2020, the basisMinerals Council released a media statement indicating that the ChamberMRE Minister had withdrawn the notice of Mines has entered into a new round of negotiations with the DMR, facilitated by President Ramaphosa.
Mining Charter, 2018
On 27 September 2018, the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (Mining Charter, 2018) was published and became effective on the same date. The Mining Charter, 2018 repeals the Mining Charter, 2004; the Mining Charter, 2010; and the MPRDA.Mining Charter, 2017. The CodeMining Charter, 2018 stipulates that it is to be read in combinationtogether with implementation guidelines, gazetted on 19 December 2018. On 26 March 2019, the Minerals Council filed an application for judicial review to set aside certain provisions of the Mining Charter, 2018. On 5 May 2020, the High Court of South Africa (Gauteng Division) heard the application for judicial review. On 30 June 2020, the High Court held that certain affected communities and other legislation relatingtrade unions that were party to measurement of socio-economic transformation in the South African mining industry. The Code does not replace the Charter nor any key legislation and lawslegal proceedings relating to the minerals and the petroleum industry but serves as a statement of policy and principles that assists in the implementation of both the MPRDA and the Charter. The Reviewed Mining Charter, proposes the repeal of paragraph 3 of the Code which provides for2017 should be joined to this review application of the Code of Good Practice for permits/licences granted under the Precious Metals Act, 2005, and the Diamonds Act, 1986.
47
The BBBEE Amendment Act
The Broad-Based Black Economic Empowerment Act, No. 53 of 2003 (BBBEE Act) is a law of general application in respect of Broad-Based Black Economic Empowerment (BBBEE) and enables the Minister of Trade and Industryto drive BBBEE across all sectors of the economy. On 23 January 2014, the President of South Africa assented to the BBBEEBroad-Based Black Economic Empowerment Amendment Act, on 23 January 2014.No. 46 of 2013 (BBBEE Amendment Act). The BBBEE Amendment Act came into effect on 24 October 2014 with the object of amending the Broad-based Black Economic EmpowermentBBBEE Act 53 of 2003 (BBBEE Act) to provide a framework of principles, strategies and guidelines aimed at promoting the broad-based socio-economic empowerment of HDSAs across the South African economy and society in the form of ownership, management, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. The BBBEE Amendment Act includes a number of changes to the framework under the BBBEE Act, including:
Land Expropriation
Constitutional Amendment Bill
On 27 February 2018, the National Assembly resolved to assign the Constitutional Review Committee (CRC) to review section 25 of the Constitution of the Republic of South Africa (Constitution) and other clauses where necessary to allow the state to expropriate land in the public interest without compensation. The CRC has been given until 30 August 2018 to report back to the National Assembly. This resolution follows the African National Congress’s (ANC) resolution at its elective conference in December 2017 to pursue expropriation of land without compensation in a manner that does not destabilise the agricultural sector, endanger food security or undermine economic growth and job creation. It is unclear at this stage what recommendationsIn its report dated 15 November 2018, which was adopted by Parliament on 4 December 2018, the CRC willrecommended that section 25 of the Constitution be amended to make in its report or how the proposedexplicit that expropriation of land without compensation will affect AngloGold Ashanti’s operations.is a legitimate option for land reform. As a result, the draft Constitution Eighteenth Amendment Bill, 2019 (Constitutional Amendment Bill) was published for public comment on 6 December 2019. The MPRDA entrenches a statutory right of access for the mining right holder to the mining areaConstitutional Amendment Bill proposes that, when land and any improvements thereon are expropriated for the purposes of conducting mining operations andland reform, the amount of compensation payable may be nil. The Constitutional Amendment Bill does not requirespecify the mining right holdercircumstances in which a court may determine that the amount of compensation is nil, but states that national legislation must set out such circumstances. On 10 December 2019, the Constitutional Amendment Bill was referred to ownthe National House of Traditional Leaders for comment by the end of January 2020. Provincial public hearings on the Constitutional Amendment Bill were held in February and March 2020. During May 2020, the Ad Hoc Committee to Amend Section 25 of the Constitution (Committee) met to discuss the extension of the mandate of the Committee, which would have lapsed at the end of May 2020. The Committee agreed that it should request an extension of its mandate until such time as gatherings are permitted, as the Committee had not completed its public hearings due to the COVID-19 pandemic. The Committee was re-established, pursuant to this request, on 30 June 2020. In order for the Constitutional Amendment Bill to be adopted by the South African Parliament, two-thirds of the members of the National Assembly, the lower house, and at least six out of the nine provinces of the National Council of Provinces, the upper house, must vote in favour of the amendment.
Draft Expropriation Bill
Separately, a draft expropriation bill (Expropriation Bill) was published for public comment on 21 December 2018. The Expropriation Bill was introduced in the National Assembly during October 2020 as the Expropriation Bill, 2020. The Expropriation Bill contains a provision to the effect that it may be just and equitable for nil compensation to be paid where land is expropriated in the public interest, having regard to all relevant circumstances, including if (i) the land on whichis not being used and the owner’s main purpose is not to develop the land or use it conducts operations. Once a mining rightto generate income, but to benefit from appreciation of its market value; (ii) an organ of state holds land that it is granted, the landowner has no right to refuse the conducting of mining operations on the property in questionnot using for its core functions and is not entitledreasonably likely to compensation from the mining right holder for the use ofrequire the land for mining operations conductedits future activities in that regard, and the organ of state acquired the land for no consideration; (iii) notwithstanding registration of ownership in terms of the MPRDA.Deeds Registries Act, No. 47 of 1937, an owner has abandoned the land by failing to exercise control over it;(iv) the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land; or (v) the nature or condition of the property poses a health, safety or physical risk to persons or other property. Public hearings on the Expropriation Bill have not yet been held.
National Environmental Management Act
The MPRDAA repealed the sections in the MPRDA providing for environmental regulation of mining and prospecting operations. This was the first step in migrating environmental regulation provisions from the MPRDA into National Environmental Management Act, No. 107 of 1998 (NEMA). NEMA was then amended by the National Environmental Management Amendment Act, No. 62 of 2008 and then again by the National Environmental Management Laws Amendment Act, No. 25 of 2014, and now includes provisions to deal with environmental regulation of mining and prospecting which provisions are administered by the MRE Minister. Pursuant to section 24N(8) of NEMA, directors of a company are jointly and severally liable for any negative impact on the environment, whether advertently or inadvertently caused by the company they represent, including damage, degradation and pollution. See also “Item 4B: Business Overview—Mine Site Rehabilitation and Closure” and “Item 4B: Business Overview—Environmental, Health and Safety Matters”.
48
From an environmental perspective, given the wide scope of the statutory duty of care in South African environmental law, erstwhile land owners may be held liable for historic contamination by the regulatory authorities. The duty of care primarily applies to persons responsible for or in control of the activity that caused the pollution, which includes erstwhile landowners and operators. The “polluter pays” principle in South Africa enables the competent authority to seek recourse against various responsible parties based on their historical or current relationship to the source and receptor of degradation or pollution. The duty of care also applies retrospectively to significant pollution or degradation that occurred before the entry into force of NEMA (i.e., 29 January 1999), as well as significant pollution or degradation that arises or is likely to arise at a different time from the actual activity that caused the contamination (e.g., latent or residual impact) or arises through an act or activity of a person that exacerbates pre-existing contamination. The authorities can also seek compensation in respect of clean-up measures that it is required to take on behalf of the responsible parties and apportion liability amongst the responsible parties, which could technically include a historic landowner or mining company that caused the pollution. Although the purchasers of AngloGold Ashanti’s assets in South Africa have contractually assumed all environmental liability associated with its former South African operations and agreed to indemnify AngloGold Ashanti for the same, there remains a risk, at least theoretically, of statutory liability to the state.
AFRICA REGION
Democratic Republic of the Congo (DRC)
General laws relating to mining
The mining industry in the Democratic Republic of the Congo (DRC)DRC is currently undergoing a reform as the Mining Code enacted inprimarily regulated by Law No. 007/2002 dated 11 July 2002 and which, until recently, was the primary regulation in the mining sector, was(2002 DRC Code), as amended by Law noNo. 18/001 as adopted ondated 29 January 2018 (Reformed DRC Mining Code) and Decree No. 038/2003 dated 26 March 2003, as enactedamended by Decree No. 18/024 dated 8 June 2018 (Reformed DRC Mining Regulations).
As regards the Presidentapplication of the Republic on 9 March 2018 (the Reformed Mining Code). The ReformedDRC Mining Code calls forand Reformed DRC Mining Regulations, Kibali Goldmines S.A. (Kibali) has reserved and continues reserving its rights, including, without limitation, its stability rights under, among other legal sources, the adoption2002 DRC Code. Discussions with the DRC government on these issues and the possible application of regulatory texts, includingincentives that may be available under the amendmentReformed DRC Mining Code and updateReformed DRC Mining Regulations are ongoing.
Companies holding mining titles issued prior to the entry into force of the Reformed DRC Mining Code and Reformed DRC Mining Regulations originally promulgated in March 2003have claims to support the 2002 Mining Code. These regulatory texts are being drafted and negotiations between major mining companies and the DRC Government are ongoing in their respect. In its current form, the Reformed Mining Code increases the title holders’ tax burden by widening the basis for and increasing the rate of the mining royalties’ rates (the royalty rate applicable to gold increased from two and one-half percent to three and one-half percent). The Reformed Mining Code also
The Reformed DRC Mining Code continues to vestgrants the DRC Minister of Mines with the authority to grant, refuse, suspend andor terminate mineral rights, although such authority issubject to be exercised upon conditions set out in the Reformed DRC Mining Code. Mineral rights may be granted in the form of exploration permits for an initial period of five years or in the form of mining permits which are granted for an initial period of 25 years. An exploration permit may, at any time before expiry, be transformed partially into a mining licencepermit or a small-scale mining permit. Mining permits are granted upon successful completion of exploration and satisfaction of certain requirements, including approval of a feasibility study, an environmental impact study and an environmental management plan. To protect and enforce rights acquired under an exploration or mining permit, the Reformed DRC Mining Code provides, depending on the nature of a dispute or threat, administrative, judicial and national or international arbitral recourses.
The holder of a mining permit is required to commence development and mine construction within three years of the award of such permit. Failure to do so may lead to forfeiture of the mining permit. A permit holder must comply with specific rules relating to, amongst others,other things, protection of the environment, cultural heritage, health and safety, construction and infrastructure planning. Mining and exploration activities are required to be undertaken so as to affect as little as possiblein a way that minimizes the impact on the interests of lawful occupants of land and surface rights holders, including their customary rights. The exercise of mineral rights by title holders which effectively deprives or interferes with the rights of occupants and surface rights holders requires payment of fair compensation by the mineral title holder.
Article 220 of the Reformed DRC Mining Code provides depending onthat the naturePrime Minister of the DRC may grant a dispute or threat, administrative, judicial and national or international arbitral recourses.number of incentives to provinces suffering from infrastructures deficits to encourage economic development from mining resources. Discussions are currently ongoing with the DRC government with respect to incentives that may be available under article 220 of the Reformed DRC Mining Code.
49
Tax laws relating to mining
The Reformed DRC Mining Code sets out taxes, charges,an exclusive and comprehensive tax and customs regime that is applicable to mining activities. Mining title holders are subject, amongst other things, to a corporate income tax of 30 percent, a windfall tax of 50 percent (subject to certain prerequisites) and are required to pay mining royalties and other fees payable to the treasury by a mining title holder in respect of its activities. It also provides for a level of fiscal stability, in that existing tax, customs and exchange control provisionsDRC government. The royalty rate applicable to the mining activitiesgold has been set at 3.5 percent. Mining title holders are guaranteedalso required to remain unchanged, forcontribute a periodminimum of 5 years from the enactment0.3 percent of the Reformed Mining Code.total turnover to community development.
On 18 July 2012, the Convention between the Governmentgovernment of the Republic of South Africa and the Governmentgovernment of the Democratic Republic of the CongoDRC for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (Convention) came into effect, andeffect. The Convention is applicable to:
to (i) withholding taxes on amounts paid or credited on or after 1 January 2013; and
(ii) other income taxes, levied in respect of taxable periods beginning on or after 1 January 2013.
The Convention reduces the withholding tax on dividends paid by companies resident in the DRC to companies resident in South Africa from 20 percent to five5 percent and on interest paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 10 percent. A South African company must own at least 25 percent of a relevant DRC entity’s outstanding shares in order to take advantage of the reduced rates.
Foreign exchange control regime
The Reformed DRC Mining Code imposed new exchange control rules requiring that mining title holders repatriate onshore 60 percent of sale revenues received during the investment amortization period and 100 percent once the investment amortization is completed. As a result of these new rules, we were not able to fully repatriate dividends from our DRC operations to date. During 2020, AngloGold Ashanti repatriated $140 million from its operations in the DRC in the form of dividends received from Kibali (Jersey) Limited. Our attributable share of the outstanding cash balances awaiting repatriation from the DRC amounted to $424 million as of 31 December 2020. Our joint venture partner, Barrick Gold Corporation, which operates the Kibali gold mine, continues to engage with the DRC government regarding the Reformed DRC Mining Code and the cash repatriation.
AngloGold Ashanti’s rights and permits
AngloGold Ashanti holds a significant stake in the Kibali gold projectmine which is located in the north-eastern part of the DRC. The project is operated by Randgold Resources andKibali gold mine is owned by Randgold ResourcesKibali Goldmines S.A. (Kibali) which is a joint venture between Barrick Gold Corporation (45 percent), AngloGold Ashanti (45 percent) and Société Minière de Kilo-Moto SAS.A. (SOKIMO) (10 percent), which latter share represents the interest of the DRC governmentgovernment. AngloGold Ashanti and Barrick Gold Corporation each have a 50 percent interest in theKibali (Jersey) Limited which holds our effective 45% interest in Kibali. The Kibali gold project.mine is operated by Barrick Gold Corporation.
The Kibali gold project comprises 10ten permits, 7 expiringof which seven expire in 2029 and 3three in 2030 and covering2030. Those permits cover an area of approximately 1,836 square kilometreskm2 in the Moto goldfields of the northeast DRC.goldfields.
Ghana
General laws relating to mining
Control of minerals and mining companies
The Constitution of Ghana as well as the Minerals and Mining Act, 2006 (Act 703) (GMM Act) provide that all minerals in Ghana in their natural state are the property of the State and title to them is vested in the President on behalf of and in trust for the people of Ghana, with rights of reconnaissance, prospecting, recovery and associated land usage being granted under licence or lease.
The grant of a mining lease by the Ghana Minister of Lands &and Natural Resources (MOLNR)(LNR Minister) upon the advice of the Minerals Commission is subject to parliamentary ratification unless the mining lease falls into a class of transactions exempted by the Ghanaian Parliament.
50
The Ghana MOLNRLNR Minister has the power to object to a person becoming or remaining a controller of a company which has been granted a mining lease if the LNR Minister believes, on reasonable grounds, that the public interest would be prejudiced by the person concerned becoming or remaining such a controller.
Except as otherwise provided in a specific mining lease, all immovable assets of the holder of a mining lease vest in the State upon termination, as does all moveable property that is fully depreciated for tax purposes. Moveable property that is not fully depreciated is to be offered to the State at the depreciated cost. A holder must exercise his rights subject to such limitations relating to surface rights as the LNR Minister may prescribe.
In 2019, Parliament passed the State Interests and Governance Authority Act, 2019 (Act 990) establishing the State Interests and Governance Authority (SIGA). The functions of SIGA include the oversight and administration of the State’s interests in state-owned enterprises, joint venture companies and other entities in which the State has an interest. This applies to mining companies on account of the Government’s mandatory free-carried equity interest in mining companies as provided for under the GMM Act. However, the Government of Ghana does not have a free-carried interest in any of AngloGold Ashanti’s mines in Ghana.
Stability agreementand development agreements
The GMM Act provides for stability agreements as a mechanism to guarantee certain terms and conditions, mainly fiscal, to which a company’s operations are subject for a period of 15 years. Stability agreements are subject to ratification by Parliament. A development agreement, as provided for by the GMM Act, may be made available to a mineral right holder with a proposed investment exceeding USD 500 million. The GMM Act also provides that the terms of a development agreement may contain stability terms as provided for in stability agreements. A development agreement is subject to parliamentary ratification.
Ghana Stability Agreement
In 2004, AngloGold Limited and the Government of Ghana agreed on the terms ofsigned a stability agreement (Ghana Stability Agreement) to governgoverning certain aspects of the fiscal and regulatory framework under which AngloGold Ashantithe company would operate in Ghana for a period of 15 years following the implementation of the business combination. The Ghana Stability Agreement necessitated the amendment of the Obuasi mining lease which had been ratified by Parliament.
combination between AngloGold Limited and Ashanti Goldfields Company Limited. Under the Ghana Stability Agreement, the Government of Ghana agreed:
agreed, among other matters, to extend the term of the mining lease relating to the Obuasi mine until 2054 on terms existing prior to the business combination;combination.
In June 2018, the Ghana Stability Agreement ceased to maintain,apply to the Obuasi mine as a result of the parliamentary ratification of a new development agreement and a new tax concession agreement in relation to the mine (as described below). However, the Ghana Stability Agreement continued to apply to the Iduapriem mine until it expired in April 2019. Since then, AngloGold Ashanti (Iduapriem) Limited (AGA Iduapriem) no longer benefits from the Ghana Stability Agreement. Relevant engagements are currently ongoing between AGA Iduapriem and the Minerals Commission to obtain a new agreement for the Iduapriem mine.
Obuasi Development Agreement
AngloGold Ashanti (Ghana) Limited (AGA Ghana) negotiated a new development agreement in relation to the Obuasi mine (Obuasi DA) with the Government of Ghana. On 21 June 2018, Parliament ratified the Obuasi DA which contains stability terms as provided for in stability agreements.
The Obuasi DA confers the following rights and obligations on AGA Ghana with respect to the Obuasi mine:
•Stabilization of the fiscal and regulatory framework (except for enactments promoting the use of Ghanaian goods and services) for a period of 1510 years the royalties payable by AngloGold Ashanti with respecta potential of it being extended for five years;
•Confirmation of accounting currency to its mining operations in Ghana at a rate of 3 percent per annum of the total revenue from minerals obtained by AngloGold Ashanti from such mining operations;be US dollars;
•Right to ensure the income tax rate would be 30 percent for a period of 15 years. The agreement was amended in December 2006 to make the tax rate equal to the prevailing corporate rate for listed companies if the rate was less than 30 percent; and
•Obligation to set up a “Community Trust Fund” for Obuasi funded at $2 per ounce produced;
•Obligation to give preference to materials and goods made in Ghana to guarantee the availability of such foreign currency.
•Obligation to the Government’s approval. Furthermore, the Government retains its special rights (Golden Share) under the provisionsgive preference to Ghanaian skills where they are available;
•Obligation to employ high standards of the GMM Act pertainingsafety; and
•Right to the controlpeaceful enjoyment and protection against expropriation.
51
The fiscal terms which will ordinarily form part of a single stabilisation document were separated from the Obuasi DA. Hence a separate tax concession agreement in relation to the Obuasi Minemine (Obuasi TCA) was signed with government. These agreements, which govern the redevelopmentGovernment. On 21 June 2018, Parliament ratified the Obuasi TCA with a concession period until 31 December 2027.
The key terms of the Obuasi Mine,TCA are as follows:
•Corporate Income Tax to be 32.5 percent or such lower rates as may be fixed by law (current statutory rate is 35 percent);
•Unutilised capital allowances carried forward by AGA Ghana which relate to the period before the effective date of the Obuasi TCA which have not yet received parliamentary approval. Once approved,already been utilised for the current Stability Agreementpurposes of calculating taxable income shall continue to be carried forward until 31 December 2020;
•For the concession period, existing tax losses and new tax losses as well as a special concession to carry forward capital allowances to be converted into tax losses as at the end of 2020, will cease to apply to AGA Ghana (whoever is the owner of AGA Ghana and whether or not AGA Ghana was to enter into a joint venture in respect of the Obuasi Mine but will continue to apply tomine);
•Until 31 December 2021, exemptions of certain items from Import Duty;
•For the Iduapriem Mine until it expiresconcession period, exemption of the following transactions from Capital Gains Tax:
•an issue of shares by a publicly listed company which holds a direct or indirect interest in April 2019.
•transfers of shares in any publicly listed company which holds a permanent nature useddirect or indirect interest in mineral and petroleum exploration and production and plant and machinery usedAGA Ghana other than a transfer of shares which results in mining and petroleum operations) that provides for a 20 percent straight line rate for a period of five years. Pursuant to the Ghana Stability Agreement, this change will not affect AngloGold Ashanti until 2019.
•a reorganization of assets acquireda company which holds a direct or indirect interest in AGA Ghana where following the reorganization the shareholders are substantially similar to those shareholders of the ultimate parent entity immediately prior to the transaction;
•For the concession period, non-application of section 62(1) of the Income Tax Act, 2015 (Act 896) in relation to change in underlying ownership under the following circumstances:
•a joint venture in relation to Obuasi gold mine;
•an issue of shares by a publicly listed company which holds a direct or indirect interest in AGA Ghana in connection with a raising of finance, an acquisition or a reorganization or an issue of shares by a company in connection with a new listing;
•transfers of shares in any publicly listed company which holds a direct or indirect interest in AGA Ghana other than a transfer of shares which results in a third party holding more than 50 percent of the shares in the listed company; and qualified
•a reorganization of a company which holds a direct or indirect interest in AGA Ghana where following the reorganization the shareholders are substantially similar to those shareholders of the ultimate parent entity immediately prior to the transaction;
•For the concession period, sliding scale royalty rate ranging from 3 percent to 5 percent for a price ranging from $1,300 up to $2,000 and above per ounce instead of the current flat rate of 5 percent;
•Exemption from the payment of VAT on items imported under the Import Duty List up to 31 December 2023; and
•Entitlement to a refund of VAT credit at the pre-production stage notwithstanding that AGA Ghana will not meet certain conditions for qualifying for refunds.
Corporate regulation
Parliament passed the new Companies Act, 2019 (Act 992) which repeals the Companies Act, 1963 (Act 179). Act 992 introduced amendments to the regulation of companies in Ghana and establishes the Office of the Registrar of Companies as an autonomous office. As a general matter, Act 992 maintained the provisions of Act 179. It, however, introduces stricter requirements for persons who are to be classifiedappointed as class 3 assetsdirectors of a company as well as for company secretaries. Companies are also required to appoint new external auditors every six years. Recent directives impose that, in case of rotation of auditors, a mandatory cooling-off period of at least six years should be observed. To ensure a smooth transition, companies are required to effect this change at their next scheduled annual general meeting, but no later than 1 August 2022.
A company is also not required to have bylaws or “regulations” as was the purposecase under Act 179. Instead, a company may opt to have a registered constitution. Nevertheless , it is expected that the current regulations for AGA Ghana and AGA Iduapriem will be redrafted and filed at the Companies Registry. Further, a company is not required to have specific objectives as prescribed under Act 179. The implication of granting capital allowances. Capital allowancethis change is now 20 percent each year onthat a company can carry out any type of business unless otherwise specifically stated in the total valuecompany’s constitution.
52
Government’s Golden Share
Section 60(1) of the assets. Pursuant to the Ghana Stability Agreement, this change will not affect AngloGold Ashanti until 2019.
The following matters require, and will not be effective without, the written consent of the holder of the Golden Share:
•any amendment to or removal of the relevant provisions of the AGA Ghana Regulations setting out the rights and restrictions attaching to the Golden Share;
•the voluntary winding-up or voluntary liquidation of AGA Ghana;
•the redemption of or purchase by AGA Ghana of the Golden Share;
•the disposal of any mining lease held by AGA Ghana or any subsidiary of AGA Ghana; and
•any disposal by AGA Ghana (other than any disposal in the ordinary course of business of AGA Ghana) which, alone or when aggregated with any disposal or disposals forming part of, or connected with, the same or a connected transaction, constitutes a disposal of the whole or a material part of the assets of the AGA Ghana group taken as a whole.
Upon a return of assets in a winding-up or liquidation of AngloGold Ashanti (Ghana) Limited,AGA Ghana, the holder of the Golden Share is entitled to the sum of 0.10 cedisone Ghanaian cedi (GHS 1.0) in priority to any payment to other members, but the Golden Share confers no further right to participate in the profits or assets of AngloGold Ashanti.AGA Ghana . The Golden Share carries no right to any dividend or any right to participate in any offer of securities to existing shareholders or in any capitalisation issue.
The holder of the Golden Share is entitled to attend any general meeting of the members or any separate meeting of the holders of any class of shares. Furthermore, the holder of the Golden Share may require AngloGold Ashanti (Ghana) LimitedAGA Ghana to redeem the Golden Share at any time in consideration of the payment to such holder of 0.10 cedis.one Ghanaian cedi (GHS 1.0).
Currently, the Parliament ofmain tax laws in Ghana (Parliament) passed an amendment toinclude the Internal Revenue Act, 2000 (Act 592) known as the Internal Revenue (Amendment) (No. 2) Act 2013, (Act 871). This, amongst other changes, increased the withholding tax for goodsfollowing acts and services supplied by non-residents, payments to non-resident individuals and payment for management and technical services from 15 percent to 20 percent. A new Value Addedregulations:
•Income Tax Act, (VAT) 20132015 (Act 870) imposes a 15 percent VAT payable on goods896) (as amended) and services. The National Health InsuranceIncome Tax Regulations, 2016 (L.I. 2244);
•Customs Act, 20122015 (Act 852) also imposes a two891) (as amended) and one-half percent VAT payable on goods and services. The total VAT payable on goods and services is therefore 17.5 percent. The Customs Regulations, 2016 (L.I. 2248);
•Value Added Tax, 2013 (Act 870) extended the coverage of the tax to some business activities which were hitherto outside the tax net. These included the supply of financial services that are rendered for a fee, commission or a similar charge(as amended) and the manufacture or supply of pharmaceuticals. The implementation of the charging of VAT in relation to these two services has however been suspended until further notice. These taxes do not have an adverse effect on the Company since they do not directly impact its operations.
•Revenue Administration Act, 2016 (Act 915).
Various amendments have been made to these tax laws over the years. For example, recently, the Revenue Administration (Amendment) Act, 2017,2020 (Act 948) was passed1029) amended the Revenue Administration Act, 2016 (Act 915) to amendestablish an Independent Tax Appeals Board to hear and determine appeals against tax decisions made by the Commissioner-General.
VAT
The provision of goods and services is liable to Value Added Tax 2013, (Act 870). The Amendment, among other changes, classifies the supply(VAT) at a revised rate of financial services12.5 percent. In addition, there are separate levies, including a 2.5 percent National Health Insurance Levy and gives legal backing to a three2.5 percent VAT Flat Rate Scheme (FRS).Ghana Education Trust Fund Levy.
Income taxes
In November 2015, Parliament passed the Income Tax Act, 2015 (Act 896) (ITA) which repealed the Internal Revenue Act, 2000 (Act 592), as amended. The ITAamended, and became effective from 1 January 2016 for the 2016 year of assessment.2016. The ITA ring fences and taxes income derived from mining operations at the rate of 35 percent. For the purpose of ascertaining the income of a person for taxation (including capital gains), each separate mineral operation is treated as an independent business and taxed accordingly.accordingly, preventing mining businesses from deducting or setting off costs from one mining area with another’s income. The Obuasi TCA for AGA Ghana provides for a stabilised income tax rate of 32.5 percent. Pursuant to section 2.06 of the Ghana Stability Agreement, the ring fencing provision willITA did not apply to AngloGold AshantiAGA Iduapriem until 2019 and until then the company’sApril 2019. Following its expiration, AGA Iduapriem currently pays income tax exposure will not exceed 30 percent.
The Fees and Charges (Amendment) Instrument, 2015 (L.I. 2208) was passed by Parliament on 23 December 2015 and fixed, among other things, the ITA as follows:payment of ground rent by mining companies at GHS 15 cedis per acre per annum.
53
AGA Ghana is paying $670 (GHS 3,705 cedis) per km2 per annum for all the AGA Ghana leases. The Obuasi DA protects AGA Ghana from any increase in ground rent for the duration of that development agreement. AGA Iduapriem is also paying $670 (GHS 3,705 cedis) per km2 per annum for all the AGA Iduapriem leases.
Royalties
Under the Minerals and Mining (Amendment) Act, 2015 (Act 902)900), the Minister will prescribe the royalty rate payable and the manner of payment by passing a Legislative Instrument or other subsidiary legislation. The current royalty rate amounts to 5 percent.
The company is required to pay ground rent to the Government of Ghana (as described above) as well as such other fees as are prescribed by legislation, including royalties on timber felled within the lease area.
Minerals Income Investment Fund
The Minerals Income Investment Fund Act, 2018 (Act 978), which was amended by the Minerals Income Investment Fund (Amendment) Act, 2020 (Act 1024), establishes a fund to receive mineral royalties and related income from mineral rights holders and also provides new tax ratesfor the disbursement and management of such royalties and related income. The Minerals Income Investment Fund also acts as a special purpose vehicle holding the Ghanaian Government’s carried interests in mining companies. No additional burdens are imposed on mining companies as the effect of this legislation is merely to substitute the legal person holding the Government’s carried interests.
Environmental laws relating to mining
In general, environmental laws and regulations in Ghana derive from the Constitution which imposes a duty on both the State and others to take appropriate measures to protect and safeguard the natural environment. Mining companies are required, under the GMM Act, Environmental Assessment Regulations, 1999 (L.I. 1652) and Water Use Regulations, 2001 (L.I. 1692), to obtain all necessary approvals from the Environmental Protection Agency (Ghana EPA), a regulatory body established under the Environmental Protection Agency Act, 1994 (Act 490), and, in appropriate cases, the Water Resources Commission and/or the Ghanaian Minerals Commission before undertaking mining operations. The Minerals and Mining (Health, Safety and Technical) Regulations, 2012 (L.I. 2182) also impose further obligations to obtain the necessary permits from the Inspectorate Division of the Ghana Minerals Commission for the operation of mines. The GMM Act also requires that mining operations in Ghana comply with all laws for the protection of the environment. Compliance with the relevant laws are enforced by a regime of sanctions, including imposition of fines and in some cases a term of imprisonment.
As part of the Ghanaian environmental laws and regulations, mining operations are required to undergo an environmental impact assessment process to obtain an environmental permit prior to commencing operations. Environmental Management Plans must be submitted to the Ghana EPA within 18 months after issuance of the environmental permit and then every three years thereafter. The plan must include details of the likely impacts of mining operations on the chargeable income of resident individualsenvironment and local communities, as well as a comprehensive plan and timetable for a year of assessment, introduces a 15 percent withholding tax rate applicableactions to service fees with a source in Ghana to resident individuals for services other than those expressly provided for under Act 902mitigate and increases the monetary threshold for an individual to whom a presumptive tax applies. Presumptive tax payable on turnover is now three percentremediate any adverse effects of the business where the turnover is more than GHS 20,000 but does not exceed GHS 200,000 (insteadmining operations. Approval of the initial presumptive taxmanagement plan results in the issuance of three percent payable wherean environmental certificate.
In June 2014, the turnover was more than GHS 20,000 but did not exceed GHS 120,000);Ghana EPA and
Illegal and dividends paid to an investor in an approved unit trust scheme or mutual fund, and also reduces withholding tax on service fees payable by a resident person, other than an individual, to another resident person from 15 percent to seven and one-half percent.unsustainable mining practices
The Income Tax Regulations L.I. 2244 pursuantMultilateral Mining Integrated Project (MMIP) is a 5-year project launched by the Government of Ghana in 2017 to address illegal and unsustainable mining practices in Ghana. The MMIP “combines a Legislation, Enforcement, Civil, Integrated and Technological Approach (LECITA) as a sustainable and structured yet regimented conjoint concept” to combat illegal mining. The MMIP involves (i) reviewing and enforcing the provisionslegal and regulatory regime of the ITA was also introducedsmall scale mining sector, (ii) reclaiming and rehabilitating degraded lands, (iii) dredging silted estuaries and waterways, (iv) implementing social interventions to reducefacilitate livelihood creation in mining communities, (v) adapting technology to increase mining efficiency, processing, environmental protection and monitoring activities, and (vi) building the income tax imposed on the wagescapacity of casualartisanal and temporary workers from the previous rate of sevensmall-scale miners and one-half percent to 15 percent to a fixed rate of five percent. The rate of tax imposed on the chargeable income of a non-resident temporary worker is 20 percent. A resident temporary worker’s chargeable income is taxed as follows: the first GHS 2,592 is exempt from tax, the next GHS 1,296 is subject to five percent tax, the next GHS 1,812 is subject to 10 percent tax, the next GHS 33,180 is subject to 17.5 percent tax and any amount exceeding GHS 38,880 is subject to 25 percent tax.regulatory institutions.
54
Foreign exchange, export and importers of stamping machines for the implementation of the excise tax stamp policy and also exempts from tax for five years, the income of an entrepreneur (who is not more than 35 years old) from the business of manufacturing, information and communications technology, agro processing, energy production, waste processing, tourism and creative arts, horticulture and medicinal plants.other rules
Retention of foreign earnings
AngloGold Ashanti’s operations in Ghana are permitted to retain 80 percent of their foreign exchange earnings in an offshore foreign exchange account. In addition, the company has permission from the Bank of Ghana to retain and use US dollars, outside of Ghana, to fulfillfulfil payment obligations to the company’s hedge counterparties which cannot be met from the cash resources of its treasury company.
On 4 February 2014, the Bank of Ghana issued new directives as part of measures to streamline the collection and repatriation of export proceeds to Ghana. These directives included an instruction to all banks and authorised dealers to, within five5 working days of receipt of export proceeds, convert the proceeds into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 percentage in points (pips). Exporters with retention accounts were to continue to operate these accounts in accordance with their retention agreements. Retention proceeds which were sold to the banks were to be converted into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 pips. It further advised that offshore foreign exchange transactions by resident companies, including exporters, were strictly prohibited and exporters were to ensure that all export proceeds are repatriated in full. Failure to comply with the provisions attracts penalties including pecuniary sanctions, jail terms, suspension and revocation of the operating licence as applicable.
Following engagement with relevant stakeholders, the Bank of Ghana issued another notice clarifying that the transfer of foreign exchange to meet external payment obligations remains permissible for transactions such as:
•redemptions and coupon payments on Bondsbonds held by non-residents;
•investment income, technology and management transfer entitlements, expatriate emoluments, and other incentive packages and overseas commitments under provisions in various legislation and legislative instruments such as the GMM Act, and the Technology Transfer Regulations, ( L.I.1547 );1992 (L.I.1547); and
•other outward payments for imports of goods and services.
The notice also stated that all balances in Foreign Currency Accounts (FCAs) and Foreign Exchange Accounts (FEAs) will continue to be held in foreign currency and will not be converted into Ghana Cedis.cedis. External transfers of up to $10,000 per annum without documentation from FEA and FCA are still permitted. Balances held in FEAs and FCAs continue to remain available for all legitimate external transactions.
The Bank of Ghana on 9 August 2014 further revised the rules on foreign exchange operations, effectively reversing the initial directives controlling transactions in foreign exchange. The key details are as follows:
•Exporters shall continue to repatriate in full export proceeds in accordance with the terms agreed between the trading parties. Such proceeds shall be credited to their FEAs and converted on a need basis.basis;
•FEAs and FCAs will continue to be opened and operated as they were before the Noticesnotices of 4 February 4, 2014.2014;
•Except for transfers from FEA to FCA which are still prohibited, all other transfers between accounts are permitted.permitted;
•FEAs shall be fed with foreign exchange generated from activities in Ghana such as proceeds from exports of doubt:goods and services; and
•The threshold for transfers abroad without initial documentation remains at $50,000.00. Where documentation in respect of a transfer remains outstanding, any subsequent import transaction
Existing measures that were not amended by an importer, irrespective of value, shall only be made on prior provision of documentation required for the current import transaction.
force. The Bank of Ghana reiterated that the Ghana cedi remains the sole legal tender in Ghana. Therefore, pricing, advertising, invoicing, receiving, and making payments for goods and services should be done in Ghana cedis, unless otherwise authorizedauthorised by the Bank of Ghana.
The Bank of Ghana introduced new measures to regulate and monitor the export of gold and diamonds from Ghana in 2015. From 15 September 2015, all exports of gold and diamonds must be carried out through the Precious Minerals Marketing Company Ltd (PMMC), except where the exporter is the holder of a licence that werepermits it to export directly. The Ghana Revenue Authority (Customs Division) only permits gold to be exported by a licensed gold exporter who has a completed Form FEX A4 bearing Bank of Ghana’s embossment. The export measures do not amended by this Notice continueapply to remain in force.
AngloGold Ashanti maintainsbecause the company holds a licence granted by the LNR Minister to sell and operatesexport its FCA, FEAproduction.
The Bank of Ghana issued a notice (Notice No. BG/GOV/SEC/2016/02) which, among other things, allows mining companies to sell the portion of foreign exchange receipts from export that was earmarked for surrender to the Bank of Ghana directly to the commercial banks.
In November 2016, the Ministry of Lands and Retention AccountsNatural Resources issued a ministerial directive appointing the PMMC as designated laboratory for assaying in compliance withGhana. The directive requests all persons holding export licenses for gold to submit all gold
55
to be exported to the directives.PMMC for assay before export. Mining businesses, including AngloGold Ashanti, acting through the Ghana Chamber of Mines were opposed to this directive due to its potential negative impact on mining companies in the region. As a result, the Chamber initiated proceedings to reverse or modify the directive. Following discussions in respect of the mining industry’s concerns, the Chamber and Government agreed on the modalities for implementing the national assaying policy and it was introduced in February 2018 following a one-month pilot among certain mining companies. A final document for the implementation of the program will be executed once the Chamber and the PMMC address a few outstanding issues regarding assaying methodologies.
Localisation and local participation policy
Mining companies must submit a detailed programme for the recruitment and training of Ghanaians with a view to achieving “localisation”, which is the replacement of expatriate personnel in a company’s Ghanaian operations by Ghanaian personnel. In addition, mining companies must give preference to Ghanaian products and personnel, to the maximum extent possible, consistent with safety, efficiency and economies. Recently passedThe Minerals and Mining (General) Regulations, 2012 (L.I. 2173) give further details on the localisation policy.
mining industry. The Minerals Commission issuedis tasked to publish a directivelocal procurement list of goods and services that must have Ghanaian content. Mining companies must also submit a five-year procurement plan to allthe Minerals Commission. Technical and engineering services generally must be provided by Ghanaian-owned companies subject to limited exceptions. Only the services of financial institutions incorporated in Ghana are to be procured and not less than 25 percent of transactions are required to be undertaken with financial institutions owned by Ghanaian citizens. Other services such as haulage, security, contract mining companiesservices for small-scale mining operations and supply of fuel are required to be provided by Ghanaians. Furthermore, if the planned capital expenditures of a holder of a mineral right exceeds certain limits set by the LNR Minister, it is required to list at least 20 percent of its equity on the Ghana Stock Exchange within five years after commencement of mining operations. In addition, there are also restrictions on the number of expatriates that can be employed by mineral rights holders and mine support service providers in a bid to notifyenhance the Commissionparticipation of all expatriate visitorsGhanaians in the mining industry.
Imposition of restrictions
In March 2020, the Imposition of Restrictions Act, 2020 (Act 1012) was enacted to mine sites pursuant to the Minerals and Mining (General) Regulations 2012 (LI 2173) and the Minerals and Mining (Support Services) Regulations 2012 (LI 2174).
Obuasi
The current mining lease for the Obuasi area was granted by the Government of Ghana on 5 March 1994. It grants mining concessions to land with an area of approximately 338 square kilometreskm2 in the Amansie East and Adansi West districts of the Ashanti region for a term of 30 years from the date of the agreement. In addition, a mining lease over an adjacent 140 square kilometreskm2 was also granted, resulting in the total area under the mining lease increasing to 474 square kilometres.
km2. The Government of Ghana agreed to extend the term of the mining lease relating to the Obuasi mine until 2054. The mining lease was formally ratified by Parliament on 23 October 2008.
On 3 March 2016, the Minerals Commission approved AngloGold AshantiAGA Ghana’s application to surrender approximately 273.54 square kilometreskm2 of the area to the Government of Ghana, reducing the lease areas to 201.46 square kilometres.km2. The remaining parcel of land that will be subject to the mining lease is situated within various villages and townships in the region but excludes the municipality of Obuasi. On 15 January 2021, the Minerals Commission approved AGA Ghana’s application to relinquish a further 60.24 km2 of lease area, thereby reducing the lease areas to 141.22 km2, in order to avoid encroachment and illegal mining activities within the mine’s footprint while maintaining its social license to operate.
AGA Ghana is not required to pay annual mineral right fees as the AGA Ghana leases were granted prior to the enactment of the GMM Act which imposes such fees. The GMM Act provides that leases granted under laws subsisting immediately before the coming into force of the GMM Act shall continue to be governed by such pre-existing laws. As a result, the AGA Ghana leases are still regulated by the Minerals and Mining Law, 1986 (PNDCL 153), as amended (notwithstanding the repeal of PNDCL 153 by the GMM Act).
Iduapriem
The Iduapriem has titlemine operates under four different mining leases: the Iduapriem Mining Lease (36.47 km2), the Ajopa Mining Lease (46.12 km2), the Teberebie Mining Lease (28.53 km2) and the Ajopa South Mining Lease (28.10 km2). Prior to a 31 square kilometreall four mining lease granted on 19 April 1989leases expiring in 2018 and 2019, AGA Iduapriem submitted all relevant documents to apply for renewal of the leases. On 17 February 2020, the mining leases were extended for a further period of 30 years. In January 2009 Iduapriem obtained a new mining lease,15 years and will now expire in 2035. The Ajopa Mining Lease and the Ajopa Concession, for a periodSouth Mining Lease were ratified by the Ghanaian Parliament on 15 July 2020. The Iduapriem Mining Lease and the Teberebie Mining Lease were both ratified on 22 December 2020.
56
AGA Iduapriem is required to pay an areaannual mineral right fee of 48.34 square kilometres. In December 2011$178,000 with respect to the Minister of LandsIduapriem Mining Lease, $136,000 with respect to the Teberebie Mining Lease, $134,000 with respect to the Ajopa South Mining Lease and Natural Resources gave his consent for Teberebie’s title$220,000 with respect to a 25.83 square kilometre mining lease, granted in June 1992 for a period of 30 years, to be assigned to Iduapriem. While ownership of the lease has passed to Iduapriem, the registration of the transfer of the lease is still in process.Ajopa Mining lease.
Guinea
General laws relating to mining
In Guinea, all mineral substances are the property of the State. Mining activities are regulated by lawLaw L/2011/006/CNT dated 9 September 2011 as amended by lawLaw L/2013/053/CNT dated 8 April 2013 and promulgated by decreeDecree D/2013/075/PRG/SGG dated 17 April 2013 (together, the Guinea Mining Code).
The Guinea Mining Code is accompanied and implemented by various implementation decrees. To date, various decrees have been adopted,and orders, including decreeDecree D/2014/015/PRG/SGG adopting a model of mining convention, dated 17 January 2014, orderOrder A/2016/1584/MMG/SGG related to the administration’s capacities for the management of integrated mining projects (PARCA-GPI) and its steering committee, dated 6 June 2016, decreeDecree D/2016/163/PRG/SGG on the national agency for the development of mining infrastructures (ANAIM), dated 13 June 2016, and decreeDecree D/2016/215/PRG/SRG on the appointment of executives to the Ministry of Mines and Geology, dated 8 July 2016.
In 2017, Decree D/2017/285/PRG/SGG was adopted, which sets forth the modalities regardingconditions for the constitution and management of the Local Development Fund (Fodel), as well as Joint Order A/2017/6326/MMG/MATD/SGG, which sets forth the conditions for the use, management and control of the Fodel. Together, these set forth the use of the mining companies’ financial contribution to the development of the local communities and the rules applying to the Local Development Fund (Fodel)Fodel, which was created under the Guinea Mining Code have been enacted through the adoption of decree D/2017/285/PRG/SGG setting the conditions for the constitution and management of the Fodel, dated 31 October 2017 and the joint order A/2017/6326/MMG/MATD/SGG setting out the conditions for the use, management and control of the Fodel, dated 22 November 2017. Also, a joint orderCode. In addition, Joint Order AC/2017/3228/MATD/MMG/SGG, updatingissued by the Ministry of Territorial Administration and Decentralisation and the Ministry of Mines and Geology and dated 21 July 2017, updates the act on the establishment, attribution and functioning of the coordination committees in mining communities (CCLMS), dated 21 July 2017 has been issued by the Ministry of Territorial Administration and Decentralisation and the Ministry of Mines and Geology.. The main purpose of the CCLMs, in which all concerned mining companies are represented, beingis to prevent and settle disputes that may arise in mining communities. On 13 July 2018, a Joint Order A/2018/5212/MEF/MMG/MB/MATD/SGG was issued, which regulates the use, management and monitoring of the resources allocated to local authorities pursuant to article 165 of the Guinea Mining Code. In 2019, an inter-ministerial committee was created to supervise and control the Fodel through the adoption of Joint Order AC/2019/089/MMG/MATD/SGG setting out the conditions for the constitution, powers and management of said inter-ministerial committee.
On 16 June 2020, a new procedure for the export of gold by mining companies was enacted through the adoption of Decree D/2020/113/PRG/SGG, which sets out, amongst other things: (i) when the industrial production tax referred to in article 161-1 of the Guinea Mining Code shall be paid, and (ii) the process to be followed to export gold bullion.
AngloGold Ashanti’s rights and permits
The right to undertake mining operations in Guinea can only be acquiredobtained by virtue of one of the following mining titles: surveying permit, small-scale mining licence, exploration licence, mining licence or mining concession.
The group’s GuineaGuinean subsidiary, Société AngloGold Ashanti de Guinée SAS.A. (SAG), has title to the Siguiri mine in the form of a mining concession, granted by virtue of Presidential Decree D/97/171/PRG/SGG, dated 4 August 1997, for a period of 25 years (the Mining(Mining Concession). The Mining Concession was originally covered by a mining convention entered into with the Republic of Guinea on 11 Novemberin 1993 (the Convention de Base) and amended in 2005. The Convention de Base provided for an initial duration of 25 years and would have expired in 2018.
On 28 June 2016, SAG and the Government of Guinea concluded a revised and consolidated mining convention de base (the Revised(Revised Convention de Base) which encompasses a renewal of the term of the original Convention de Basemining convention and other amendmentamendments necessary to support an expansion project proposed to extend the life of the Siguiri mine (the Expansion).
In compliance with the provisions of the Guinea Mining Code, the Revised Convention de Base was ratified by the Guinean National Assembly (law(Law L/2016/N°067/AN dated 30 December 2016, promulgated by decreeDecree D/2017/015/PRG/SGG dated 24 January 2017), submitted to the Guinean Supreme Court which rendered a favourable opinion (judgment(Judgement N°AC 005 dated 16 January 2017), and ratified by the President of the Republic (decreeof Guinea (Decree D/2017/021/PRG/SGG dated 24 January 2017).
Key elements of the Revised Convention de Base include the following:
•a duration of 25 years, expiring 23 January 2042, subject to further renewal if mining operations continue at that time; and withcontinue; the term of the Mining Concession beingis aligned with the term of the Revised Convention de Base such that the Mining Concession will be renewed as long as the Revised Convention de Base remains in force;
•SAG’s operations remain governed by the 1995 Guinea Mining Code (the prior mining code) and are only subject to the provisions of the Guinea Mining Code to the extent they are expressly set out in the Revised Convention de Base;
•the stability of the customs and tax regime is guaranteed for the entire initial term of the Revised Convention de Base, and subject to certain conditionconditions being met, any renewal period(s);
•the Republic of Guinea holds a 15 percent free-carried/non-contributory interest;
•the Republic of Guinea is entitled to a royalty on gold of five5 percent based on a spot gold price as per LBMA fixing (PM) up until the date of steady state commercial production of the first phase of the Expansion, after which the royalty rate applicable to gold will vary depending on threshold prices as per LBMA fixing (PM), namely: three3 percent if the gold price is USD 1,300 or less, five5 percent, if above USD 1,300 and up to USD 2,000 and seven7 percent if above USD 2,000;
57
•SAG will enjoy a 5 yearbenefits from 5-year income tax holiday as and from the beginning of steady state commercial production of the first phase of the Expansion, after which the income tax rate is set at 30 percent;
•a local development tax of 0.4 percent is payable on the sale price for gold and silver received by SAG up until 31 December 2027, after which it will be increased to 0.6 percent;
•salaries of expatriate employees are subject to a 10 percent income tax;
•goods imported into Guinea for purposes related to the construction and commissioning of the first phase of the Expansion are exempt from all customs taxes and duties; and
•SAG is committed to adopting and progressively implementing a plan for the effective rehabilitation of the mining areas disturbed or affected by its operations.
The Mining Concession covers an area divided into four blocks and totallingtotaling approximately 1,495 square kilometres.km2. SAG has the exclusive right to explore and mine in any part of the concession area for the duration of the period of the Revised Convention de Base. The Revised Convention de Base also grants SAG with the option to secure certain land rights over additional areas currently covered by exploration permits, but to which SAG may need access for purposes of establishing roads or storage of tailings.
The Revised Convention de Base is subject to early termination if the parties formally and expressly agree to it, if the last of the mining title held by SAG expires or is relinquished without any renewal application having been filed, if all project activities are voluntarily suspended for a continuous period of twelve12 months or are permanently abandoned by SAG;SAG, or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction.
Mali
The mining industry in Mali are governedis primarily regulated by law n°2010-015Ordinance No. 2019-022/P-RM dated 27 February 2012 bearing Malian Mining Code (New Mining Code), replacing ordinance No. 99-32/P-RM of 19 August 1999 enactingSeptember 2019 containing the previousnew mining code as amended by ordinance n°013/2000/P-RM of 10 February 2000 and ratified by law n°00-011the Republic of 30 May 2000 (1999Mali (2019 Mali Mining Code), and Decree No. 99-255/P-RM of 15 September 19992020-0177/PT-RM dated 12 November 2020 implementing the 2019 Mali Mining Code. On 8 December 2020, Decree No. 2020-0288/PM-RM enacted the new model mining convention referred to in Decree No. 2020-0177/PT-RM.
A large scale permit must provide proof of technical and financial capabilities.
the applicant, a feasibility study, a detailed environmental study in respect of the impact of the project on the environment, an environmental permit, a closure and rehabilitation plan as well as a community development plan. The large scale exploitation permit is granted by decree of the Head of Government. As soon as the large scale exploitation permit is granted, the permit holder must incorporate a company under the lawlaws of Mali. The permit holder will assign the large scale exploitation permit for free to this company. The State will have a 10 percent free carriedfree-carried interest in the company. This interest will be converted into priority shares and the State’s participation will not be diluted in case of an increase in capital. In addition, the company is required to ensure that private Malian investors are offered the possibility to acquire 5 percent of their capital.
All mining titles mentioned above (save for the exploration authorisation) require an establishment convention (convention d’établissement) to be signed by the State and the titleholder defining their rights and obligations. A standard formobligations, the duration of such establishment convention has been approved by decreewhich is 20 years.
58
AngloGold Ashanti’s rights and permits
Historically, AngloGold Ashanti hashad interests in the Morila, Sadiola and Yatela gold mines, all of which arewere governed by establishment conventions covering exploration, mining, treatment and marketing in a comprehensive document. These documents include general provisions regarding exploration (work programme, fiscal and customs framework) and exploitation (formation of a local limited liability mining company, State interest, fiscal and customs framework governing construction and exploitation phases, exchange controls, marketing of the product, accounting regime, training programmes for local labour, protection of the environment, reclamation, safety, hygiene and dispute settlement).
AngloGold Ashanti has compliedtogether with all applicable requirements andits joint venture partner Barrick Gold Corporation completed the relevant permits have been issued (subjectsale of their entire interests in Société des Mines de Morila S.A., the company operating the Morila gold mine in Mali, to Firefinch Limited (previously named Mali Lithium Limited) on 10 November 2020. At the developments regardingtime of the permit forsale, mining of ore had ceased at the Morila gold mine.
AngloGold Ashanti together with its joint venture partner IAMGOLD Corporation completed the sale of their entire interests in Société d’Exploitation des Mines d’Or de Sadiola S.A., the company operating the Sadiola gold mine in Mali, to Allied Gold Corp on 30 December 2020. At the time of the sale, mining of ore had ceased at the Sadiola gold mine.
In April 2017, Société d’Exploitation des Mines d’Or de Yatela below). Morila, Sadiola andS.A. (Yatela), the company operating the Yatela have 30-year permits which expire in 2029, 2024 and 2030, respectively. Morila’s Exploitation Permit covers approximately 200 square kilometres and was issued on 4 August 1999. Sadiola’s prospecting and exploitation agreement covers approximately 303 square kilometres and was originally entered into on 5 April 1990.
Tanzania
General laws relating to the cancellation of Yatela’s permit through decree 2017/0613/PM-RM dated 28 July 2017, notified to Yatela on 5 October 2017. Attempts have been made to correct this error, notably through decree 2017-00951/PM-RM dated 28 November 2017 which purports to abrogate the 28 July 2017 cancellation decree. This measure is considered to be insufficientmining
Tanzania Mining Act and other legal options are being explored in collaboration with the Malian authorities to cure this administrative error and to fully restore the permit for Yatela.Tanzania Mining Regulations
Mineral rights in the United Republic of Tanzania are principally governed by the Mining Act, of 2010 (No. 14) (Tanzania Mining Act), as amended in 2017 by the Written Laws (Miscellaneous Amendments) Act, 2017 (No. 7) and which was revised and published by the Attorney General of Tanzania on 30 October 2018 as the Mining Act, Chapter 123 (R.E. 2018), and the Mining Regulations, 2010 (Tanzania Mining Regulations), as amended in 2018, which include: Mining (Mineral Rights)Beneficiation) Regulations, 2018 as amended in 2019; Mining (Minerals and Mineral Concentrates Trading) Regulations, 2018 as amended in 2019; Mining (Radioactive Minerals) Regulations, 2018; Mining (Local Content) Regulations, 2018 as amended in 2019; Mining (Geological Survey) Regulations, 2018; Mining (Audit and Inspection of Records) Regulations, 2018; and Mining (Designated Minerals Certification) Regulations, 2019. Other regulations are: Mining (Environmental Protection For Small Scale Mining) Regulations, 2010; Mining (Mineral Beneficiation) Regulations 2018; Mining (Minerals and Mineral Concentrates Trading) Regulations 2018; Mining (Safety, Occupational Health and Environmental Protection) Regulations, 2010; Mining (Radioactive Minerals)(Mineral and Gem Houses) Regulations, 2018,2019; Mining (Local Content)(Mining Shareholding and Public Offering) Regulations, 2018,2016 as amended in 2017; Mining (Diamond Trading) Regulation, 2019; Natural Wealth and Resources (Permanent Sovereignty) Code of Conduct for Investors in Natural Resources Regulations, 2020 (Permanent Sovereignty Regulations); and The Natural Wealth Contracts (Review and Re-Negotiation of Unconscionable Terms) Regulations, 2020. The application of the Code of Conduct under the Permanent Sovereignty Regulations extends to employees, agents, suppliers and consultants and requires them to comply with other binding instruments and decisions made based on such instruments, in addition to policies, laws and regulations. The Permanent Sovereignty Regulations make it mandatory to seek the advice of an office bearer or the office of Attorney General, if the requirements of the Code, provisions of the Mining (Geological Survey) Regulations, 2018,Act or other instruments relating to natural wealth and resources become ambiguous, unclear or in conflict resulting into uncertainty. Further, the Mining (AuditCode of Conduct requires investors to conduct periodic reviews in respect of their compliance with such legislation in order to prevent the occurrence of matters prohibited by the laws of Tanzania. The Code also requires every investor to sign and Inspection of Records) Regulations, 2018.submit an integrity pledge.
The Tanzania Mining Act and the Tanzania Mining Regulations came into force in November 2010 followed by amendments to the Tanzania Mining Act of Julyin 2017 and subsequent amendments to the Tanzania Mining Regulations in 2018 and 2019.
Amendments of the Tanzania Mining Act and the Tanzania Mining Regulations
As mentioned above, the Tanzania Mining Act was amended in 2017 followed by an amendment of the Tanzania Mining Regulations in 2018 and 2019 and, together with an Executive Order introducing, introduced the following:
•Dissolution of the Tanzania Minerals Audit Agency whose functions and powers have now been transferred to the Geological Survey of Tanzania (GST);
•Dissolution of the Mining Advisory Board and introduction of the Tanzania Mining Commission. The functions and powers of the Mining Advisory Board have been taken over by the Mining Commission, including the functions of the Commissioner for Minerals. However, the Mining Commission has been made responsible for matters related to auditing and monitoring of
59
mineral production in Tanzania. The Mining Commission has powers to audit quality and quantity of mineral produced and exported by mining entities, financial records of mining entities for the purposes of tax assessments, and environmental management expenditures of the mining entities for the purpose of assessment of compliance to the mine closure plan. Mineral rights holders were required to submit all geological information in their possession to the GST;
•A local content requirement for procurement of goods and services: the Tanzania Mining Act requires that mining companies must give: (i) first consideration to good and services provided or manufactured in Tanzania where they meet mining industry specifications (established by the Standards Authority / internationally acceptable standards), (ii) first consideration for employment to qualified Tanzanians, and (iii) adequate provision for on-the-job training of Tanzanians. Specific minimum local content thresholds are specified in Schedule 1 to the Tanzania Mining Regulations. These will be determined by the Mining Commission alongside the work programme. The relevant Minister may prescribe additional minimum local content thresholds;
•To qualify for holding a Mining Licence in Tanzania, 5 percent of a licensee’s equity must be held by Tanzanians, with 80 percent of its managerial positions held by Tanzanians and 100 percent of other positions held by Tanzanians, in addition to the shareholding of the Government of Tanzania pursuant to Section 10 of the Tanzania Mining Act (i.e. free-carried interest). This amount is determined, and may be varied, by the relevant Minister;
•Establishment of the Local Content Committee (LC Committee) which will oversee the implementation of the Tanzania Mining Regulations and which is composed of a member of the Mining Commission, the Director of Labour and Employment, a member of the Tanzania Private Sector Foundation, the CEO of the Geological Survey of Tanzania, the head of legal services at the Ministry for Minerals and the Executive Secretary of the Mining Commission. The LC Committee sets minimum standards for local content plans and reports to the Mining Commission;
•Establishment of various Tanzanian bodies, including the (i) Geological Survey, (ii) Mineral and Gem Houses, (iii) National Gold and Gemstone Reserve, (iv) Government Minerals Warehouse, (v) National Minerals Resources Data Bank, and (vi) Mining Cadastre;
•Introduction of a statutory procedure for the conduct of Corporate Social Responsibility (CSR), whereby a company is required to prepare annually a CSR plan jointly agreed with the local government authorities in consultation with the Minister for Finance and the Minister for Local Government Authorities; and
•Cancellation of retention licences, with rights over such licences to revert to the Government of Tanzania.
Minimum shareholding and public offering
The Mining (Minimum Shareholding and Public Offering) Regulations, 2016 came into force by Government Notice No. 286 published on 7 October 2016 and revised by amendment on 24 February 2017. On 10 January 2018. 2018, the Government of Tanzania published its new Tanzania Mining Regulations, 2018, which contain, amongst others, the implementation provisions of the amended Tanzania Mining Act.
The regulations set out the requirement to sell shares to Tanzanian nationals, by way of a public offering and listing on the Dar es Salaam Stock Exchange, which will apply to companies that are carrying out large scale mining operations. The regulations also require all existing holders of a special mining licence to list a minimum of 30 percent of their shares on either the Main Investment Market or the Enterprise Growth Market Segment of the Dar es Salaam Stock Exchange within 6 months of the regulations coming into force, which was on 24 February 2017. However, the company believes the listing requirement conflicts with the mining development agreement.
In September 2020, the Government of Tanzania published the Mining (Minimum Shareholding and Public Offering) (Amendment) Regulations, 2020, by means of Government Notice No. 181, which exempts companies holding special mining licences from local listing requirements if such mining company has entered into an agreement with the Government of Tanzania that provides for a non-dilutable free-carried interest in such mining company and an economic benefits sharing arrangement.
Arbitration
Along with other major mining companies, AngloGold Ashanti’s subsidiaries are seeking a constructive dialogue with the Government of Tanzania to gain assurances that the Geita gold mine will not be affected by the legal and fiscal changes mentioned above, given their mining development agreements which guarantee fiscal and regulatory stability as well as an agreement between all parties before material legal and regulatory changes are made. As a precautionary step to safeguard its interests, AngloGold Ashanti commenced international arbitration proceedings against the Government of Tanzania in connection with the enactment of this legislation in July 2017. These arbitral proceedings were stayed until 12 March 2021 in order to afford the parties the opportunity to achieve an amicable resolution of the dispute and as a result of the impact of the COVID-19 pandemic. On 15 March 2021, and due to continuing COVID-19 issues in sub-Saharan Africa, we requested a further extension to stay the proceedings. This request is pending with the arbitral tribunal.
The arbitration action against the Government of Tanzania seeks declaratory relief in accordance with the terms of the mining development agreement to preserve the company’ and its shareholders’ rights and interests in the Geita gold mine, including confirmation from the Government of Tanzania that the company is exempt from the listing requirement. The arbitration
60
proceedings also seek to confirm that AngloGold Ashanti does not, as a result of its existing mining development agreement, fall within the scope of the new mining legislation, under which the Government of Tanzania has the right to (i) renegotiate existing mining agreements at its discretion, (ii) receive a free-carried interest of no less than 16 percent in all mining projects, and (iii) acquire up to 50 percent of the shares of the mining company commensurate with the total tax expenditure incurred by the Government in favour of the mining company, and which includes an increase in the rate of revenue royalties from 4 to 6 percent and a 1 percent clearance fee. AngloGold Ashanti can provide no assurance that the new mining legislation, including the listing requirement, will not apply to its operations in Tanzania and the outcome of the arbitration action may have a material adverse impact on the company’s results of operations and financial condition. See also “Item 8A: Legal Proceedings—Tanzania”.
Categories of mineral right licences
Ownership of and control over minerals on, in or under the land vest in the President of the United Republic of Tanzania. No person is allowed to prospect for minerals or carry on mining operations except pursuant to the authority of a mineral right licence granted, or deemed to have been granted, under the Tanzania Mining Act or its predecessor acts.
To enable a company to prospect or mine, the Tanzania Ministry of Minerals (MEM) initially grants an exclusive prospecting licence. Upon presentation of a feasibility study, together with certain other environmental, social and financial assurances, the MEM may then grant a form of licence for mining. Licensing decisions take into account the abilities of the company (including its mining, financial and technical capabilities), projected rehabilitation programmes, environmental compliance and the payment of royalties.
licences for exploration, licences for mining, and licences for ancillary activities. Licences for Exploration:
exploration include prospecting licence;licences and
gemstone prospecting licence.
licences. Licences for Mining:
mining include special mining licencelicences (if the proposed capital investment is equal to at least US$USD 100 million);
, mining licencelicences (if the proposed capital investment is equal to between $100,000USD 100,000 and $100USD 100 million); and
primary mining licencelicences (reserved for Tanzanian citizens).
Licences for Ancillary Activities:
ancillary activities include processing licence;
licences, smelting licence;licences and
refining licence.
licences. For purposes of AngloGold Ashanti’s Geita Gold Mine,gold mine, only prospecting retention and special mining licences are relevant.
Prospecting licence
A prospecting licence grants the holder the exclusive right to prospect in the area covered by the licence for all minerals within the class of minerals applied for. The classes that can be applied for include, (amongst others):
amongst others, metallic minerals;
minerals, energy minerals;
minerals, gemstones other than kimberlitic diamonds;diamonds and
kimberlitic diamonds. Holder of prospecting licences have the obligations to: (i) commence prospecting operations within three months or such further period as the Mining Commission may allow from the date of the grant of the licence or the date as stated in the licence as commencement date; (ii) give notice to the Mining Commission on discovery of any mineral deposit of potential commercial value; and (iii) adhere to the prospecting programme which is attached to the licence and expend on prospecting operations not less than the amount prescribed.
An application for a prospecting licence is made to the Mining Commission and the licence, once granted, is valid for a periodan initial term of four years. After the initial term, the licence is renewable for a further period but there isof three years, with no option to renew after the first renewal.for renewal thereafter. Upon each renewal, 50 percent of the area covered by the licence must be relinquished. A company applying for a prospecting licence must, amongst other things, state the financial and technical resources available to it.
A prospecting licence is not freely transferable and requires the Mining Commission to register any transfer of a prospecting licence. The Mining Commission will refuse to register the transfer unless the transferee proves that it meets the financial and technical capability criteria required to apply for such licences. Holders of prospecting or retention licences over a tenement will not automatically have first right to any mining licence granted over that tenement. However, in practice, they will be best positioned to meet the requirements to be granted a form of licence for mining.
Special mining licence
Mining is mainly carried out through either a mining licence or a special mining licence, both of which confer on theirthe holder the exclusive right to conduct mining operations in or on the area covered by the licence. A special mining licence is granted for the shorter of either the estimated life of the ore body indicated in the feasibility study report or such period as the applicant may request. It is renewable for a further period not exceeding the estimated life of the remaining ore body. Special mining licences have certain fiscal and other advantages over mining licences, as the holder of a special mining licence may enter into a mining development agreement with the Government of Tanzania to guarantee the fiscal stability of a long-term mining project and make special provision for the payment of royalties, taxes, fees and other fiscal imposts. A special mining licence holder may, in certain circumstances, unilaterally amend the programme of the mining operations agreed with the MEM.
The holder of a special mining licence may apply for renewal of its licence at any time but no later than one year before the expiry of the licence. The renewal shall not be for a period exceeding the estimate life of the remaining ore body. The Mining Commission may reject an application for renewal if: (i) the applicant is in default; (ii) the applicant was issued with a notice of default and failed to rectify the default or the default is capable of remedial; (iii) the development of the area has not proceeded with reasonable diligence as agreed in the relevant mining development agreement; (iv) minerals are not produced in workable quantities; (v) the program of intended mining operations for the renewal will not ensure proper development of resources; and (vi) the applicant does not have the relevant environmental certificate as required by the Environmental Management Act, 2004
61
(No. 20). Except in the case of a special mining licence, a mineral right may be freely transferred by its holder (in whole or in part) to another person or entity without requiring consent from the MEM. However, the Mining Commission must be notified of any transfer of a prospecting licence and will refuse to registerwhich is the transfer unless the transferee proves that it meets the financial and technical capability criteria required to apply for such licences.relevant licensing authority. The grant and assignment of a special mining licence generally requires the approval of the Cabinet after the Mining Commission has forwarded the application to the Minister of Minerals for further approval. There are limited exceptions to the requirement for the licensing authority’s consent (such as transfers to an affiliate company of the licence holder or to a financial institution or bank as security for any loan or guarantee in respect of mining operations).
The Finance Act, 2015 which was assented to on 28 June 2015 and(No. 16) came into force on 1 July 2015 and contains a provision for a 30 percent capital gains tax on the sale of shares by an off-shoreoffshore parent company. This provision was introduced by the Finance Act, 2012 (No. 8) and in this legislation, additional changes were also made to the procedure for payment of capital gains tax by the seller of shares. Tax at the rate of 30 percent is payable by way of an initial instalment of 20 percent on the transfer, based on the notional gain that the seller would make after a further instalment of the remaining 10 percent is due.
The Value Added TaxFinance Act, 2014 (the VAT Act) which2017 (No. 4) came into force on 1 July 2015 restricts2017 and both imposes and revises certain taxes, duties, levies and fees. It further amends certain written laws relating to the collection and management of public revenue. Among other provisions, it has introduced inspection or clearance fees on the exportation or domestic use of minerals. Such exportation or domestic use is restricted unless such minerals have been inspected or cleared at the mining areas, ports, airports, border or posts and the clearing fee of 1 percent of the gross value of the minerals has been paid by the exporter or any other person in possession thereof.
Value Added Tax Act
Effective 20 July 2017, the Value Added Tax Act, 2014 (No. 5) (VAT Act) was amended by the Written Laws (Miscellaneous Amendments) Act, 2017 (No. 7) in order to restrict VAT relief on purchases madefor VAT input tax paid by mining companies. Thecompanies on goods and services. Prior to the enactment of this amendment to the VAT Act, is specific in that it provides that no purchase by companies is exempt or zero rated unless specified by the law. Previously mining companies were entitled to 100 percent100% VAT relief.relief in respect of the goods and services they purchased. The amendment prohibits refunds for VAT input tax incurred on a series of raw products, including the exportation of “raw minerals”. Subsequently, the Tanzania Revenue Authority (TRA) denied our applications for VAT input credit refunds, which amounted to a total of $139 million as of 31 December 2020, covering the period from July 2017 onwards, on the basis that all of the gold doré that we export constitutes “raw minerals” for purposes of the VAT Act. In response, the company filed formal notices of objection with the TRA stating that the exportation of gold doré is, in its view, not covered by the restriction since doré does not fall within the category of “raw minerals” as used in the VAT Act. On 22 February 2019, the Tanzania Mining Act was amended by the Written Laws (Miscellaneous Amendments) Act, 2019 (No. 2) to introduce a definition for “raw minerals” which supports our interpretation that gold doré is excluded from the prohibition. On 1 July 2020, the Finance Act, 2020 (No. 8), amended the VAT Act, without retrospective effect, in order to remove the restrictions on VAT input tax credits for the exportation of “raw minerals” as well as a series of other raw products. This recent amendment confirms the technical basis for VAT input tax recovery for mineral exporters from July 2020 onwards. Discussions with the TRA are ongoing to resolve our historical claims for VAT input credit refunds for the period from July 2017 to June 2020, while VAT claims from July 2020 onwards are subject to verification procedures by the TRA before any refunds will be received.
Local Government Levies
As mentioned above,below, following the signature of thean addendum to the mining development agreement, Geita Gold Minegold mine is required to pay local government a service levy of 0.3 percent of its gross annual turnover in line with the Local Government FinanceFinances Act, No.9 of 1982.
Environmental Impact Assessment RegulationsManagement Fees and Charges
The Environmental Management (Fees and Charges) (Amendment) Regulations, 2016 (the(EM Regulations), which came into effect on 2 May 2016, introduced new fees in relation to the review of the Environmental Impact Assessment on projects by the National Environmental Management Council (NEMC). According to the EM Regulations, the fees involved are ‘0.1%amount to 0.1 percent of the total project costs’ or the minimum amount of TZS 25 million (approximately $11,000). However, the EM Regulations have not defined the phrase ‘project cost’term “project cost” nor have they provided a detailed breakdown on the determination of the project cost.
Labour laws
On 15 September 2015, the Non-Citizens (Employment Regulation) Act, 2015 (No. 1) (Non-Citizens Act) came into force which vests powers concerning work permits with the Labour Commissioner. Therefore, non-citizens wishing to be employed in the country are required to apply and be granted a work permit before applying for a residence permit. Before granting the work permit, the Labour Commissioner must be satisfied that all efforts have been explored to acquire a local expert. Further, the
62
company is required to submit a succession plan which sets out a well-articulated plan for the transfer of the non-citizen’s knowledge and expertise to Tanzanian citizens. Moreover, the Commissioner General of Immigration is required to take into consideration conditions of the work permit issued by the Labour Commissioner when granting a residence permit. In addition, the Non-Citizens Act introduced the Short-Term Permit (STP) which is granted to non-citizens who wish to work in the country for a period of not more than six months. Foreigners intending to work in Tanzania for more than three months are required to apply for an STP. The application for an STP is made to the Ministry of Labour and Employment.
Transparency and accountability laws
In 2015, the Tanzania Extractive Industries (Transparency and Accountability) Act, 2015 (No. 23) (TAA) came into force. The TAA establishes the Tanzania Extractive Industries (Transparency and Accountability) Committee (TAA Committee), an independent Government entity which is an oversight body for promoting and enhancing transparency and accountability in the extractive industry. The TAA Committee has powers under the TAA to impose obligations on specified extractive industries and statutory recipients to receive information on reconciliation on payments made and revenues received by the Government of Tanzania. In addition, an extractive industry is required under the TAA to submit to the TAA Committee annual reports containing information on local content and corporate social responsibility. The TAA also mandates that all concessions, contracts and licences are made public as well as all revenue collected from the extractive industry. Further implementing regulations require companies in the extractive industry to keep records of payments, beneficial ownership information, cost of production, exploration, prospecting, award or transfer of license, capital expenditure, volume of production and export date in respect of the granted licence.
Natural Resources Legislation in Tanzaniaresources legislation
The governmentGovernment of Tanzania enacted two Natural Resources laws in respect of natural resources that came into force in July 2017. The two laws are The2017: the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act, 2017 (No. 6) (Unconscionable Terms Act) and Thethe Natural Wealth and Resources (Permanent Sovereignty) Act, 2017 (together,(No. 5) (Permanent Sovereignty Act and together with the Unconscionable Terms Act, the Natural Resources laws). In January 2020, it also published implementing regulations, including the Natural Wealth and Resources (Review and Re-negotiation of Unconscionable Terms) Regulations, 2020 and the Natural Wealth and Resources (Permanent Sovereignty) (Code of Conduct for Investors in Natural Wealth and Resources) Regulations, 2020.
The Natural Resources laws provide that Tanzania has sovereignty over its natural resources and require that all arrangements or agreements that relate to “natural wealth and resources” are subject to review by the National Assembly. InSuch agreements must fully secure the interests of the people of Tanzania. During a review all unconscionable terms as interpreted in accordance with the law are expunged from the agreement. The laws also require that new natural resources agreements to beare reviewed by the Government. The natural wealth and resources of Tanzania shall be inalienable and remain as the property of the people of Tanzania held in trust by the President.
In addition, under the laws, disputes over natural wealth and resources will not be subject to any proceedings in any foreign court or tribunal. As a result, investors are restricted from accessing international dispute resolution mechanisms. Accordingly, companies are now required to adopt Tanzanian law and local dispute resolution in all mining agreements. EveryAs such, all disputes will be handles by Tanzanian judicial bodies or any other Tanzania government body vested with powers to resolve disputes.
Moreover, every undertaking must demonstrate “guaranteed returns into the economy” from all earnings accrued or derived from such extraction, exploitation or acquisition and use. In addition, to ensure that the Government and the people of Tanzania obtain an equitable stake in the exploitation of mining resources, all project earnings must be retained in Tanzanian banks. Investors are also prevented from freely exporting raw minerals and repatriating funds.
Section 6 of the Unconscionable Terms Act specifically provides that where there is an unconscionable term, the National Assembly may pass a resolution for re-negotiation of the agreement whereupon the Government shall serve notice to the investor to re-negotiate the term or agreement. The Government and the particular investor have 90 days from the notice date to re-negotiate the term or agreement. This period can be extended if both parties consent. If both parties fail to revise the unconscionable term, the term will be deemed removed from the agreement.
A term is considered “unconscionable” under the Unconscionable Terms Act if, among other grounds, the requirements or provisions of the agreement restrict the right of the state to exercise authority over foreign investment within the country and in accordance with the laws of Tanzania, are inequitable and onerous to the state, secure preferential treatment designed to create a separate legal regime to be applied discriminatorily for the benefit of a particular investor, deprive the people of Tanzania of the economic benefits derived from subjecting natural wealth and resources to beneficiation in the country, or subject the state to the jurisdiction of foreign laws and foreign courts or tribunals.
Tanzania Shipping Agencies Corporation
In February 2019, the Tanzania Shipping Agencies Corporation (TASAC) issued a public notice informing the general public that, effective 4 March 2019, all clearing and forwarding services relating to import and export of goods and items as specified under
63
section 7(1)(a) of the Tanzania Shipping Agencies Act, 2017 (No. 14), which include minerals, mineral concentrates and products and extracts related to minerals, shall exclusively be handled by TASAC. Concerned about the impact on their operations, mining companies as well as other interested parties lodged an appeal to the Minister of Transportation. As a result, the effective date of the notice was delayed and the imposition of prescribed fees was suspended, while TASAC continued to provide services to its clients. On 5 February 2021, the Government published the Tanzania Shipping Agencies (Shipping Business Fees, Charges and Commission) Order in the Government Gazette through Government Notice No. 181 of 2021, which reduced the prescribed fees and eliminates certain other charges for the clearing and forwarding services provided by TASAC, including in connection with the handling of the company’s export of gold bullion and import of certain goods.
AngloGold Ashanti’s rights and permits
The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania. AngloGold Ashanti has concluded a mining development agreement with the Ministry of Minerals on 24 June 1999 and was issued a special mining licence covering approximately 196 km2 for a period of 25 years, which expires on 26 August 2024.
On 9 October 2014, an addendum to the mining development agreement was entered into ratifying the following changes:
•An increase in the royalty rate from 3 percent to 4 percent with effect from 1 May 2012;
•With effect from the financial year 2015, the capital allowance applicable to the unredeemed qualifying capital expenditure (15 percent per annum) referred to in section 18(a) of the Income Tax Act, 1973 (No. 33) shall no longer apply; and
•With effect from 1 July 2014, Geita Gold Mining Limited is liable to pay the Geita District Council Levy at a rate of 0.3 percent on turnover (no longer capped at USD 200,000 per annum as provided under Article 4 of the company’s mining development agreement).
In March 2020, Geita Gold Mining Limited received the consent of the Minister of Minerals to change the mining method under its special mining license from open pit to underground method, subject to the requisite terms and conditions.
AUSTRALIA
General laws relating to mining
In Australia, with a few exceptions, all onshore minerals are owned by the Crown. The respective Minister for each state and territory is responsible for administering the relevant mining legislation enacted by the states and territories.
Native Titletitle legislation applies to certain mining tenements within Australia. Australia recognises and protects a form of Native Titlenative title that reflects the entitlement of Aboriginal people to their traditional lands in accordance with their traditional custom and laws. Should Native Titlenative title claims or determinations exist, certain Native Titlenative title processes and procedures will apply under the Native Title Act 1993 (Cth) (Native Title Act) before the tenure is granted. Tenure may be granted subject to conditions relating to Native Titlenative title rights. In the mining context, Native Titlenative title matters are managed as part of the tenement grant process. If disputes arise in relation to the grant of a particular tenement, they can be referred to the National Native Title Tribunal, established under the Native Title Act, for resolution. Native title legislation also provides a framework for compensation to be paid for acts that affect native title rights and interests. Ordinarily, the relevant Commonwealth or State government is liable to pay compensation for acts attributable to it. However, underin the state of Western Australia, the Mining Act 1978 (WA) liabilityprovides that an applicant for compensation associated with native title can be passed back tothe grant of, or the holder of, a mining tenement at the time of a determination ofis responsible for native title compensation.compensation, if determined to be payable, to native title holders.
AngloGold Ashanti’s operating properties are located in the state of Western Australia where tenure is issued under, and mining operations are governed by, the Mining Act 1978 (WA). The most common forms of tenure in Western Australia are exploration and prospecting licences, mining leases, miscellaneous licences and general purpose leases. In most Australian states, if the holder of an exploration licence establishes indications of an economic mineral deposit in the area covered by the exploration licence and complies with the conditions of the grant, the holder of the exploration licence has a priority right against all others to be granted a mining lease which gives the holder exclusive mining rights with respect to minerals on the property. In Western Australia, a general purpose lease may also be granted for one or more of a number of permitted purposes. These purposes include erecting, placing and operating machinery and plants in connection with mining operations, depositing or treating minerals or tailings and using the land for any other specified purpose directly connected with mining operations.
It is possible for an individual or entity to own an area of land (including for infrastructure purposespurposes) and for another individual or entity to be granted the right to explore for or mine any minerals located on or under the surface of the same area. The maximum initial term of a mining lease in Western Australia is 21 years and the holder has the right to renew the lease for an additional 21
64
years. Subsequent renewals are granted at the discretion of the respective state or territory’s minister responsible for mining rights. In Western Australia, mining leases can only be assigned with the prior written consent of the minister.
Tax laws relating to mining
Government royalties are payable by the holder of mining tenure in respect of minerals obtained from the relevant area of land at the rates specified in the relevant legislation in each state or territory. The royalty on gold production in Western Australia is payable quarterly at a fixed rate of 2.5 percent of the royalty value of gold metal produced. The royalty value is calculated by multiplying the amount of gold produced during a given month by the average gold spot price for that month. In addition, the holder of a mining tenement is required to pay annual rent in respect of the tenement. In Western Australia there is a minimum annual expenditure requirement for prospecting and exploration licences and mining leases. Exemptions from the expenditure requirement can be obtained if certain conditions are satisfied.
Environmental laws relating to mining
Mining tenements will be granted with endorsements and conditions relating to protection of the environment. Exploration and mining operations may also require separate approval from the state, territory or federal environment minister, which may require completion of an environmental impact assessment (including a public consultation period) pursuant to applicable environmental protection legislation prior to commencement. Further, a works 'construction' approval and an operating licence under the relevant environmental protection legislation in the state or territory may also be required for certain mine processing or mining-related operations. Depending on the jurisdiction, further separate approval may be required for the removal of native vegetation within the tenement, and the taking and use of water for exploration and mining operations.
AngloGold Ashanti’s rights and permits
AngloGold Ashanti has been granted 21-year term mining leases with rights of renewal to all of its mining areas in Australia, including its proportionate share of joint venture operations and accordingly it has, together with its joint venture partners where applicable, the exclusive right to mine in those areas. Both the group and its joint venture partners are fully authorised to conduct operations in accordance with relevant laws and regulations. The mining leases and rights of renewal cover the current life-of-mine at AngloGold Ashanti’s operations in Australia.
At Sunrise Dam the deposit is now situated upon two mining leases covering approximately 7,808 hectares and another mining lease of 1,768 hectares contains related infrastructure. Both leases are currently in good standing, with expiry dates in 2038.
At Tropicana, the deposit is situated upon a single mining lease covering approximately 27,228 hectares, which is currently in good standing, with an expiry date in 2036.
AngloGold Ashanti is also conducting early stage exploration activities in Queensland under the Mineral Resources Act 1989 (QLD). AngloGold Ashanti holds 13 exploration permits covering 358,700 hectares. Each permit is granted with an initial term of five years, renewable for two further periods of not more than five years each.
AMERICAS
Argentina
Mining regime
The Argentinean Mining Code governs mining activity in the country. Special regimes exist for hydrocarbons and nuclear minerals. In the case of most minerals, the Argentinean Mining Code establishes that the owner of the land is not the owner of the mineral rights; these are held by the national or provincial governments (depending on the location of the minerals). The national or provincial government, as applicable, is required by the Argentinean Mining Code to grant whomever discovers a new mine title to the mining concession.
The Argentinean Mining Code regulates exploration permits and mining concessions. Exploration permits grant their holders exclusivity rights to any mineral discoveries, including those made by a third party within the exploration area covered by the permit. Exploration permits are limited in time and as to the extent of the exploration area, are subject to the payment of a single-time fee, and also require a minimum exploration work programme and schedule to keep the permit in force.
The Argentinean Mining Code also regulates mining concessions, or exploitation rights. Priority for receiving a mining concession is given to the registered discoverer of the mine, which holds the exploration permit. Once the application for a mine has been submitted, the applicant may commence works and must submit a legal survey of the units requested for the new mine. The application and the legal survey may be opposed by third parties following specific proceedings set forth in the
65
Argentinean Mining Code. Approval and registration of the legal survey by the Provincialprovincial mining authority constitutes formal title to the mining concession.
Holders of mining concessions must comply with three main conditions: payment of an annual fee, investment of a minimum amount of capital, and the carrying out of a reasonable level of exploitation. Failure to do so could lead to forfeiture of the mining concession, which would then revert back to the Province.
In addition to the Argentinean Mining Code, between 1993 and 1995, Argentina implemented several federal laws to offer foreign companies attractive incentives for exploration and mining in Argentina, the Mining Investment Law (Law No. 24, 196), as amended (Mining Investment Law), and related legal provisions being the most important one. Such incentives include, amongst others, import duty exemptions, accelerated depreciation of fixed assets, a three percent cap on provincial royalties set at pit-head value on the mineral extracted, value added tax refunds for exploration-related expenses incurred by companies registered under the Mining Investment Law, and, subject to the filing of a feasibility study for the relevant mining project, a 30-year stability as to the tax burden on the project and the customs and foreign exchange regimes and duties. Cerro Vanguardia S.A. (CVSA) obtained its tax, customs and foreign exchange stability certificate in 1996.
Glacier Law
On 30 September 2010, the National Law on Minimum Requirements for the Protection of Glaciers (Law No. 26, 639) (Glacier Law) was enacted in Argentina, banning new mining exploration and exploitation activities on glaciers and “peri-glacial” areas. The Glacier Law also subjects on-going mining activities in those areas to an environmental audit. If such audit results in material impacts on glaciers and “peri-glacial” areas, the relevant authority is empowered to take action, including suspension or relocation of the activity. The Glacier Law establishes a broad definition of “peri-glacial” areas that, together with glacial areas, must be surveyed by an existing national government agency specifically appointed to this end every five years. The area where the Cerro Vanguardia project is located does not include any glaciers or peri-glacial areas according to the inventory of glaciers which was published in June 2018. The constitutionality of the Glacier Law has been challenged by some mining companies along with the Province of San Juan (which hosts large mining projects), but the National Supreme Court of Justice of Argentina rejected these claims on 4 June 2019.
Rural Land Law
On 27 December 2011, the Argentinean National Congress passed a law on the Regime for Protection of National Domain over Ownership, Possession or Tenure of Rural Land (Law No. 26, 737) (Rural Land Law) which implemented a set of rules restricting the ownership of rural land by foreigners (including foreign individuals or any kind of legal entity controlled by foreign individuals or legal entities). The main restrictions are as follows: (i) foreigners cannot own in the aggregate more than 15 percent of the entire rural land of Argentina, the same cap being applicable to each Province and Municipality; (ii) foreigners will not be allowed to purchase more than 1,000 hectares in the so-called “zona núcleo”, which comprises the main agricultural areas of central Argentina or an “equivalent” surface depending on the location of the land and its productive potential; and (iii) foreigners will not be allowed to buy land that contains, or is adjacent to, relevant and permanent water bodies (such as rivers and lakes). Although exploration permits and mining concessions are not the subject matter of the restrictions placed by the Rural Land Law, certain rights granted to foreign mining companies under the Argentinean Mining Code may be restricted by this new law. For example, the right that holders of mining concessions currently have to force the surface owner to sell the land to the holder of the mining concession might be restricted if the concession holder is a foreign individual or a legal entity controlled by foreigners.
Federal Mining Agreement
On 13 June 2017, the national government and the provinces in whose territories the main mining projects of Argentina are located, signed the New Federal Mining Agreement (FMA). The purpose of the FMA is, amongst other things, to increase provincial revenues from the mining industry by creating legal entities owned by provincial governments that would work in association with private mining companies. This scheme is not new in Argentina and it has been used by some provincial governments, amongst them the Santa Cruz Province (through Fomicruz), in which the Cerro Vanguardia project is located. The FMA also contemplates other forms of revenues such as the formation of special trusts to be funded by mining companies in order to finance education, health and other programmes. Additionally, the FMA included setting forth mining royalties up to three percent of the gross value of commercialised minerals, without any deductions other than VAT. As the FMA has not yet been converted into law by the National Congress, its provisions are neither binding nor enforceable.
In Argentina, the current regulatory regime of royalty payments is expected to change and several different options and payment thresholds have been discussed. In December 2012, the Santa Cruz Province changed the mining royalty from one percent to three percent calculated at pit-head value of the mineral extracted thus bringing it to the cap of the Mining Investment Law.
Foreign exchange control regime
On 1 September 2019, by means of Executive Decree No. 609/2019 (Decree), the Argentinean national government reinstated foreign exchange and export controls. The Decree and related regulations of the Central Bank of Argentina impose, among other
66
measures, the obligation of Argentinean residents to transfer to Argentina and/or sell for Argentinean pesos in the Argentinean foreign exchange market (mercado de cambios) the countervalue (contravalor) from their exports of goods within a specified time period. This period depends on the goods exported and the relationship between the Argentinean exporter and the foreign importer and ranges from 15 to 365 calendar days counted as of the date on which the Argentinean customs authorities certify the shipment to the export destination. Regardless of the applicable maximum term, the proceeds from the export must be transferred and sold in the Argentinean foreign exchange market no later than five business days from the date of collection.
The export of goods is regulated by Communication “A” 6882 of the Argentinean Central Bank (as modified) which establishes the specific regulatory requirements in order to implement the measures adopted by the national government in this area. In accordance with these Central Bank regulations, the exporter shall select a financial institution to track each export transaction through the SECOEXPO (Seguimiento de las negociaciones de divisas por exportaciones de bienes) tracking system which is administered by the Argentinean Central Bank. The selected financial institution must determine the amount and deadline to settle the export proceeds and shall register the amounts allocated to each export transaction in the tracking system. Upon the expiration of the applicable term to transfer and sell the export proceeds, the designated financial institution must inform the Argentinean Central Bank, through the SECOEXPO tracking system, if the exporter has complied with its obligations or not.
As a general rule, prior approval of the Argentinean Central Bank is required to access the foreign exchange market for transactions relating to the outflow of funds, except in certain circumstances. For example, no prior approval is required when all holdings in foreign currency in Argentina are deposited in accounts with financial institutions and the amount of “liquid external assets” available at the beginning of the day in which access to the foreign exchange market is effected is lower than the equivalent of $100,000. “Liquid external assets” include, among others: holdings of foreign currency bills and coins, coined or good delivery gold, demand deposits in foreign financial institutions and other investments which allow for immediate liquidity in foreign currency (such as investments in foreign government securities, funds in investment accounts held abroad, crypto-assets, funds in payment service providers, etc.). Reserve or guarantee funds created under financing transactions or derivatives transactions entered into abroad are not considered liquid external assets. There are also certain circumstances in which the $100,000 limit will not be considered to have been exceeded. Furthermore, the Argentinean Central Bank is not required to give prior approval when a commitment is given to settle through the foreign exchange market, within five business days of their availability, any funds received abroad as collection of (i) loans granted to third parties, (ii) term deposits, or (iii) the sale of any kind of asset, when each of such had been granted, created or purchased after 28 May 2020. In addition, no prior approval is required when the client files an affidavit stating that: (i) as of the date on which access to the foreign exchange market is requested it has not sold securities against foreign currency in Argentina or transferred such securities to depository entities abroad in the past 90 calendar days, and (ii) undertakes not to arrange sales of securities against foreign currency in Argentina or transfers thereof to depository entities abroad from the moment it requires access and for the subsequent 90 calendar days.
From 30 December 2020 until 31 March 2021, prior approval from the Argentinean Central Bank is not required for payments in connection with the import of goods if certain conditions are satisfied. To qualify, the financial entity should hold an affidavit from its client stating that the total amount of payments associated with its imports of goods made through the foreign exchange market as from 1 January 2020, including the intended payment, does not exceed by more than $1 million the amount resulting from the following sum:
•The amount for which the importer would have access to the foreign exchange market when calculating imports of goods under the SEPAIMPO (Sistema de seguimiento de pagos de importaciones) monitoring system and that were made official between 1 January 2020 and the day prior to accessing the foreign exchange market; plus
•The amount of deferred or on-demand payment of imports of goods of the following transactions not included in the previous point: (i) operations shipped as from 1 July 2020 or previously shipped that have not arrived in Argentina before that date, (ii) aimed to cancel commercial debts with export credit agencies, foreign financial entities or guarantees thereof, (iii) made by the public sector, business organizations where the Argentinean government has majority participation or public trusts, (iv) with pending customs registration of supply of critical medicines, and (v) purchase of kits for the detection of COVID-19; minus
•The amount pending to be regularised for repayment of imports with pending customs registration made between 1 September 2019 and 31 December 2019.
CVSA had a cash balance of $137 million equivalent as at 31 December 2020, of which $50 million is currently eligible to be declared as dividends. Application has been made to the Argentinean Central Bank to approve $11 million of this eligible amount to be paid offshore to the company, however, approval remains pending. The cash is fully available for CVSA’s operational requirements.
Export duties
On 21 December 2019, the National Law on Social Solidarity and Productive Reactivation (Law No. 27, 541) (Solidarity Law) was enacted. The Solidarity Law grants the national government power until 31 December 2021 to impose export duties which may not exceed certain caps. For example, the Solidarity Law provides that export duties on mining exports cannot exceed eight percent of the taxable value or official FOB price. On 2 October 2020, the national government published Decree No. 785/2020
67
(Export Duties Decree) which sets an export duty rate of eight percent for certain goods, including doré bars and gold alloys. The Export Duties Decree will be applicable until 31 December 2021 and revokes the provisions of Decree No. 793/2018 which had previously set the export duty at 12 percent ad valorem. These export duties, if not compensated with other tax reductions, affect the tax stability guarantee granted to CVSA in 1996 in light of the fact that at the time export duties were zero percent.
On 26 February 2019, the Argentinean tax and mining authorities published a resolution (RC 4428/2019) establishing an administrative procedure to be followed in order to obtain the reimbursement or compensation of federal taxes paid in excess of the total tax burden provided for by the applicable tax stability guarantee. CVSA initiated this new procedure in order to claim compensation for the export duties it paid in 2018 and 2019 as export duties are not contemplated by its tax stability guarantee. Prior to the publication of RC 4428/2019, CVSA had already submitted to the tax authorities claims for reimbursement of the export duties it paid from 2008 to 2015.
Pursuant to the new administrative procedure, the National Mining Secretariat issued a favorable opinion regarding CVSA’s claim in respect of fiscal year 2018, which amounted to approximately $4.0 million as of 31 December 2020. This claim is currently under review by the relevant customs authorities. The National Mining Secretariat has not yet issued an opinion in respect of CVSA’s claim in respect of fiscal year 2019, which amounted to approximately $12.3 million as of 31 December 2020.
Furthermore, CVSA has requested the tax authorities to apply the procedure provided for in RC 4428/2019 in respect of its historical claims for fiscal years 2008 to 2015 during which the imposition of export duties also exceeded CVSA’s total tax burden under its tax stability guarantee. However, these claims, which amounted to approximately $6.1 million as of 31 December 2020, are still being reviewed under the rules to challenge export duties instead of the new procedure provided for in RC 4428/2019. CVSA has appealed the application of those rules and a decision on this issue is pending.
Environmental laws relating to mining
Any mining company wishing to commence or modify any mining-related activity, as defined by the Argentinean Mining Code, including prospecting, exploration, exploitation, development, preparation, extraction, and storage of mineral substances, as well as property abandonment or mine closure activity, is required to prepare and submit to the competent Provincialprovincial environmental authority an Environmental Impact Assessment (EIA) prior to commencing the work. Each EIA is required to describe the nature of the proposed work, its potential risk to the environment, and the measures that will be taken to mitigate that risk. If accepted by the competent authority, the EIA is used as the basis to create a Declaration of Environmental Impact (DEI) to which the mining company is required to adhere during the mining-related activity at issue. The DEI is required to be updated at least on a biannual basis. Sanctions and penalties for non-compliance with the DEI are outlined in the Environmental Protection section of the Argentinean Mining Code, and may include warnings, fines, suspension of quality certifications, restoration of the environment, temporary or permanent closure of activities, and withdrawal of authorisation to conduct mining-related activities.
In the case of Cerro Vanguardia, AngloGold Ashanti’s operation in Argentina, the mining concession holder is AngloGold Ashanti’s partner, FomentoMineroFomento Minero de Santa Cruz S.A.S.E. (Fomicruz). On 27 December 1996, Fomicruz entered into a usufruct agreement whereby Cerro Vanguardia S.A.CVSA was granted an irrevocable right to exploit the Cerro Vanguardia deposit (encompassing an area of approximately 543 square kilometres)km2) for a 40-year period, which expires on 26 December 2036. Cerro Vanguardia S.A.CVSA is an Argentinean companya corporation incorporated in Argentina indirectly controlled by AngloGold Ashanti, with Fomicruz as minority shareholder.
The Brazilian Constitution of 1934 states that, for purposes of exploration and exploitation, deposits and other Mineral Resources constitute property separate from the soil and belong to the Federal Union. Exploration and exploitation of such Mineral Resources may take place only with the Federal Union’s concession and in such a way as to protect the national interest. Federal law sets out penal and administrative sanctions for conduct and activities deemed harmful to the environment.
In Brazil, the National Mining Agency (ANM) is the state body within the Mines and Energy Ministry (MME) that is responsible for: (i) the registration of mining titles, (ii) the grant of authorisations and concessions, (iii) the supervision of mining activities and mining titleholders, and (iv) the issuance of supplementary rules in relation to mining activity.
Under the current Brazilian Mining Code, there are two kinds of mines: (i) claimstake mines (Minas Manifestadas)(minas manifestadas), for which rights were acquired before 1934 and exist independently of any mining licence or authorisation from the Federal Government and for which the Mineral Resources constitute property of the landowner and (ii) granted mines, which are those that rely on grants from the Federal Government for mineral exploration or exploitation (pursuant to the Brazilian Constitution of 1988). AngloGold Ashanti’s operations in Brazil consist of both claimstake mines and granted mines.
68
Table of 3,662 hectares, Lamego is covered by three geographically contiguous concessions totally 1,622 hectares and Córrego do Sítío is hosted by five geographically contiguous concessions covering a total area of 6,017 hectares. All of these are in good standing. At Serra Grande, the company has interests in or agreements over 61,500 hectares in Crixas Greentone belt, representing approximately 87 percent of the relevant tenements that correspond to all current exploration and mining activities. These have been held since 1987. Brazilian mining concessions remain valid up to the depletion of the Ore Reserve and Mineral Resource.Contents
Mining activities in granted mines must be performed in two defined stages: (i) exploration, which entails defining and evaluating the deposit and determining the feasibility of exploitation, and (ii) exploitation, which involves coordinating operations aimed at the industrial exploitation of the mineral deposit, from the extraction of useful minerals to their processing. Exploration authorisations issued by ANM are valid for one to three years. Extensions can be obtained if necessary, as long as it is justified. In contrast, exploitation rights, once granted, are valid for the lifetime of the deposit, provided the mining titleholder complies with all legal requirements. Pursuant to these requirements, for example, titleholders must (i) start work on mineral exploitation within six months from the date of publication of the Exploitation Concession, (ii) continue their mining activities until the mineral deposit has been exhausted, in accordance with the Economic Exploitation Plan (Plano(Plano de Aproveitamento Econômico)mico) approved by ANM and (iii) refrain from suspending mining activities without prior notice to ANM.
Tax laws relating to mining
During the exploration period, the mining titleholder has to pay an Annual Rate per Hectare (TAH - (Taxa Annual por Hectare)Hectare or TAH), subject to a maximum value set by law. In the exploitation period, regardless of the legal regime governing the project (whether claimstake or granted mines), the mining titleholder has to pay the Financial Compensation for Exploiting Mineral Resources (CFEM - (Compensação FinanceirapelaFinanceira pela Exploração Mineral)Mineral or CFEM). The CFEM which is one and one-half1.5 percent for gold is currently calculated based on revenues.
At the end of 2011 and the beginning of 2012, the states of Minas Gerais, Pará, Amapá and Mato Grosso do Sul each created a new tax (duty) on research, extraction and exploration activities as well as on the use of Mineral Resource carried out in those states. This tax could range from BRL3.00 to BRL6.50 per ton.ton of ore extracted. In the statesstate of Minas Gerais, and Goias, however, gold ore wasis exempted from the collection of this new duty. At the end of 2020, the state of Goiás created a new tax (duty) on research, extraction and exploration activities carried out in this state at a rate of BRL10.38 per ton of ore sold, which currently still needs to be implemented.
At the federal level, the ANM issued Resolution No. 13/19 in August 2019 (replacing its earlier Resolution No. 4/19) which adopted additional regulatory measures to ensure the stability of TSFs, in particular those built or heightened by the upstream method or by any method declared as “unknown”. Among other things, ANM Resolution No. 13/19 prohibits the upstream method for the construction or heightening of tailings dams throughout the national territory of Brazil. It further requires operators to cease all storage and 2017disposal activities at TSFs (known as “deactivation” or “desativação”) constructed or heightened upstream or by an “unknown” method by 15 September 2021 as well as to decommission such TSFs by 15 August 2022 to 15 September 2027 (depending on the capacity volume). ANM Resolution No. 13/19 does not require complete removal of tailings material from TSFs (a process known as “decharacterization” or “descaracterização”). As a result, the Serra Grande mine in the state of Goiás is in the process of reinforcing the dam walls of its upstream TSF in advance of its expected deactivation by 15 September 2021. To comply with the terms of ANM Resolution No. 13/19, the mine will also need to decommission the Serra Grande tailings dam by 15 September 2025. The company has begun the process of transitioning to dry-stacking operations for tailings storage.
Furthermore, Federal Law No. 14.066/20, adopted in September 2020, also imposes requirements on companies to close and decommission upstream TSFs, including our Serra Grande tailings dam, by 25 February 2022 (which date is earlier than required by ANM Resolution No. 13/19). However, Federal Law No. 14.066/20 does permit extensions of the compliance deadline, with the consent of the ANM based on the technical plan for decommissioning. Neither ANM Resolution 13/19 nor Federal Law No. 14.066/20 requires removal of all tailings material in connection with the decommissioning of TSFs. AngloGold Ashanti expects to transition to dry-stacking operations at Serra Grande in advance of the required closure deadline for the Serra Grande tailings dam. With respect to downstream (or “centerline”) TSFs, Federal Law No. 14.066/20 requires companies, to the National Congress for discussion and consideration. Its goals would beextent that communities are located in the self-rescue zone of those TSFs, to (i) strengthen the roleimplement one of the Federal Governmentfollowing measures for such structures: either (i) the structure must be deactivated and decommissioned, (ii) the population must be relocated, with reparations for loss of cultural heritage, or (iii) reinforcement works that guarantee the effective stability of the structure must be carried out, by decision of the public authorities, taking into account the previous nature of the dam in regulating the mining industry, (ii) attract more and better investmentsrelation to the mineral sector, (iii) encourage maximal useoccupation and technical-financial viability of the alternatives. Even if reinforcement works are completed, deactivation and decommissioning of those TSFs will be required at the end of the life of the mine. All of the TSFs operated by AngloGold Ashanti in Brazil have communities located in self-rescue zones. AngloGold Ashanti expects to transition to dry-stacking operations for tailings storage at each location in Brazil in the near term and to decommission each of these dams in accordance with their closure plans. According to current estimates, capital expenditures in 2021 required to implement this new technology will be in excess of $70 million.
At the state level, the state legislator in the state of Minas Gerais adopted Law No. 23.291/19 in February 2019 which contained the state’s policy on TSF safety and should be implemented in conjunction with the equivalent federal policy. Among other things, Law No. 23.291/19 determines the criteria for licensing and inspecting TSF structures, prohibits TSFs constructed or heightened
69
using the upstream method, establishes bond requirements and holds management liable for non-compliance with its provisions. The administrative requirements to implement certain provisions of Law No. 23.291/19 have not yet been issued.
AngloGold Ashanti’s rights and permits
At AGA Mineraçao, Cuiabá has a single concession covering a total area of 3,662 hectares, Lamego is covered by three geographically contiguous concessions totally 1,622 hectares and Córrego do Sítio is hosted by five geographically contiguous concessions covering a total area of 6,017 hectares. All of these are in good standing. At Serra Grande, the company has interests in or agreements over 61,500 hectares in Crixas Greentone belt, representing approximately 87 percent of the relevant tenements that correspond to all current exploration and mining activities. These have been held since 1987. Brazilian mining concessions remain valid up to the depletion of the Ore Reserve and (iv) encourage members ofMineral Resource pursuant to the industry to add value to mineral products.Economic Exploitation Plan approved by the ANM and in accordance with the required environmental permits, and as a result do not have an explicit expiry date.
Colombia
General laws relating to mining titles access. While exploration authorisations would be effective for a longer period of four years, they would be renewable only once, as long as the company is able to justify the renewal to the authorities, who would make a discretionary decision as to whether to approve the request. Companies would also have to demonstrate that they are investing in exploration activities on a yearly basis. On the hypothesis that the access to the area is prevented by either landowners or the ability to obtain an environmental license through no fault of the company, the authority would extend the deadline as many times as necessary.and land ownership
The Colombian Constitution declares that the sub-soil and the non-renewable natural resources located within the Colombian territory are the property of the Colombian State. The underlying principle of Colombian mining legislation for the granting of mining concession contracts is first come,in time, first served.in law. Mining activities are regulated by the Colombian Mining Code, Act 685, 2001.
The filing of an exploration and exploitation proposal triggers a right of preference to obtain rights over the targeted area, provided it is available. Such area cannot exceed 10,000 hectares. Upon receipt of a proposal, the relevant government agency determines whether another proposal or contract already governs the area. If there are no pre-existing claims, the government agency grants the applicant a “free area”.
Concession contract
Such concessions allow concessionaires to conduct the studies, works and facilities necessary to establish the existence of minerals and to organise their exploitation. Upon being awarded a mining concession, a company must take out an insurance policy to cover the costs associated with potential environmental damage as well as breaches of its mining obligations. It may then proceed with exploration activities. Once the exploration phase is complete, the concessionaire files a new plan regarding proposed works and facilities. With the award of the mining concession or tenement contract, there are specified timelines for the completion of the various phases of a mining project, e.g. exploration, construction, exploitation. The company must comply with these timelines unless performance is suspended, for example, due to force majeure or extensions/extensions or modifications to the timelines. Force majeure was declared at the La Colosa project, stopping all activities, following the outcome of the plebiscite held on 26 March 2017 in the Colombian municipality of Cajamarca, which hosts the La Colosa exploration site. TheA grant of force majeure is for one year and will expire in June 2018, after which such declaration will need tomust be extended.
renewed on an annual basis. If the company does not comply with the specified timelines for the completion of the various phases of a mining project, the mining authority may revoke the company's concession contracts or mining licenses. AngloGold Ashanti Colombia S.A. (AGAC) applied for consolidation of its concession contracts related to La Colosa, in respect of which AGAC was not in compliance with some of the specified timelines. The application for consolidation was approved in March 2017, which remedied the non-compliance of each consolidated concession and reset the specified timelines. La Colosa hasAs a single concession which covers a total area of 9,210 hectares and expires on 28 February 2037.
PINES program
In 2013, the contractual obligationsnational government instituted the PINES program designed to aid promoting certain projects that arise from it are deemed to take effecthave a national interest. This designation provides for greater oversight from the national government. All of our three advanced exploration projects (La Colosa, Quebradona and Gramalote) were considered of national strategic interest. Currently, Quebradona and Gramalote remain in the PINES program, but La Colosa was temporarily removed as such (until the force majeure is over).
70
Tax laws relating to mining
From the moment the concession contract is registered with the Mining Register, the concessionaire has several financial obligations, including the payment of (i) a surface fee during the exploration, construction and assembly stage and (ii) royalties.
Once exploration is complete and the mining infrastructure in place, the concessionaire must begin paying royalties to the Colombian government, consisting of a percentage of the date of registrationprimary product and sub-products being exploited. The percentage of the royalty depends on the regulation in force when the concession contract is registered. In the case of the Quebradona project, the deposit mainly consists of copper followed by gold and silver. There is a 5 percent royalty for copper on the production value at the mine’s or well’s edge (i.e. when extracted from the subsoil). In case of gold and silver, a royalty of 4 percent on the production valued at the mine’s or well’s edge (i.e. when extracted from the subsoil) was established.
Furthermore, Colombian law establishes that once the environmental license is granted the concessionaire must invest 1 percent of the project’s value to benefit the basins covered by the environmental license.
Environmental laws relating to mining
In order to obtain an authorization from the National Mining Register.Environmental Licensing Authority of Colombia to carry out a project, the company must prepare an Environmental Impact Study (E.I.A.) for approval by this authority.
Global environmental licenses are granted for the entire life of the project and cover all phases: construction, assembly, operation, maintenance, dismantling, final restoration, abandonment and/or termination.
AngloGold Ashanti’s core mining concession contracts provide that the mining authority has the discretion to declare the underlying concession void if AngloGold Ashanti Colombia S.A. (AGAC)the specific company which holds the concession breaches applicable environmental laws or regulations. If the mining authority were to exercise such discretion against AGAC, AGACit, such company would be required to abandon its projects and all of its other existing mining concession contracts. Pending proposals for new mining concession contracts would also be cancelled and AGACthe company would be banned from doing business with the Colombian government for a period of five years. As a result, AGACthe company would be unable to conduct any mining exploration or development activities during such period. However, this would not affect other AngloGold Ashanti subsidiaries operating in Colombia, which hold singularly or in concert with joint venture partners the majority of the company’s concession contracts in Colombia.
There are some areas where mining activity is prohibited. These areas are:
wetlands, pursuant to the Ramsar Convention on Wetlands of International Importance.Some forest reserves are not “protected”, but are set aside for active forestry purposes. Such forest reserves must be “extracted” after initial prospection, meaning that the concessionaire must obtain a specific permit to partially and temporarily change the use of the soil before pursuing exploration activities. In addition, Resolution 187/2016, passed by the federalnational government in late 2016, identifies areas that the Ministry of the Environment has determined to be “paramos” areas, or paramos transition areas. In these areas there are limitations on industrial or commercial work being performed, including mining. The regulation also specifies a process to determine what work, if any, can be performed in a paramos-designated area. Certain areas designated as “paramos” are within
AngloGold Ashanti’s rights and permits
The La Colosa project managed by AngloGold Ashanti Colombia S.A. (AGA Colombia) remains in force majeure due to the delays in the granting of the environmental permits by the local environmental authority, thereby preventing AGA Colombia from undertaking further exploration activities. The current one-year grant of force majeure, during which time the specified timelines for completing the various phases of the mining footprint currently envisioned for La Colosa. AGAC is evaluating the impact of the Resolution 187/2016, if any, to the current plan for La Colosa. Further, the company is working with the federal government to determine if the designations contained in Resolution 187/2016 are technically accurately and legally defensible, and what the process will be to determine what work, if any, can be performed in certain paramos areas.
Minera de Cobre Quebradona S.A.S. B.I.C. (MCQ) which manages the Quebradona project, obtained the integration of concession agreement 5881 in October 2016 and registered in December 2016. As a result, MCQ was granted the exclusive right to explore, take ownership and dispose of the mineral reserves (ore) extracted from the concession area. MCQ has the right to request an extension of up to 30 years, at least two years before the expiration of the operating period. This extension is registerednot automatic, and the request must be filed with new technical, economic, environmental and social studies that demonstrate the Mining Register. Such fees change based onstatus of the number hectares heldmineral resources. Currently, concession contract 5881 is in its fifth year of the integrated exploration phase. The permits for the construction and mining operation are currently being assessed by the concessionaire, as follows:
The Gramalote project is organised as a joint venture between AngloGold Ashanti (through AGA Colombia Holdings Limited and AngloGold Ashanti Holdings plc) and B2Gold (through B2Gold Corp. and Graminvest Ventures Limited). Gramalote Limited, a
71
company incorporated under the laws of British Virgin Islands which is the legal vehicle operating the joint venture, established a Colombian branch, Gramalote Colombia Limited (GCL), to carry out activities in Colombia and obtain the mining infrastructureconcession contracts necessary to develop the Gramalote project. The Gramalote joint venture has been operated by B2Gold since January 2020. Pursuant to an integrated mining concession contract No. 14292, GCL was granted the exclusive right to explore, take ownership and dispose of the mineral reserves (ore) extracted from the concession area until April 2043. GCL has the right to request an extension of the operating period for up to 20 years, and, if exercised, such request to extend must include new technical, economic, environmental and social studies that demonstrate the status of the mineral resources. Currently, concession contract No. 14292 is in place, the concessionaire must begin paying royalties. Royalties paid tophase of construction and assembly, pending resettlement of communities and the Colombian government consistformal start of construction activities. GCL has received an environmental licence granted by the National Environmental Licensing Authority of Colombia (ANLA) and permits for the construction and mining operation which were approved by the relevant mining authority (Secretaría percentage of the primary product and sub-products being exploited. For gold, gross monthly income is multiplied by 0.8, to which a four percent royalty is applied.de Minas de Antioquia).
United States of America
Nevada
Mineral and surface rights in the United States are owned by private parties, state governments or the federal government. The majority of land utilised for precious metals exploration, development and mining in the western United States is owned by the federal government, and often the state government will have an ownership interest in minerals, regardless of whether the state is the surface owner. The right to mine on such federal land in western states is governed by the U.S. General Mining Law of 1872, as amended (General Mining Law). The General Mining Law allows mining claims on certain federal lands upon the discovery of a valuable mineral deposit and proper compliance with claim location and maintenance requirements.
In Nevada, AGA (U.S.A)AngloGold Ashanti (U.S.A.) Exploration Inc. is advancing a joint venture propertythe Silicon Project, located on federal lands through an Earn-in Option Agreement for 277 mining claims, covering an area of approximately 5,700 acres. Additionally, a further 1,414 mining claims (29,215 acres) are also being explored. On these lands, AngloGold Ashanti (U.S.A.) Exploration Inc. is currently engaged in early-stage exploration activities that include, but are not limited to, geological and spectral mapping, surface geochemical sampling, geophysical surveying and RC and/or diamond drilling.
Mineral exploration activities in Nevada are also generally subject to applicable federal, state, and local permitting requirements, but the specific regulatory authorizations required for the company’s activities are based on the nature and location of the exploratory work. Many of AngloGold Ashanti (U.S.A.) Exploration Inc.’s Nevada operations are currently conducted under what is generally referred to under federal law as a notice-level operation subject to 43 Code of Federal Regulations SectionCFR § 3809.21. The federal Bureau of Land Management (BLM) issued a Notice of Decision for the Silicon Project approving thesethe proposed exploration operations on 1 November 2017. The BLM determined that the operations would not cause unnecessary or undue degradation as defined under 43 Code of Federal Regulations Section 3809.5. An amendmentFour amendments to the project was approved by a BLM Notice of Decision have been authorized by the BLM in letters dated 31 January 2018. The Notice of Decision requires reclamation2018, 2 April 2018, 4 October 2018, and 4 March 2020.
AngloGold Ashanti (U.S.A.) Exploration Inc. has completed a subsequent permitting process for the Silicon Project to increase the exploration activities beyond the 5-acre notice level under federal and state law. This process was initiated in 2019 with the completion and submission of the drill padsrequired environmental baseline studies and roads, including the reseedingsubmission of disturbed lands. The Noticea Plan of Decision also setOperations and Reclamation Plan to the financial guarantee amount for reclamation. The NoticeBLM and the state of Decision includes a two-year term from the date of 1 November 2017.
The BLM issued a Notice of Decision for the Rhyolite North Project approving the proposed exploration operations on 14 January 2020. The Rhyolite North Project, situated within the Nye County of south-western Nevada, is wholly owned by AngloGold Ashanti North America Inc. It is an early-stage exploration project managed by AngloGold Ashanti (U.S.A.) Exploration Inc. and is currently comprised of 237 unpatented mining claims.
The BLM issued a Notice of Decision for the Transvaal Project approving the proposed exploration operations on 19 October 2020. The Transvaal Project, situated within the Nye County of south-western Nevada, is wholly owned by AngloGold Ashanti North America Inc. It is an early-stage exploration project managed by AngloGold Ashanti (U.S.A.) Exploration Inc. and is currently comprised of 505 unpatented mining claims.
Although BMRR also regulates mining within the state. Explorationstate of Nevada, exploration projects of five5 acres or less, the scope of a notice-level operation under federal law, are exempt from BMRR regulation. AngloGold Ashanti’s current Rhyolite North and Transvaal exploration program fallsprograms fall within this exemption.
72
In addition, AngloGold Ashanti (U.S.A.) Exploration Inc. intends to conduct exploration activities on four new projects in western Nevada. Those projects include Midnight Star (553 claims; 11,425.62 acres), Admiral (686 claims; 14,173.55 acres), Atlantis (613 claims; 12,665.29 acres) and Caspa (269 claims; 5,557.85 acres), totalling 2,121 new claims for 43,822.31 acres. These projects will be subject to the same regulatory requirements as our current projects in Nevada.
Minnesota
In Minnesota, AngloGold Ashanti Minnesota Inc. is undertakingcompleted early-stage reconnaissance exploration activities to determine the potential for gold mineralization in the northern counties of Minnesota. Minnesota uses a leasing system for state-owned minerals. Under this system, qualified applicants can obtain a nonferrous metallic mineral lease for a 50-year term that grantsBased on the achieved results, the company the righthas decided to explore, mine, and develop minerals, subject to applicable environmental review and permitting requirements. AngloGold Ashanti Minnesota, Inc. holds a total of 271 state mineral leases administered by the Minnesota Department of Natural Resources. These state mineral leases encompass an area of approximately 106,000 acres. The company’s exploration activities on these lands include regional geophysical surveying, surface geological mapping, rock chip and glacial till sampling, and roto-sonic drilling.
Potential regulatory changes
Over the years, the U.S. Congress has considered a number of proposed amendments to the General Mining Law and other federal statutes.statutes relating to mining. Among the significant features contained in previously proposed legislation were a production royalty obligation, new and more stringent environmental standards and conditions, additional reclamation requirements, extensive new procedural steps which would likely result in extended permitting timelines and granting counties the ability to petition the U.S. Secretary of the Interior to make certain areas unavailable for the location of unpatented mining claims. The U.S. Environmental Protection Agency has also proposed potential revisions to financial assurance requirements relating to mineral development activities. In June 2020, former President Trump signed an executive order directing certain federal agencies to streamline the review processes associated with permitting of infrastructure and natural resources projects. While this executive order may favorably affect the timing of our permit and project approvals, its impact is yet to be determined and remains uncertain.
AGA is currently unaware of any new Federalfederal or state legislative or regulatory changes or rule-making that has been proposed or enacted that would adversely affect its current exploration programs. If any of the above-referenced provisionsrequirements, standards or conditions were adopted in the future that imposed additional or new obligations or costs on AGA in connection with our exploration or extraction activities in the United States, the company’s operations in Nevada and Minnesota could be adversely affected.
MINE SITE REHABILITATION AND CLOSURE
Closure, an integral part of operations
All mining operations eventually cease. An integral aspect of operating AngloGold Ashanti’s mines is ongoing planning for and, where feasible, implementation of concurrent rehabilitation, together with an estimate of associated liability costs and the placement of adequate financial provisions and assurances to cover these costs.
AngloGold Ashanti revised its group closure planning management standard in 2013 and all of its operations are required to comply with the standard, as well as applicable law and regulations, as their closure plans are reviewed and updated.
Closure planning is an activity that starts at the exploration and mine design stage and continues throughout the life of mine:
•New projects include a closure plan which takes into account future closure and associated rehabilitation and other costs.
•The closure plan is reviewed annually and updated every three years (annually in the final three years of a mine’s life) or whenever significant changes are made, taking into account operational conditions, planning and regulatory requirements, international protocols, technological developments and advances in practice.
For many of the older mines, closure planning and the evaluation of environmental liabilities is a complex process. This is particularly so in Brazil Ghana and South Africa,Ghana, where many of the mining and other operations have taken place for more than fifty years. A particular challenge is concurrent rehabilitation, which is carried out while a mine is still operational. This practice serves to decrease the ultimate liability and reduces the final rehabilitation and closure work that must be undertaken, but has the potential to sterilise Ore Reserve, which the company might wish to exploit should conditions, such as the gold price, change.
The company’s group closure standard stipulates that closure planning must be undertaken in consultation with the community. In the course of these consultations, different issues are raised which require site-specific solutions. Livelihood preservation and infrastructure are often key requirements. Communities also require information on the company’s rehabilitation of the landscape and on any lasting environmental impacts. Long-term remediation obligations, including decommissioning and restoration liabilities relating to past operations, are based on environmental management plans and compliance with current environmental and regulatory requirements.
Provisions for decommissioning and rehabilitation costs are made when there is a present obligation, it is probable that expenditure on decommissioning and rehabilitation work will be required and the cost can be estimated within a reasonable range of possible outcomes. These costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws and regulations presently or virtually certain to be enacted and previous experience in the rehabilitation of mine sites.
73
Decommissioning costs and restoration costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Provisions for decommissioning and for restoration (excluding joint ventures)ventures and discontinued operations) increased from $705$634 million in 20162019 to $724$674 million in 2017.2020. This changeincrease mainly relates to changes in discount rates based on global economic assumptions andassumptions. The provisions were also impacted by changes in mine plans, resulting in a change in cash flows and changes in design of tailings storage facilities and in methodology following requests from the environmental regulatory authorities. At 31 December 2017, the environmental rehabilitation provision was $695 million. The balance of the rehabilitation provision of $29 million was included under “Non-current liabilities held for sale” in the statement of financial position.flows.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
In addition to post-mining land rehabilitation and closure requirements, AngloGold Ashanti is subject to extensive environmental, health and safety (EHS) laws and regulations in the various jurisdictions in which the company operates. These requirements govern, among other things, extraction, use, conservation and discharge of water; air emissions (including dust control)control and GHGs); regulatory and community reporting; clean-up of contamination; land use and conservation of protected areas; worker health and safety and community health; and the generation, transportation, storage and disposal of solid and hazardous wastes, such as reagents, radioactive materials, and mine tailings. In addition, environmentalEnvironmental laws and regulations applicable to our operations, including the requirements contained in
environmental permits, are generally becoming more restrictive. Significant EHS requirements, risks and trends affecting our mining and processing operations are described below.
Pursuant to the SA Sale Agreement, AngloGold Ashanti and Golden Core executed a notarial deed of cession of the mining rights with DMRE references GP 30/5/1/2/2/01 MR and GP 30/5/1/2/2/248 MR to transfer and cede these mining rights to Golden Core (Deed of Cession). The Deed of Cession has been lodged for registration at the Mineral and Petroleum Titles Registration Office (MPTRO) to transfer such mining rights from AngloGold Ashanti to Golden Core. While the registration of the Deed of Cession is still pending, the risk in, benefit of, and ownership of these mining rights between the parties shall be deemed to have passed to the cessionary on 30 September 2020, the date of the notarial execution of the Deed of Cession, pursuant to clause 2 of the Deed of Cession.
With respect to the mining right held under DMRE reference GP 30/5/1/2/2/11 MR, AngloGold Ashanti and Golden Core agreed to make an application in terms of section 102 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 (MPRDA) at the Department of Mineral Resources and Energy (DMRE) after the closing date of the SA Sale Agreement requesting, among other matters, the incorporation of this mining right into the mining right with DMRE reference GP 30/5/1/2/2/01 MR (Harmony Consolidation Application). AngloGold Ashanti also executed a notarial conditional deed of abandonment pursuant to which it conditionally abandons this mining right in terms of section 56(f) of the MPRDA (Deed of Abandonment) on condition that ministerial consent is granted in respect of the Harmony Consolidation Application.
On the date of registration of the Deed of Cession and the grant of the Harmony Consolidation Application, AngloGold Ashanti will cease to be a holder of mining rights in South Africa. Once the transaction has been fully implemented, the general laws relating to mining outlined below will no longer be applicable to the company.
46
General laws relating to mining
The Mineral and Petroleum Resources Development Act
Mineral and Petroleum Resources Development Act, Amendment Act and Regulations
The MPRDA came into effect on 1 May 2004. The objectives of the MPRDA are, amongst other things, to allow for state sovereignty over all mineral and petroleum resources in the country, to promote economic growth and the development of these resources and to expand opportunities for the historically disadvantaged. Another objective of the MPRDA is to ensure security of tenure for the respective operations concerning prospecting, exploration, mining and production. By virtue of the provisions of the MPRDA, the state ensures that holders of mining and prospecting rights contribute to the socioeconomic development of the areas in which they operate. The Mineral and Petroleum Resources Development Amendment Act, No. 49 of 2008 (MPRDAA) was passed by the South African Parliament in 2008 and became effective on 7 June 2013. On 23 April 2004, the Minister of Mineral Resources and Energy (MRE Minister) published under the terms of the MPRDA the Mineral and Petroleum Resources Development Regulations in Government Gazette No. 26275 under GNR. 527 (MPRDA Regulations) in order to implement the provisions of the MPRDA and MPRDAA. On 27 March 2020, the MRE Minister published the Amendments to the MPRDA Regulations for Implementation (Revised MPRDA Regulations) in Government Gazette No. 43172 under GNR. 420.
The Mining Charter
Mining Charter, 2004
The Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry, 2004 (Mining Charter, 2004) was published in August 2004. The Mining Charter, 2004 was developed in terms of section 100(2)(a) of the MPRDA and took effect on 1 May 2004. The Mining Charter, 2004 committed all stakeholders in the mining industry to transfer ownership of 26 percent of their assets to black or historically disadvantaged South Africans (HDSAs) within 10 years. The Mining Charter, 2004 also set targets for, amongst other things, the advancement of HDSAs into management positions, the employment of women, procurement of goods and services from HDSA-owned companies, training, community development and the upgrading of mine housing. Mining companies are required to formulate plans to achieve the aforementioned targets, identify current levels of beneficiation and indicate opportunities for growth.
Mining Charter, 2010
Following a reviewof the progress made in the transformation of the mining industry against the Mining Charter, 2004 objectives, the DMRE amended the Mining Charter, 2004. The Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2010 (Mining Charter, 2010) was published on 20 September 2010. The Mining Charter, 2010 retained the requirement to achieve a 26 percent HDSA ownership of mining assets by the year 2014, initially introduced under the Mining Charter, 2004.
Mining Charter, 2017
On 15 June 2017, the MRE Minister gazetted the Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2017 (Mining Charter, 2017), which came into effect on the same day. The Mining Charter, 2017 sought to align the Mining Charter, 2010 with the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, in order to ensure meaningful participation of black people in the mining industry and to provide for policy and regulatory certainty to ease the investment in and development of the mining industry. The Minerals Council launched an urgent application at the High Court of South Africa (Gauteng Division) to interdict the implementation of the Mining Charter, 2017 and set it aside. The MRE Minister undertook to suspend the Mining Charter, 2017 pending the outcome of the DMRE/Minerals Council application. On 4 April 2018, judgement was handed down by the High Court and on 12 August 2020, the Minerals Council released a media statement indicating that the MRE Minister had withdrawn the notice of appeal to the Supreme Court of Appeal. Notwithstanding the repeal of the Mining Charter, 2017 by the adoption of the Mining Charter, 2018 (defined below), the findings of the High Court judgement remain relevant to mining right holders.
Mining Charter, 2018
On 27 September 2018, the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (Mining Charter, 2018) was published and became effective on the same date. The Mining Charter, 2018 repeals the Mining Charter, 2004; the Mining Charter, 2010; and the Mining Charter, 2017. The Mining Charter, 2018 stipulates that it is to be read together with implementation guidelines, gazetted on 19 December 2018. On 26 March 2019, the Minerals Council filed an application for judicial review to set aside certain provisions of the Mining Charter, 2018. On 5 May 2020, the High Court of South Africa (Gauteng Division) heard the application for judicial review. On 30 June 2020, the High Court held that certain affected communities and trade unions that were party to the legal proceedings relating to the Mining Charter, 2017 should be joined to this review application in respect of the Mining Charter, 2018 as respondents. The High Court has not yet decided on the merits of this review application. A key provision of the Mining Charter, 2018 is that existing mining right holders who have achieved the 26 percent HDSA ownership target shall be recognized as compliant for the duration of the mining right. However, the “the once empowered always empowered” principle shall not be applicable on the transfer or renewal of the mining right.
47
The BBBEE Act
The Broad-Based Black Economic Empowerment Act, No. 53 of 2003 (BBBEE Act) is a law of general application in respect of Broad-Based Black Economic Empowerment (BBBEE) and enables the Minister of Trade and Industryto drive BBBEE across all sectors of the economy. On 23 January 2014, the President of South Africa assented to the Broad-Based Black Economic Empowerment Amendment Act, No. 46 of 2013 (BBBEE Amendment Act). The BBBEE Amendment Act came into effect on 24 October 2014 with the object of amending the BBBEE Act to provide a framework of principles, strategies and guidelines aimed at promoting the broad-based socio-economic empowerment of HDSAs across the South African economy and society in the form of ownership, management, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.
Land Expropriation
Constitutional Amendment Bill
On 27 February 2018, the National Assembly resolved to assign the Constitutional Review Committee (CRC) to review section 25 of the Constitution of the Republic of South Africa (Constitution) and other clauses where necessary to allow the state to expropriate land in the public interest without compensation. This resolution follows the African National Congress’s (ANC) resolution at its elective conference in December 2017 to pursue expropriation of land without compensation in a manner that does not destabilise the agricultural sector, endanger food security or undermine economic growth and job creation. In its report dated 15 November 2018, which was adopted by Parliament on 4 December 2018, the CRC recommended that section 25 of the Constitution be amended to make explicit that expropriation of land without compensation is a legitimate option for land reform. As a result, the draft Constitution Eighteenth Amendment Bill, 2019 (Constitutional Amendment Bill) was published for public comment on 6 December 2019. The Constitutional Amendment Bill proposes that, when land and any improvements thereon are expropriated for the purposes of land reform, the amount of compensation payable may be nil. The Constitutional Amendment Bill does not specify the circumstances in which a court may determine that the amount of compensation is nil, but states that national legislation must set out such circumstances. On 10 December 2019, the Constitutional Amendment Bill was referred to the National House of Traditional Leaders for comment by the end of January 2020. Provincial public hearings on the Constitutional Amendment Bill were held in February and March 2020. During May 2020, the Ad Hoc Committee to Amend Section 25 of the Constitution (Committee) met to discuss the extension of the mandate of the Committee, which would have lapsed at the end of May 2020. The Committee agreed that it should request an extension of its mandate until such time as gatherings are permitted, as the Committee had not completed its public hearings due to the COVID-19 pandemic. The Committee was re-established, pursuant to this request, on 30 June 2020. In order for the Constitutional Amendment Bill to be adopted by the South African Parliament, two-thirds of the members of the National Assembly, the lower house, and at least six out of the nine provinces of the National Council of Provinces, the upper house, must vote in favour of the amendment.
Draft Expropriation Bill
Separately, a draft expropriation bill (Expropriation Bill) was published for public comment on 21 December 2018. The Expropriation Bill was introduced in the National Assembly during October 2020 as the Expropriation Bill, 2020. The Expropriation Bill contains a provision to the effect that it may be just and equitable for nil compensation to be paid where land is expropriated in the public interest, having regard to all relevant circumstances, including if (i) the land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from appreciation of its market value; (ii) an organ of state holds land that it is not using for its core functions and is not reasonably likely to require the land for its future activities in that regard, and the organ of state acquired the land for no consideration; (iii) notwithstanding registration of ownership in terms of the Deeds Registries Act, No. 47 of 1937, an owner has abandoned the land by failing to exercise control over it;(iv) the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land; or (v) the nature or condition of the property poses a health, safety or physical risk to persons or other property. Public hearings on the Expropriation Bill have not yet been held.
Environmental laws relating to mining
National Environmental Management Act
The MPRDAA repealed the sections in the MPRDA providing for environmental regulation of mining and prospecting operations. This was the first step in migrating environmental regulation provisions from the MPRDA into National Environmental Management Act, No. 107 of 1998 (NEMA). NEMA was then amended by the National Environmental Management Amendment Act, No. 62 of 2008 and then again by the National Environmental Management Laws Amendment Act, No. 25 of 2014, and now includes provisions to deal with environmental regulation of mining and prospecting which provisions are administered by the MRE Minister. Pursuant to section 24N(8) of NEMA, directors of a company are jointly and severally liable for any negative impact on the environment, whether advertently or inadvertently caused by the company they represent, including damage, degradation and pollution. See also “Item 4B: Business Overview—Mine Site Rehabilitation and Closure” and “Item 4B: Business Overview—Environmental, Health and Safety Matters”.
48
From an environmental perspective, given the wide scope of the statutory duty of care in South African environmental law, erstwhile land owners may be held liable for historic contamination by the regulatory authorities. The duty of care primarily applies to persons responsible for or in control of the activity that caused the pollution, which includes erstwhile landowners and operators. The “polluter pays” principle in South Africa enables the competent authority to seek recourse against various responsible parties based on their historical or current relationship to the source and receptor of degradation or pollution. The duty of care also applies retrospectively to significant pollution or degradation that occurred before the entry into force of NEMA (i.e., 29 January 1999), as well as significant pollution or degradation that arises or is likely to arise at a different time from the actual activity that caused the contamination (e.g., latent or residual impact) or arises through an act or activity of a person that exacerbates pre-existing contamination. The authorities can also seek compensation in respect of clean-up measures that it is required to take on behalf of the responsible parties and apportion liability amongst the responsible parties, which could technically include a historic landowner or mining company that caused the pollution. Although the purchasers of AngloGold Ashanti’s assets in South Africa have contractually assumed all environmental liability associated with its former South African operations and agreed to indemnify AngloGold Ashanti for the same, there remains a risk, at least theoretically, of statutory liability to the state.
AFRICA REGION
Democratic Republic of the Congo (DRC)
General laws relating to mining
The mining industry in the DRC is primarily regulated by Law No. 007/2002 dated 11 July 2002 (2002 DRC Code), as amended by Law No. 18/001 dated 29 January 2018 (Reformed DRC Mining Code) and Decree No. 038/2003 dated 26 March 2003, as amended by Decree No. 18/024 dated 8 June 2018 (Reformed DRC Mining Regulations).
As regards the application of the Reformed DRC Mining Code and Reformed DRC Mining Regulations, Kibali Goldmines S.A. (Kibali) has reserved and continues reserving its rights, including, without limitation, its stability rights under, among other legal sources, the 2002 DRC Code. Discussions with the DRC government on these issues and the possible application of incentives that may be available under the Reformed DRC Mining Code and Reformed DRC Mining Regulations are ongoing.
Companies holding mining titles issued prior to the entry into force of the Reformed DRC Mining Code and Reformed DRC Mining Regulations have claims to a 10-year stability provision in accordance with prior mining legislation. Notwithstanding the adoption of the new regulatory regime, their rights with respect to such stability provision are reserved.
The Reformed DRC Mining Code grants the DRC Minister of Mines the authority to grant, refuse, suspend or terminate mineral rights, subject to conditions set out in the Reformed DRC Mining Code. Mineral rights may be granted in the form of exploration permits for an initial period of five years or in the form of mining permits which are granted for an initial period of 25 years. An exploration permit may, at any time before expiry, be transformed partially into a mining permit or a small-scale mining permit. Mining permits are granted upon successful completion of exploration and satisfaction of certain requirements, including approval of a feasibility study, an environmental impact study and an environmental management plan. To protect and enforce rights acquired under an exploration or mining permit, the Reformed DRC Mining Code provides, depending on the nature of a dispute or threat, administrative, judicial and national or international arbitral recourses.
The holder of a mining permit is required to commence development and mine construction within three years of the award of such permit. Failure to do so may lead to forfeiture of the mining permit. A permit holder must comply with EHSspecific rules relating to, amongst other things, protection of the environment, cultural heritage, health and safety, construction and infrastructure planning. Mining and exploration activities are required to be undertaken in a way that minimizes the impact on the interests of lawful occupants of land and surface rights holders, including their customary rights. The exercise of mineral rights by title holders which effectively deprives or interferes with the rights of occupants and surface rights holders requires payment of fair compensation by the mineral title holder.
Mining companies are required to grant a free-carried and non-contributory participation to the DRC government. The DRC government’s free participation was originally set at 5 percent, which was increased to 10 percent in respect of mining titles issued after the entry into force of the Reformed DRC Mining Code. All mining companies are required to grant an additional 5 percent free-carried participation to the DRC government upon each renewal of their exploitation permit. Under the Reformed DRC Mining Code, a 10 percent local contributory participation is also mandatory for mining titles issued after its entry into force.
Article 220 of the Reformed DRC Mining Code provides that the Prime Minister of the DRC may grant a number of incentives to provinces suffering from infrastructures deficits to encourage economic development from mining resources. Discussions are currently ongoing with the DRC government with respect to incentives that may be available under article 220 of the Reformed DRC Mining Code.
49
Tax laws relating to mining
The Reformed DRC Mining Code sets out an exclusive and regulations have been,comprehensive tax and customs regime that is applicable to mining activities. Mining title holders are subject, amongst other things, to a corporate income tax of 30 percent, a windfall tax of 50 percent (subject to certain prerequisites) and are expectedrequired to continuepay mining royalties to the DRC government. The royalty rate applicable to gold has been set at 3.5 percent. Mining title holders are also required to contribute a minimum of 0.3 percent of total turnover to community development.
The standard rate of VAT is 16 percent and is applicable to all mining companies. In the DRC, Kibali is due certain refunds of VAT which, to date, remain outstanding. During 2020, AngloGold Ashanti recovered $2.23 million in the form of VAT offsets and refunds from its operations in the DRC. We believe that our attributable share of the recoverable VAT balance (including recoverable fuel duty and after discounting provisions) owed to us by the DRC government amounted to $69 million as of 31 December 2020. While an agreement was reached with the DRC government on the reimbursement of the refundable VAT in the last quarter of 2018, uncertainty remains regarding the timing and level of cash receipts and offsets against other taxes for purposes of the recovery of our VAT receivables in the DRC.
The Reformed DRC Mining Code also provides for a level of fiscal stability. A stability clause stipulates that existing tax, customs and exchange control provisions applicable to mining activities are guaranteed to remain unchanged for a period of five years from the enactment of the Reformed DRC Mining Code.
On 18 July 2012, the Convention between the government of the Republic of South Africa and the government of the DRC for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (Convention) came into effect. The Convention is applicable to (i) withholding taxes on amounts paid or credited on or after 1 January 2013; and (ii) other income taxes, levied in respect of taxable periods beginning on or after 1 January 2013. The Convention reduces the withholding tax on dividends paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 5 percent and on interest paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 10 percent. A South African company must own at least 25 percent of a relevant DRC entity’s outstanding shares in order to take advantage of the reduced rates.
Foreign exchange control regime
The Reformed DRC Mining Code imposed new exchange control rules requiring that mining title holders repatriate onshore 60 percent of sale revenues received during the investment amortization period and 100 percent once the investment amortization is completed. As a result of these new rules, we were not able to fully repatriate dividends from our DRC operations to date. During 2020, AngloGold Ashanti repatriated $140 million from its operations in the DRC in the form of dividends received from Kibali (Jersey) Limited. Our attributable share of the outstanding cash balances awaiting repatriation from the DRC amounted to $424 million as of 31 December 2020. Our joint venture partner, Barrick Gold Corporation, which operates the Kibali gold mine, continues to engage with the DRC government regarding the Reformed DRC Mining Code and the cash repatriation.
AngloGold Ashanti’s rights and permits
AngloGold Ashanti holds a significant stake in the Kibali gold mine which is located in the north-eastern part of the DRC. The Kibali gold mine is owned by Kibali Goldmines S.A. (Kibali) which is a joint venture between Barrick Gold Corporation (45 percent), AngloGold Ashanti (45 percent) and Société Minière de Kilo-Moto S.A. (SOKIMO) (10 percent) which represents the interest of the DRC government. AngloGold Ashanti and Barrick Gold Corporation each have a 50 percent interest in Kibali (Jersey) Limited which holds our effective 45% interest in Kibali. The Kibali gold mine is operated by Barrick Gold Corporation.
The Kibali gold project comprises ten permits, of which seven expire in 2029 and three in 2030. Those permits cover an area of approximately 1,836 km2 in the Moto goldfields.
Ghana
General laws relating to mining
Control of minerals and mining companies
The Constitution of Ghana as well as the Minerals and Mining Act, 2006 (Act 703) (GMM Act) provide that all minerals in Ghana in their natural state are the property of the State and title to them is vested in the President on behalf of and in trust for the people of Ghana, with rights of reconnaissance, prospecting, recovery and associated land usage being granted under licence or lease.
The grant of a mining lease by the Ghana Minister of Lands and Natural Resources (LNR Minister) upon the advice of the Minerals Commission is subject to parliamentary ratification unless the mining lease falls into a class of transactions exempted by the Ghanaian Parliament.
50
The LNR Minister has the power to object to a person becoming or remaining a controller of a company which has been granted a mining lease if the LNR Minister believes, on reasonable grounds, that the public interest would be prejudiced by the person concerned becoming or remaining such a controller.
Except as otherwise provided in a specific mining lease, all immovable assets of the holder of a mining lease vest in the State upon termination, as does all moveable property that is fully depreciated for tax purposes. Moveable property that is not fully depreciated is to be significantoffered to AngloGold Ashanti. the State at the depreciated cost. A holder must exercise his rights subject to such limitations relating to surface rights as the LNR Minister may prescribe.
In addition, AngloGold Ashanti could incur fines, penalties2019, Parliament passed the State Interests and Governance Authority Act, 2019 (Act 990) establishing the State Interests and Governance Authority (SIGA). The functions of SIGA include the oversight and administration of the State’s interests in state-owned enterprises, joint venture companies and other sanctions, environmental clean-up costs,entities in which the State has an interest. This applies to mining companies on account of the Government’s mandatory free-carried equity interest in mining companies as provided for under the GMM Act. However, the Government of Ghana does not have a free-carried interest in any of AngloGold Ashanti’s mines in Ghana.
Stability and third-party claimsdevelopment agreements
The GMM Act provides for personal injury or property or natural resources damages; suffer reputational damage;stability agreements as a mechanism to guarantee certain terms and conditions, mainly fiscal, to which a company’s operations are subject for a period of 15 years. Stability agreements are subject to ratification by Parliament. A development agreement, as provided for by the GMM Act, may be requiredmade available to install costly pollution control equipment ora mineral right holder with a proposed investment exceeding USD 500 million. The GMM Act also provides that the terms of a development agreement may contain stability terms as provided for in stability agreements. A development agreement is subject to modify or suspend operations,parliamentary ratification.
In January 2020, the Minerals Commission proposed certain amendments to the GMM Act, including, among other measures, the abolishment of development agreements and the shortening of stability agreements from a period not exceeding 15 years to a period of five years (with a possible extension of another five years). The Minerals Commission is currently engaging with stakeholders on these proposed amendments. Following this engagement, the Minerals Commission may present the proposed amendments to the LNR Minister who can then decide to submit a draft bill to Parliament. If such bill were to be adopted by Parliament, it would not apply retroactively. As a result, the proposed amendments will not have an impact on existing development agreements, including the Obuasi Development Agreement (as described below).
Ghana Stability Agreement
In 2004, AngloGold Limited and the Government of Ghana signed a stability agreement (Ghana Stability Agreement) governing certain aspects of the fiscal and regulatory framework under which the company would operate in Ghana for a period of 15 years following the implementation of the business combination between AngloGold Limited and Ashanti Goldfields Company Limited. Under the Ghana Stability Agreement, the Government of Ghana agreed, among other matters, to extend the term of the mining lease relating to the Obuasi mine until 2054 on terms existing prior to the business combination.
In June 2018, the Ghana Stability Agreement ceased to apply to the Obuasi mine as a result of actualthe parliamentary ratification of a new development agreement and a new tax concession agreement in relation to the mine (as described below). However, the Ghana Stability Agreement continued to apply to the Iduapriem mine until it expired in April 2019. Since then, AngloGold Ashanti (Iduapriem) Limited (AGA Iduapriem) no longer benefits from the Ghana Stability Agreement. Relevant engagements are currently ongoing between AGA Iduapriem and the Minerals Commission to obtain a new agreement for the Iduapriem mine.
Obuasi Development Agreement
AngloGold Ashanti (Ghana) Limited (AGA Ghana) negotiated a new development agreement in relation to the Obuasi mine (Obuasi DA) with the Government of Ghana. On 21 June 2018, Parliament ratified the Obuasi DA which contains stability terms as provided for in stability agreements.
The Obuasi DA confers the following rights and obligations on AGA Ghana with respect to the Obuasi mine:
•Stabilization of the fiscal and regulatory framework (except for enactments promoting the use of Ghanaian goods and services) for a period of 10 years with a potential of it being extended for five years;
•Confirmation of accounting currency to be US dollars;
•Right to hold up to 80 percent of proceeds received from exporting minerals in foreign currencies outside of Ghana in accordance with existing arrangements;
•Obligation to set up a “Community Trust Fund” for Obuasi funded at $2 per ounce produced;
•Obligation to give preference to materials and goods made in Ghana as well as services provided by Ghanaians, entities incorporated or alleged violationsformed in Ghana and entities owned and controlled by Ghanaians;
•Obligation to give preference to Ghanaian skills where they are available;
•Obligation to employ high standards of safety; and
•Right to peaceful enjoyment and protection against expropriation.
51
Obuasi Tax Concession Agreement
The fiscal terms which will ordinarily form part of a single stabilisation document were separated from the Obuasi DA. Hence a separate tax concession agreement in relation to the Obuasi mine (Obuasi TCA) was signed with the Government. On 21 June 2018, Parliament ratified the Obuasi TCA with a concession period until 31 December 2027.
The key terms of the Obuasi TCA are as follows:
•Corporate Income Tax to be 32.5 percent or liabilitiessuch lower rates as may be fixed by law (current statutory rate is 35 percent);
•Unutilised capital allowances carried forward by AGA Ghana which relate to the period before the effective date of the Obuasi TCA which have not already been utilised for the purposes of calculating taxable income shall continue to be carried forward until 31 December 2020;
•For the concession period, existing tax losses and new tax losses as well as a special concession to carry forward capital allowances to be converted into tax losses as at the end of 2020, will apply to AGA Ghana (whoever is the owner of AGA Ghana and whether or not AGA Ghana was to enter into a joint venture in respect of the Obuasi mine);
•Until 31 December 2021, exemptions of certain items from Import Duty;
•For the concession period, exemption of the following transactions from Capital Gains Tax:
•an issue of shares by a publicly listed company which holds a direct or indirect interest in AGA Ghana in connection with a raising of finance, an acquisition or a reorganization or an issue of shares by a company in connection with a new listing;
•transfers of shares in any publicly listed company which holds a direct or indirect interest in AGA Ghana other than a transfer of shares which results in a third party holding more than 35 percent of the shares in the listed company; and
•a reorganization of a company which holds a direct or indirect interest in AGA Ghana where following the reorganization the shareholders are substantially similar to those shareholders of the ultimate parent entity immediately prior to the transaction;
•For the concession period, non-application of section 62(1) of the Income Tax Act, 2015 (Act 896) in relation to change in underlying ownership under EHSthe following circumstances:
•a joint venture in relation to Obuasi gold mine;
•an issue of shares by a publicly listed company which holds a direct or indirect interest in AGA Ghana in connection with a raising of finance, an acquisition or a reorganization or an issue of shares by a company in connection with a new listing;
•transfers of shares in any publicly listed company which holds a direct or indirect interest in AGA Ghana other than a transfer of shares which results in a third party holding more than 50 percent of the shares in the listed company; and
•a reorganization of a company which holds a direct or indirect interest in AGA Ghana where following the reorganization the shareholders are substantially similar to those shareholders of the ultimate parent entity immediately prior to the transaction;
•For the concession period, sliding scale royalty rate ranging from 3 percent to 5 percent for a price ranging from $1,300 up to $2,000 and above per ounce instead of the current flat rate of 5 percent;
•Exemption from the payment of VAT on items imported under the Import Duty List up to 31 December 2023; and
•Entitlement to a refund of VAT credit at the pre-production stage notwithstanding that AGA Ghana will not meet certain conditions for qualifying for refunds.
Corporate regulation
Parliament passed the new Companies Act, 2019 (Act 992) which repeals the Companies Act, 1963 (Act 179). Act 992 introduced amendments to the regulation of companies in Ghana and establishes the Office of the Registrar of Companies as an autonomous office. As a general matter, Act 992 maintained the provisions of Act 179. It, however, introduces stricter requirements for persons who are to be appointed as directors of a company as well as for company secretaries. Companies are also required to appoint new external auditors every six years. Recent directives impose that, in case of rotation of auditors, a mandatory cooling-off period of at least six years should be observed. To ensure a smooth transition, companies are required to effect this change at their next scheduled annual general meeting, but no later than 1 August 2022.
A company is also not required to have bylaws or “regulations” as was the case under Act 179. Instead, a company may opt to have a registered constitution. Nevertheless , it is expected that the current regulations for AGA Ghana and AGA Iduapriem will be redrafted and filed at the Companies Registry. Further, a company is not required to have specific objectives as prescribed under Act 179. The implication of this change is that a company can carry out any type of business unless otherwise specifically stated in the company’s constitution.
52
Government’s Golden Share
Section 60(1) of the GMM Act provides that the Government of Ghana can require a mining company to issue for no consideration to the Republic of Ghana a special share (Golden Share) by notice in writing to such mining company. A Golden Share may only be held by or transferred to a Minister of the Government or any person acting on behalf of such Government and authorised in writing by such Minister. The Government of Ghana holds a Golden Share in AGA Ghana and the Obuasi DA confirms that the Government’s rights with respect to its Golden Share apply only in respect of AGA Ghana’s assets and operations in Ghana.
The following matters require, and will not be effective without, the written consent of the holder of the Golden Share:
•any amendment to or removal of the relevant provisions of the AGA Ghana Regulations setting out the rights and restrictions attaching to the Golden Share;
•the voluntary winding-up or voluntary liquidation of AGA Ghana;
•the redemption of or purchase by AGA Ghana of the Golden Share;
•the disposal of any mining lease held by AGA Ghana or any subsidiary of AGA Ghana; and
•any disposal by AGA Ghana (other than any disposal in the ordinary course of business of AGA Ghana) which, alone or when aggregated with any disposal or disposals forming part of, or connected with, the same or a connected transaction, constitutes a disposal of the whole or a material part of the assets of the AGA Ghana group taken as a whole.
Upon a return of assets in a winding-up or liquidation of AGA Ghana, the holder of the Golden Share is entitled to the sum of one Ghanaian cedi (GHS 1.0) in priority to any payment to other members, but the Golden Share confers no further right to participate in the profits or assets of AGA Ghana . The Golden Share carries no right to any dividend or any right to participate in any offer of securities to existing shareholders or in any capitalisation issue. The holder of the Golden Share is entitled to attend any general meeting of the members or any separate meeting of the holders of any class of shares. Furthermore, the holder of the Golden Share may require AGA Ghana to redeem the Golden Share at any time in consideration of the payment to such holder of one Ghanaian cedi (GHS 1.0).
Tax laws relating to mining
Fiscal regime
Currently, the main tax laws in Ghana include the following acts and regulations:
•Income Tax Act, 2015 (Act 896) (as amended) and Income Tax Regulations, 2016 (L.I. 2244);
•Customs Act, 2015 (Act 891) (as amended) and Customs Regulations, 2016 (L.I. 2248);
•Value Added Tax, 2013 (Act 870) (as amended) and Value Added Tax Regulations, 2016 (L.I. 2243); and
•Revenue Administration Act, 2016 (Act 915).
Various amendments have been made to these tax laws over the years. For example, recently, the Revenue Administration (Amendment) Act, 2020 (Act 1029) amended the Revenue Administration Act, 2016 (Act 915) to establish an Independent Tax Appeals Board to hear and determine appeals against tax decisions made by the Commissioner-General.
VAT
The provision of goods and services is liable to Value Added Tax (VAT) at a revised rate of 12.5 percent. In addition, there are separate levies, including a 2.5 percent National Health Insurance Levy and a 2.5 percent Ghana Education Trust Fund Levy.
Income taxes
In November 2015, Parliament passed the Income Tax Act, 2015 (Act 896) (ITA) which repealed the Internal Revenue Act, 2000 (Act 592), as amended, and became effective from 1 January 2016. The ITA ring fences and taxes income derived from mining operations at the rate of 35 percent. For the purpose of ascertaining the income of a person for taxation (including capital gains), each separate mineral operation is treated as an independent business and taxed accordingly, preventing mining businesses from deducting or setting off costs from one mining area with another’s income. The Obuasi TCA for AGA Ghana provides for a stabilised income tax rate of 32.5 percent. Pursuant to the Ghana Stability Agreement, the ITA did not apply to AGA Iduapriem until April 2019. Following its expiration, AGA Iduapriem currently pays income tax at the rate of 35 percent.
Ground rent (mineral concession rent)
The Fees and Charges (Amendment) Instrument, 2015 (L.I. 2208) was passed by Parliament on 23 December 2015 and fixed, among other things, the payment of ground rent by mining companies at GHS 15 cedis per acre per annum.
53
AGA Ghana is paying $670 (GHS 3,705 cedis) per km2 per annum for all the AGA Ghana leases. The Obuasi DA protects AGA Ghana from any increase in ground rent for the duration of that development agreement. AGA Iduapriem is also paying $670 (GHS 3,705 cedis) per km2 per annum for all the AGA Iduapriem leases.
Royalties
Under the Minerals and Mining (Amendment) Act, 2015 (Act 900), the Minister will prescribe the royalty rate payable and the manner of payment by passing a Legislative Instrument or other subsidiary legislation. The current royalty rate amounts to 5 percent.
The company is required to pay ground rent to the Government of Ghana (as described above) as well as such other fees as are prescribed by legislation, including royalties on timber felled within the lease area.
Minerals Income Investment Fund
The Minerals Income Investment Fund Act, 2018 (Act 978), which was amended by the Minerals Income Investment Fund (Amendment) Act, 2020 (Act 1024), establishes a fund to receive mineral royalties and related income from mineral rights holders and also provides for the disbursement and management of such royalties and related income. The Minerals Income Investment Fund also acts as a special purpose vehicle holding the Ghanaian Government’s carried interests in mining companies. No additional burdens are imposed on mining companies as the effect of this legislation is merely to substitute the legal person holding the Government’s carried interests.
Environmental laws relating to mining
In general, environmental laws and regulations.regulations in Ghana derive from the Constitution which imposes a duty on both the State and others to take appropriate measures to protect and safeguard the natural environment. Mining companies are required, under the GMM Act, Environmental Assessment Regulations, 1999 (L.I. 1652) and Water Use Regulations, 2001 (L.I. 1692), to obtain all necessary approvals from the Environmental Protection Agency (Ghana EPA), a regulatory body established under the Environmental Protection Agency Act, 1994 (Act 490), and, in appropriate cases, the Water Resources Commission and/or the Ghanaian Minerals Commission before undertaking mining operations. The Minerals and Mining (Health, Safety and Technical) Regulations, 2012 (L.I. 2182) also impose further obligations to obtain the necessary permits from the Inspectorate Division of the Ghana Minerals Commission for the operation of mines. The GMM Act also requires that mining operations in Ghana comply with all laws for the protection of the environment. Compliance with the relevant laws are enforced by a regime of sanctions, including imposition of fines and in some cases a term of imprisonment.
As part of the Ghanaian environmental laws and regulations, mining operations are required to undergo an environmental impact assessment process to obtain an environmental permit prior to commencing operations. Environmental Management Plans must be submitted to the Ghana EPA within 18 months after issuance of the environmental permit and then every three years thereafter. The plan must include details of the likely impacts of mining operations on the environment and local communities, as well as a comprehensive plan and timetable for actions to mitigate and remediate any adverse effects of the mining operations. Approval of the management plan results in the issuance of an environmental certificate.
In June 2014, the Ghana EPA and the Minerals Commission circulated draft Mining and Environmental Guidelines to all mining companies for comment. The guidelines concern environmental management, reclamation, closure requirements. In February 2021, the draft Mining in Forest Reserves Regulations were also sent to members of the Ghana Chamber of Mines for review. The Mining Community Development Scheme, which directly sponsors socio-economic development in communities in which mining operations take place or which are affected by mining activities, has since been established pursuant to the Minerals Development Fund Act, 2016 (Act 912).
Illegal and unsustainable mining practices
The Multilateral Mining Integrated Project (MMIP) is a 5-year project launched by the Government of Ghana in 2017 to address illegal and unsustainable mining practices in Ghana. The MMIP “combines a Legislation, Enforcement, Civil, Integrated and Technological Approach (LECITA) as a sustainable and structured yet regimented conjoint concept” to combat illegal mining. The MMIP involves (i) reviewing and enforcing the legal and regulatory regime of the small scale mining sector, (ii) reclaiming and rehabilitating degraded lands, (iii) dredging silted estuaries and waterways, (iv) implementing social interventions to facilitate livelihood creation in mining communities, (v) adapting technology to increase mining efficiency, processing, environmental protection and monitoring activities, and (vi) building the capacity of artisanal and small-scale miners and regulatory institutions.
In addition, other initiatives have been undertaken to combat illegal mining. For example, the Minerals and Mining (Amendment) Act, 2015 (Act 900) makes provision for the confiscation of the equipment of illegal miners and, as a result of recent illegal mining activities, the GMM Act was amended to increase penalties for illegal mining and expressly criminalise the aiding and abetting of illegal mining activities. The prescribed minimum sentence for illegal mining is now 15 years and maximum of 25 years for foreigners who engage in illegal mining.
54
Foreign exchange, export and other rules
Retention of foreign earnings
AngloGold Ashanti’s operations in Ghana are permitted to retain 80 percent of their foreign exchange earnings in an offshore foreign exchange account. In addition, the company has permission from the Bank of Ghana to retain and use US dollars, outside of Ghana, to fulfil payment obligations to the company’s hedge counterparties which cannot be met from the cash resources of its treasury company.
On 4 February 2014, the Bank of Ghana issued new directives as part of measures to streamline the collection and repatriation of export proceeds to Ghana. These directives included an instruction to all banks and authorised dealers to, within 5 working days of receipt of export proceeds, convert the proceeds into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 percentage in points (pips). Exporters with retention accounts were to continue to operate these accounts in accordance with their retention agreements. Retention proceeds which were sold to the banks were to be converted into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 pips. It further advised that offshore foreign exchange transactions by resident companies, including exporters, were strictly prohibited and exporters were to ensure that all export proceeds are repatriated in full. Failure to comply with applicable EHS lawsthe provisions attracts penalties including pecuniary sanctions, jail terms, suspension and regulations mayrevocation of the operating licence as applicable.
Following engagement with relevant stakeholders, the Bank of Ghana issued another notice clarifying that the transfer of foreign exchange to meet external payment obligations remains permissible for transactions such as:
•redemptions and coupon payments on bonds held by non-residents;
•investment income, technology and management transfer entitlements, expatriate emoluments, and other incentive packages and overseas commitments under provisions in various legislation and legislative instruments such as the GMM Act, and the Technology Transfer Regulations, 1992 (L.I.1547); and
•other outward payments for imports of goods and services.
The notice also resultstated that all balances in Foreign Currency Accounts (FCAs) and Foreign Exchange Accounts (FEAs) will continue to be held in foreign currency and will not be converted into Ghana cedis. External transfers of up to $10,000 per annum without documentation from FEA and FCA are still permitted. Balances held in FEAs and FCAs continue to remain available for all legitimate external transactions.
The Bank of Ghana on 9 August 2014 further revised the rules on foreign exchange operations, effectively reversing the initial directives controlling transactions in foreign exchange. The key details are as follows:
•Exporters shall continue to repatriate in full export proceeds in accordance with the terms agreed between the trading parties. Such proceeds shall be credited to their FEAs and converted on a need basis;
•FEAs and FCAs will continue to be opened and operated as they were before the notices of 4 February 2014;
•Except for transfers from FEA to FCA which are still prohibited, all other transfers between accounts are permitted;
•FCAs shall be fed only with unrequited transfers such as transfers from abroad for investment or embassy transfers;
•FEAs shall be fed with foreign exchange generated from activities in Ghana such as proceeds from exports of goods and services; and
•The threshold for transfers abroad without initial documentation remains at $50,000.00.
Existing measures that were not amended by this notice continue to remain in force. The Bank of Ghana reiterated that the Ghana cedi remains the sole legal tender in Ghana. Therefore, pricing, advertising, invoicing, receiving, and making payments for goods and services should be done in Ghana cedis, unless otherwise authorised by the Bank of Ghana.
Rules regarding the export of gold and diamonds
The Bank of Ghana introduced new measures to regulate and monitor the export of gold and diamonds from Ghana in 2015. From 15 September 2015, all exports of gold and diamonds must be carried out through the Precious Minerals Marketing Company Ltd (PMMC), except where the exporter is the holder of a licence that permits it to export directly. The Ghana Revenue Authority (Customs Division) only permits gold to be exported by a licensed gold exporter who has a completed Form FEX A4 bearing Bank of Ghana’s embossment. The export measures do not apply to AngloGold Ashanti because the company holds a licence granted by the LNR Minister to sell and export its production.
The Bank of Ghana issued a notice (Notice No. BG/GOV/SEC/2016/02) which, among other things, allows mining companies to sell the portion of foreign exchange receipts from export that was earmarked for surrender to the Bank of Ghana directly to the commercial banks.
In November 2016, the Ministry of Lands and Natural Resources issued a ministerial directive appointing the PMMC as designated laboratory for assaying in Ghana. The directive requests all persons holding export licenses for gold to submit all gold
55
to be exported to the PMMC for assay before export. Mining businesses, including AngloGold Ashanti, acting through the Ghana Chamber of Mines were opposed to this directive due to its potential negative impact on mining companies in the suspensionregion. As a result, the Chamber initiated proceedings to reverse or revocationmodify the directive. Following discussions in respect of the mining industry’s concerns, the Chamber and Government agreed on the modalities for implementing the national assaying policy and it was introduced in February 2018 following a one-month pilot among certain mining companies. A final document for the implementation of the program will be executed once the Chamber and the PMMC address a few outstanding issues regarding assaying methodologies.
Localisation and local participation policy
Mining companies must submit a detailed programme for the recruitment and training of Ghanaians with a view to achieving “localisation”, which is the replacement of expatriate personnel in a company’s Ghanaian operations by Ghanaian personnel. In addition, mining companies must give preference to Ghanaian products and personnel, to the maximum extent possible, consistent with safety, efficiency and economies. The Minerals and Mining (General) Regulations, 2012 (L.I. 2173) give further details on the localisation policy. On 15 October 2020, the Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431) were adopted in order to expand the scope of local content requirements in the mining industry. The Minerals Commission is tasked to publish a local procurement list of goods and services that must have Ghanaian content. Mining companies must also submit a five-year procurement plan to the Minerals Commission. Technical and engineering services generally must be provided by Ghanaian-owned companies subject to limited exceptions. Only the services of financial institutions incorporated in Ghana are to be procured and not less than 25 percent of transactions are required to be undertaken with financial institutions owned by Ghanaian citizens. Other services such as haulage, security, contract mining services for small-scale mining operations and supply of fuel are required to be provided by Ghanaians. Furthermore, if the planned capital expenditures of a holder of a mineral right exceeds certain limits set by the LNR Minister, it is required to list at least 20 percent of its equity on the Ghana Stock Exchange within five years after commencement of mining operations. In addition, there are also restrictions on the number of expatriates that can be employed by mineral rights holders and mine support service providers in a bid to enhance the participation of Ghanaians in the mining industry.
Imposition of restrictions
In March 2020, the Imposition of Restrictions Act, 2020 (Act 1012) was enacted to put in place measures to address the COVID-19 pandemic. It gives the President power to impose restrictions on persons in the event of an emergency, disaster or similar circumstance to ensure public safety, public health and protection. Numerous executive instruments have been issued in exercise of this power conferred on the President pursuant to this legislation to manage the pandemic.
AngloGold Ashanti’s rights and permits
Obuasi
The current mining lease for the Obuasi area was granted by the Government of Ghana on 5 March 1994. It grants mining concessions to land with an area of approximately 338 km2 in the Amansie East and Adansi West districts of the Ashanti region for a term of 30 years from the date of the agreement. In addition, a mining lease over an adjacent 140 km2 was also granted, resulting in the total area under the mining lease increasing to 474 km2. The Government of Ghana agreed to extend the term of the mining lease relating to the Obuasi mine until 2054. The mining lease was formally ratified by Parliament on 23 October 2008. On 3 March 2016, the Minerals Commission approved AGA Ghana’s application to surrender approximately 273.54 km2 of the area to the Government of Ghana, reducing the lease areas to 201.46 km2. The remaining parcel of land that will be subject to the mining lease is situated within various villages and townships in the region but excludes the municipality of Obuasi. On 15 January 2021, the Minerals Commission approved AGA Ghana’s application to relinquish a further 60.24 km2 of lease area, thereby reducing the lease areas to 141.22 km2, in order to avoid encroachment and illegal mining activities within the mine’s footprint while maintaining its social license to operate.
AGA Ghana is not required to pay annual mineral right fees as the AGA Ghana leases were granted prior to the enactment of the GMM Act which imposes such fees. The GMM Act provides that leases granted under laws subsisting immediately before the coming into force of the GMM Act shall continue to be governed by such pre-existing laws. As a result, the AGA Ghana leases are still regulated by the Minerals and Mining Law, 1986 (PNDCL 153), as amended (notwithstanding the repeal of PNDCL 153 by the GMM Act).
Iduapriem
The Iduapriem mine operates under four different mining leases: the Iduapriem Mining Lease (36.47 km2), the Ajopa Mining Lease (46.12 km2), the Teberebie Mining Lease (28.53 km2) and the Ajopa South Mining Lease (28.10 km2). Prior to all four mining leases expiring in 2018 and 2019, AGA Iduapriem submitted all relevant documents to apply for renewal of the leases. On 17 February 2020, the mining leases were extended for a further period of 15 years and will now expire in 2035. The Ajopa Mining Lease and the Ajopa South Mining Lease were ratified by the Ghanaian Parliament on 15 July 2020. The Iduapriem Mining Lease and the Teberebie Mining Lease were both ratified on 22 December 2020.
56
AGA Iduapriem is required to pay an annual mineral right fee of $178,000 with respect to the Iduapriem Mining Lease, $136,000 with respect to the Teberebie Mining Lease, $134,000 with respect to the Ajopa South Mining Lease and $220,000 with respect to the Ajopa Mining lease.
Guinea
General laws relating to mining
In Guinea, all mineral substances are the property of the State. Mining activities are regulated by Law L/2011/006/CNT dated 9 September 2011 as amended by Law L/2013/053/CNT dated 8 April 2013 and promulgated by Decree D/2013/075/PRG/SGG dated 17 April 2013 (together, the Guinea Mining Code).
The Guinea Mining Code is implemented by various decrees and orders, including Decree D/2014/015/PRG/SGG adopting a model of mining convention, dated 17 January 2014, Order A/2016/1584/MMG/SGG related to the administration’s capacities for the management of integrated mining projects (PARCA-GPI) and its steering committee, dated 6 June 2016, Decree D/2016/163/PRG/SGG on the national agency for the development of mining infrastructures (ANAIM), dated 13 June 2016, and Decree D/2016/215/PRG/SRG on the appointment of executives to the Ministry of Mines and Geology, dated 8 July 2016.
In 2017, Decree D/2017/285/PRG/SGG was adopted, which sets forth the conditions for the constitution and management of the Local Development Fund (Fodel), as well as Joint Order A/2017/6326/MMG/MATD/SGG, which sets forth the conditions for the use, management and control of the Fodel. Together, these set forth the use of the mining companies’ financial contribution to the development of the local communities and the rules applying to the Fodel, which was created under the Guinea Mining Code. In addition, Joint Order AC/2017/3228/MATD/MMG/SGG, issued by the Ministry of Territorial Administration and Decentralisation and the Ministry of Mines and Geology and dated 21 July 2017, updates the act on the establishment, attribution and functioning of the coordination committees in mining communities (CCLMS). The main purpose of the CCLMs, in which all concerned mining companies are represented, is to prevent and settle disputes that may arise in mining communities. On 13 July 2018, a Joint Order A/2018/5212/MEF/MMG/MB/MATD/SGG was issued, which regulates the use, management and monitoring of the resources allocated to local authorities pursuant to article 165 of the Guinea Mining Code. In 2019, an inter-ministerial committee was created to supervise and control the Fodel through the adoption of Joint Order AC/2019/089/MMG/MATD/SGG setting out the conditions for the constitution, powers and management of said inter-ministerial committee.
On 16 June 2020, a new procedure for the export of gold by mining companies was enacted through the adoption of Decree D/2020/113/PRG/SGG, which sets out, amongst other things: (i) when the industrial production tax referred to in article 161-1 of the Guinea Mining Code shall be paid, and (ii) the process to be followed to export gold bullion.
AngloGold Ashanti’s rights and permits
The right to undertake mining operations in Guinea can only be obtained by one of the following mining titles: surveying permit, small-scale mining licence, exploration licence, mining licence or mining concession.
The group’s Guinean subsidiary, Société AngloGold Ashanti de Guinée S.A. (SAG), has title to the Siguiri mine in the form of a mining concession, granted by virtue of Presidential Decree D/97/171/PRG/SGG, dated 4 August 1997, for a period of 25 years (Mining Concession). The Mining Concession was originally covered by a mining convention entered into with the Republic of Guinea in 1993 and amended in 2005. On 28 June 2016, SAG and the Government of Guinea concluded a revised and consolidated mining convention (Revised Convention de Base) which encompasses a renewal of the term of the original mining convention and other amendments necessary to support an expansion project to extend the life of the Siguiri mine (the Expansion). In compliance with the provisions of the Guinea Mining Code, the Revised Convention de Base was ratified by the Guinean National Assembly (Law L/2016/N°067/AN dated 30 December 2016, promulgated by Decree D/2017/015/PRG/SGG dated 24 January 2017), submitted to the Guinean Supreme Court which rendered a favourable opinion (Judgement N°AC 005 dated 16 January 2017), and ratified by the President of the Republic of Guinea (Decree D/2017/021/PRG/SGG dated 24 January 2017). It replaced the original mining convention and became effective on 24 January 2017.
Key elements of the Revised Convention de Base include the following:
•a duration of 25 years, expiring 23 January 2042, subject to further renewal if mining operations continue; the term of the Mining Concession is aligned with the term of the Revised Convention de Base such that the Mining Concession will be renewed as long as the Revised Convention de Base remains in force;
•SAG’s operations remain governed by the 1995 Guinea Mining Code (the prior mining code) and are only subject to the provisions of the Guinea Mining Code to the extent they are expressly set out in the Revised Convention de Base;
•the stability of the customs and tax regime is guaranteed for the entire initial term of the Revised Convention de Base, and subject to certain conditions being met, any renewal period(s);
•the Republic of Guinea holds a 15 percent free-carried/non-contributory interest;
•the Republic of Guinea is entitled to a royalty on gold of 5 percent based on a spot gold price as per LBMA fixing (PM) up until the date of steady state commercial production of the first phase of the Expansion, after which the royalty rate applicable to gold will vary depending on threshold prices as per LBMA fixing (PM), namely: 3 percent if the gold price is USD 1,300 or less, 5 percent, if above USD 1,300 and up to USD 2,000 and 7 percent if above USD 2,000;
57
•SAG benefits from 5-year income tax holiday from the beginning of steady state commercial production of the first phase of the Expansion, after which the income tax rate is set at 30 percent;
•a local development tax of 0.4 percent is payable on the sale price for gold and silver received by SAG up until 31 December 2027, after which it will be increased to 0.6 percent;
•salaries of expatriate employees are subject to a 10 percent income tax;
•goods imported into Guinea for purposes related to the construction and commissioning of the first phase of the Expansion are exempt from all customs taxes and duties; and
•SAG is committed to adopting and progressively implementing a plan for the effective rehabilitation of the mining areas disturbed or affected by its operations.
The Mining Concession covers an area divided into four blocks totaling approximately 1,495 km2. SAG has the exclusive right to explore and mine in any part of the concession area for the duration of the Revised Convention de Base. The Revised Convention de Base also grants SAG the option to secure certain land rights over additional areas currently covered by exploration permits, but to which SAG may need access for purposes of establishing roads or storage of tailings.
The Revised Convention de Base is subject to early termination if the parties formally and expressly agree to it, if the last of the mining title held by SAG expires or is relinquished without any renewal application having been filed, if all project activities are voluntarily suspended for a continuous period of 12 months or are permanently abandoned by SAG, or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction.
Mali
General laws relating to mining
The mining industry in Mali is primarily regulated by Ordinance No. 2019-022/P-RM dated 27 September 2019 containing the new mining code of the Republic of Mali (2019 Mali Mining Code) and Decree No. 2020-0177/PT-RM dated 12 November 2020 implementing the 2019 Mali Mining Code. On 8 December 2020, Decree No. 2020-0288/PM-RM enacted the new model mining convention referred to in Decree No. 2020-0177/PT-RM.
The 2019 Mali Mining Code applies to the mining operations previously carried out by AngloGold Ashanti entities in Mali (as further described below) except with respect to the validity, scope and duration of their exploitation permits and the provisions on tax and customs regime contained in some jurisdictions, ourtheir mining conventions for their remaining duration. In this regard, the transitory rules of the 2019 Mali Mining Code specify that mining conventions in force remain valid for their remaining term and their holders continue to benefit from the stability of the tax and customs regime set out therein.
Exploration and prospecting activities are carried out under exploration authorisations (autorisation d’exploration) or exploration permits (permis de recherche). Exploration authorisations and exploration permits give their holder the exclusive right to carry out exploration activities over a given area. Exploration authorisations are granted for a non-renewable period of three months, while exploration permits are granted for a period of three years renewable twice for additional 3-year periods. Applications for exploration authorisations and exploration permits must contain various documents attesting to the financial and technical capacity of the applicant as well as a detailed works and costs programme. Exploration authorisations are granted by the Mining Administration (Administration chargée des Mines) while exploration permits are granted by Ministerial Order.
A large scale permit exploitation permit (permis d’exploitation de grande mine) is required to mine a given concession. AngloGold Ashanti’s abilitydeposit located within the area of an exploration permit. The large scale exploitation permit grants an exclusive right to obtainexploit the named substances and maintainproceed with the processing and commercialisation of the substances extracted within its perimeter. Large scale exploitation permits are granted for a maximum period of 12 years renewable for 10 year-periods until depletion of the deposits. The large scale exploitation permit is granted only to the holder of an exploration permit and other approvalscovers only the area governed by the exploration permit. An application must be submitted to the Mining Administration (Administration chargée des Mines) and must contain various documents attesting to successfully operatethe financial and technical capacity of the applicant, a feasibility study, a detailed environmental study in particular communities may be adversely impacted by real or perceived effectsrespect of the impact of the project on the environment, or human healthan environmental permit, a closure and safety associated with AngloGold Ashanti’s or other mining companies’ activities.rehabilitation plan as well as a community development plan. The large scale exploitation permit is granted by decree of the Head of Government. As soon as the large scale exploitation permit is granted, the permit holder must incorporate a company under the laws of Mali. The permit holder will assign the large scale exploitation permit for free to this company. The State will have a 10 percent free-carried interest in the company. This interest will be converted into priority shares and the State’s participation will not be diluted in case of an increase in capital. In addition, unknown environmental hazards may exist at the company’s propertiescompany is required to ensure that private Malian investors are offered the possibility to acquire 5 percent of their capital.
All mining titles mentioned above (save for the exploration authorisation) require an establishment convention (convention d’établissement) to be signed by the State and the titleholder defining their rights and obligations, the duration of which may have been caused by previous owners or operators.is 20 years.
58
AngloGold Ashanti’s rights and permits
Historically, AngloGold Ashanti had interests in the Morila, Sadiola and Yatela gold mines, all of which were governed by establishment conventions covering exploration, mining, treatment and processing operations are heavily dependent upon accessmarketing in a comprehensive document. These documents include general provisions regarding exploration (work programme, fiscal and customs framework) and exploitation (formation of a local limited liability mining company, State interest, fiscal and customs framework governing construction and exploitation phases, exchange controls, marketing of the product, accounting regime, training programmes for local labour, protection of the environment, reclamation, safety, hygiene and dispute settlement).
AngloGold Ashanti together with its joint venture partner Barrick Gold Corporation completed the sale of their entire interests in Société des Mines de Morila S.A., the company operating the Morila gold mine in Mali, to substantial volumesFirefinch Limited (previously named Mali Lithium Limited) on 10 November 2020. At the time of water required for such operations. Typically, water-use permitsthe sale, mining of ore had ceased at the Morila gold mine.
AngloGold Ashanti together with its joint venture partner IAMGOLD Corporation completed the sale of their entire interests in Société d’Exploitation des Mines d’Or de Sadiola S.A., the company operating the Sadiola gold mine in Mali, to Allied Gold Corp on 30 December 2020. At the time of the sale, mining of ore had ceased at the Sadiola gold mine.
In April 2017, Société d’Exploitation des Mines d’Or de Yatela S.A. (Yatela), the company operating the Yatela gold mine, began the implementation of a closure plan in order to relinquish the property. In February 2019, AngloGold Ashanti and its joint venture partner IAMGOLD Corporation announced an agreement to sell each of their 40% interests in Yatela to the Government of Mali, which holds the remaining 20% interest. The transaction is subject to the fulfilment or waterwaiver of a number of conditions precedent and AngloGold Ashanti remains committed to its completion despite recent political instability and related events in Mali which have delayed completion of the sale from the originally anticipated timeline. Yatela’s exploitation permit covers approximately 212 km2. Yatela has a 30-year permit which expires in 2030.
Tanzania
General laws relating to mining
Tanzania Mining Act and Tanzania Mining Regulations
Mineral rights in each country impose limitsthe United Republic of Tanzania are principally governed by the Mining Act, 2010 (No. 14) (Tanzania Mining Act) as amended in 2017 by the Written Laws (Miscellaneous Amendments) Act, 2017 (No. 7) and which was revised and published by the Attorney General of Tanzania on 30 October 2018 as the quantityMining Act, Chapter 123 (R.E. 2018), and the Mining Regulations, 2010 (Tanzania Mining Regulations), as amended in 2018, which include: Mining (Mineral Beneficiation) Regulations, 2018 as amended in 2019; Mining (Minerals and Mineral Concentrates Trading) Regulations, 2018 as amended in 2019; Mining (Radioactive Minerals) Regulations, 2018; Mining (Local Content) Regulations, 2018 as amended in 2019; Mining (Geological Survey) Regulations, 2018; Mining (Audit and Inspection of water that can be extracted from certain sourcesRecords) Regulations, 2018; and require, amongMining (Designated Minerals Certification) Regulations, 2019. Other regulations are: Mining (Environmental Protection For Small Scale Mining) Regulations, 2010; Mining (Safety, Occupational Health and Environmental Protection) Regulations, 2010; Mining (Mineral and Gem Houses) Regulations, 2019; Mining (Mining Shareholding and Public Offering) Regulations, 2016 as amended in 2017; Mining (Diamond Trading) Regulation, 2019; Natural Wealth and Resources (Permanent Sovereignty) Code of Conduct for Investors in Natural Resources Regulations, 2020 (Permanent Sovereignty Regulations); and The Natural Wealth Contracts (Review and Re-Negotiation of Unconscionable Terms) Regulations, 2020. The application of the Code of Conduct under the Permanent Sovereignty Regulations extends to employees, agents, suppliers and consultants and requires them to comply with other things, that wastewater from mining operations meet certain water quality criteria upon discharge. Water supply, qualitybinding instruments and usage are areasdecisions made based on such instruments, in addition to policies, laws and regulations. The Permanent Sovereignty Regulations make it mandatory to seek the advice of concern globally, but are particularly significant for operations in Brazil, Ghana and South Africa, and for exploration projects in Colombia, where there is significant potential environmental and social impact and a high levelan office bearer or the office of stakeholder scrutiny. Any failure to secure access to suitable water supplies, or achieve and maintain compliance withAttorney General, if the requirements of the permitsCode, provisions of the Mining Act or licenses, could resultother instruments relating to natural wealth and resources become ambiguous, unclear or in curtailmentconflict resulting into uncertainty. Further, the Code of Conduct requires investors to conduct periodic reviews in respect of their compliance with such legislation in order to prevent the occurrence of matters prohibited by the laws of Tanzania. The Code also requires every investor to sign and submit an integrity pledge.
The Tanzania Mining Act and the Tanzania Mining Regulations came into force in November 2010 followed by amendments to the Tanzania Mining Act in 2017 and subsequent amendments to the Tanzania Mining Regulations in 2018 and 2019.
Amendments of the Tanzania Mining Act and the Tanzania Mining Regulations
As mentioned above, the Tanzania Mining Act was amended in 2017 followed by an amendment of the Tanzania Mining Regulations in 2018 and 2019 and, together with an Executive Order introducing, introduced the following:
•Dissolution of the Tanzania Minerals Audit Agency whose functions and powers have now been transferred to the Geological Survey of Tanzania (GST);
•Dissolution of the Mining Advisory Board and introduction of the Tanzania Mining Commission. The functions and powers of the Mining Advisory Board have been taken over by the Mining Commission, including the functions of the Commissioner for Minerals. However, the Mining Commission has been made responsible for matters related to auditing and monitoring of
59
mineral production in Tanzania. The Mining Commission has powers to audit quality and quantity of mineral produced and exported by mining entities, financial records of mining entities for the purposes of tax assessments, and environmental management expenditures of the mining entities for the purpose of assessment of compliance to the mine closure plan. Mineral rights holders were required to submit all geological information in their possession to the GST;
•A local content requirement for procurement of goods and services: the Tanzania Mining Act requires that mining companies must give: (i) first consideration to good and services provided or suspensionmanufactured in Tanzania where they meet mining industry specifications (established by the Standards Authority / internationally acceptable standards), (ii) first consideration for employment to qualified Tanzanians, and (iii) adequate provision for on-the-job training of productionTanzanians. Specific minimum local content thresholds are specified in Schedule 1 to the Tanzania Mining Regulations. These will be determined by the Mining Commission alongside the work programme. The relevant Minister may prescribe additional minimum local content thresholds;
•To qualify for holding a Mining Licence in Tanzania, 5 percent of a licensee’s equity must be held by Tanzanians, with 80 percent of its managerial positions held by Tanzanians and 100 percent of other positions held by Tanzanians, in addition to the shareholding of the Government of Tanzania pursuant to Section 10 of the Tanzania Mining Act (i.e. free-carried interest). This amount is determined, and may be varied, by the relevant Minister;
•Establishment of the Local Content Committee (LC Committee) which will oversee the implementation of the Tanzania Mining Regulations and which is composed of a member of the Mining Commission, the Director of Labour and Employment, a member of the Tanzania Private Sector Foundation, the CEO of the Geological Survey of Tanzania, the head of legal services at the affected operation. IncidentsMinistry for Minerals and the Executive Secretary of water pollution or shortage can, in extreme cases, leadthe Mining Commission. The LC Committee sets minimum standards for local content plans and reports to community protestthe Mining Commission;
•Establishment of various Tanzanian bodies, including the (i) Geological Survey, (ii) Mineral and ultimately result in the withdrawalGem Houses, (iii) National Gold and Gemstone Reserve, (iv) Government Minerals Warehouse, (v) National Minerals Resources Data Bank, and (vi) Mining Cadastre;
•Introduction of community and government supporta statutory procedure for the company’sconduct of Corporate Social Responsibility (CSR), whereby a company is required to prepare annually a CSR plan jointly agreed with the local government authorities in consultation with the Minister for Finance and the Minister for Local Government Authorities; and
•Cancellation of retention licences, with rights over such licences to revert to the Government of Tanzania.
Minimum shareholding and public offering
The Mining (Minimum Shareholding and Public Offering) Regulations, 2016 came into force by Government Notice No. 286 published on 7 October 2016 and revised by amendment on 24 February 2017. On 10 January 2018, the Government of Tanzania published its new Tanzania Mining Regulations, 2018, which contain, amongst others, the implementation provisions of the amended Tanzania Mining Act.
The regulations set out the requirement to sell shares to Tanzanian nationals, by way of a public offering and listing on the Dar es Salaam Stock Exchange, which will apply to companies that are carrying out large scale mining operations.
In September 2020, the Government of Tanzania published the Mining (Minimum Shareholding and Public Offering) (Amendment) Regulations, 2020, by means of Government Notice No. 181, which exempts companies holding special mining licences from local listing requirements if such mining company has entered into an agreement with the Government of Tanzania that provides for a “closed loop” systemnon-dilutable free-carried interest in such mining company and an economic benefits sharing arrangement.
Arbitration
Along with other major mining companies, AngloGold Ashanti’s subsidiaries are seeking a constructive dialogue with the Government of Tanzania to gain assurances that the Geita gold mine will not be affected by the legal and fiscal changes mentioned above, given their mining development agreements which recyclesguarantee fiscal and regulatory stability as well as an agreement between all parties before material legal and regulatory changes are made. As a precautionary step to safeguard its interests, AngloGold Ashanti commenced international arbitration proceedings against the water usedGovernment of Tanzania in its operations without discharging itconnection with the enactment of this legislation in July 2017. These arbitral proceedings were stayed until 12 March 2021 in order to afford the environment. In some areas, however, suchparties the opportunity to achieve an amicable resolution of the dispute and as Ghanaa result of the impact of the COVID-19 pandemic. On 15 March 2021, and Brazil, high levels of rainfall and surface water runoff mean thatdue to continuing COVID-19 issues in sub-Saharan Africa, we requested a closed loop systemfurther extension to stay the proceedings. This request is not feasible and that discharges, after water treatment if necessary, must take place.pending with the arbitral tribunal.
The impactarbitration action against the Government of a breach, leak or other failure of a tailings storage facility can be significant, and the company therefore monitors such facilities closelyTanzania seeks declaratory relief in accordance with the company’s internal standards, independent review, national regulatory requirementsterms of the mining development agreement to preserve the company’ and commitments madeits shareholders’ rights and interests in the Geita gold mine, including confirmation from the Government of Tanzania that the company is exempt from the listing requirement. The arbitration
60
proceedings also seek to local communities. The occasional well-publicised failureconfirm that AngloGold Ashanti does not, as a result of its existing mining development agreement, fall within the scope of the new mining legislation, under which the Government of Tanzania has the right to (i) renegotiate existing mining agreements at its discretion, (ii) receive a third-party tailings facilityfree-carried interest of no less than 16 percent in all mining projects, and (iii) acquire up to 50 percent of the shares of the mining company commensurate with the total tax expenditure incurred by the Government in favour of the mining company, and which includes an increase in the rate of revenue royalties from 4 to 6 percent and a 1 percent clearance fee. AngloGold Ashanti can provide no assurance that the new mining legislation, including the listing requirement, will not apply to its operations in Tanzania and the potential impact of such failure also mean that these facilities are generally tightly regulated. An incident at the company’s operations could result, among other things, in enforcement, obligations to remediate environmental contamination, and claims for property or natural resources damages and personal injury and negative press coverage. An incident at another company’s operations has potential to result in governments tightening regulatory requirements applicable to mining operations generally and restricting other mine operators in response.
Ownership of and control over minerals on, in or under the land vest in the President of the United Republic of Tanzania. No person is allowed to prospect for minerals or carry on mining operations except pursuant to the authority of a mineral right licence granted, or deemed to have been granted, under the Tanzania Mining Act or its predecessor acts. To enable a company to prospect or mine, the Tanzania Ministry of Minerals (MEM) initially grants an exclusive prospecting licence. Upon presentation of a feasibility study, together with certain other environmental, social and financial assurances, the MEM may then grant a form of licence for mining. Licensing decisions take into account the abilities of the company (including its mining, financial and technical capabilities), projected rehabilitation programmes, environmental compliance and the payment of royalties.
Three categories of licences can be applied for under the Tanzania Mining Act: licences for exploration, licences for mining, and projectslicences for ancillary activities. Licences for exploration include prospecting licences and gemstone prospecting licences. Licences for mining include special mining licences (if the proposed capital investment is equal to at least USD 100 million), mining licences (if the proposed capital investment is equal to between USD 100,000 and USD 100 million) and primary mining licences (reserved for Tanzanian citizens). Licences for ancillary activities include processing licences, smelting licences and refining licences. For purposes of AngloGold Ashanti’s Geita gold mine, only prospecting and special mining licences are relevant.
| AMERICAS | CONTINENTAL AFRICA | SOUTH AFRICA | ||||||
| 1 | Argentina | 4 | Guinea | 9 | South Africa | |||
| Cerro Vanguardia (92.5%) | Siguiri (85%) | Vaal River | ||||||
| 2 | Brazil | 5 | Mali | Kopanang | ||||
| Serra Grande | Morila (40%)(1) | Moab Khotsong | ||||||
| AGA Mineração | Sadiola (41%) | West Wits | ||||||
| 3 | Colombia | 6 | Ghana | Mponeng | ||||
| Gramalote (51%) | Iduapriem | TauTona | ||||||
| La Colosa | Obuasi(3) | Surface Operations(2) | ||||||
| Quebradona (93.5%) | 7 | DRC | ||||||
Kibali (45%)(1) | ||||||||
| AUSTRALASIA | 8 | Tanzania | ||||||
| 10 | Australia | Geita | ||||||
| Sunrise Dam | ||||||||
| Tropicana (70%) | ||||||||
An application for a prospecting licence is made to the Mining Commission and the licence, once granted, is valid for an initial term of four years. After the initial term, the licence is renewable for a further period of three years, with no option for renewal thereafter. Upon renewal, 50 percent of the area covered by the licence must be relinquished. A company applying for a prospecting licence must, amongst other things, state the financial and technical resources available to it. A prospecting licence is not freely transferable and requires the Mining Commission to register any transfer of a prospecting licence. The Mining Commission will refuse to register the transfer unless otherwise indicated.
the transferee proves that it meets the financial and technical capability criteria required to apply for such licences. Holders of prospecting licences over a tenement will not automatically have first right to any mining licence granted over that tenement. However, in practice, they will be best positioned to meet the requirements to be granted a form of licence for mining.
Mining is mainly carried out through either a mining licence or a special mining licence, both of which confer on the holder the exclusive right to conduct mining operations in or on the area covered by the licence. A special mining licence is granted for the shorter of either the estimated life of the ore body indicated in the feasibility study report or such period as the applicant may request. It is renewable for a further period not exceeding the estimated life of the remaining ore body. Special mining licences have certain fiscal and other advantages over mining licences, as the holder of a special mining licence may enter into a mining development agreement with the Government of Tanzania to guarantee the fiscal stability of a long-term mining project and make special provision for the payment of royalties, taxes, fees and other fiscal imposts. A special mining licence holder may, in certain circumstances, unilaterally amend the programme of the mining operations agreed with the MEM.
61
(No. 20). Except in Johannesburg, South Africa. AngloGold Ashantithe case of a special mining licence, a mineral right may be freely transferred by its holder (in whole or in part) to another person or entity without requiring consent from the Mining Commission which is the third largest goldrelevant licensing authority. The grant and assignment of a special mining company inlicence generally requires the world, measured by production.
Tax laws relating to mining
Finance Act
The Finance Act, 2015 (No. 16) came into force on 1 July 2015 and Tanzania)
The Finance Act, 2017 (No. 4) came into force on 1 July 2017 and both imposes and revises certain taxes, duties, levies and fees. It further amends certain written laws relating to the collection and management of public revenue. Among other provisions, it has introduced inspection or clearance fees on the exportation or domestic use of minerals. Such exportation or domestic use is restricted unless such minerals have been inspected or cleared at the mining areas, ports, airports, border or posts and the clearing fee of 1 percent of the gross value of the minerals has been paid by the exporter or any other person in possession thereof.
Value Added Tax Act
Effective 20 July 2017, the Value Added Tax Act, 2014 (No. 5) (VAT Act) was amended by the Written Laws (Miscellaneous Amendments) Act, 2017 (No. 7) in order to restrict VAT relief for VAT input tax paid by mining companies on goods and services. Prior to the enactment of this amendment to the VAT Act, mining companies were entitled to 100% VAT relief in respect of the goods and services they purchased. The amendment prohibits refunds for VAT input tax incurred on a series of raw products, including the exportation of “raw minerals”. Subsequently, the Tanzania Revenue Authority (TRA) denied our applications for VAT input credit refunds, which amounted to a total of $139 million as of 31 December 2020, covering the period from July 2017 onwards, on the basis that all of the gold doré that we export constitutes “raw minerals” for purposes of the VAT Act. In response, the company filed formal notices of objection with the TRA stating that the exportation of gold doré is, in its view, not covered by the restriction since doré does not fall within the category of “raw minerals” as used in the Vaal River regionVAT Act. On 22 February 2019, the Tanzania Mining Act was amended by the Written Laws (Miscellaneous Amendments) Act, 2019 (No. 2) to introduce a definition for “raw minerals” which supports our interpretation that gold doré is excluded from the prohibition. On 1 July 2020, the Finance Act, 2020 (No. 8), amended the VAT Act, without retrospective effect, in order to remove the restrictions on VAT input tax credits for the exportation of South Africa“raw minerals” as well as a series of other raw products. This recent amendment confirms the technical basis for VAT input tax recovery for mineral exporters from July 2020 onwards. Discussions with the TRA are ongoing to resolve our historical claims for VAT input credit refunds for the period from July 2017 to June 2020, while VAT claims from July 2020 onwards are subject to verification procedures by the TRA before any refunds will be received.
Local Government Levies
As mentioned below, following the signature of an addendum to the mining development agreement, Geita gold mine is required to pay local government a service levy of 0.3 percent of its gross annual turnover in line with the Local Government Finances Act, 1982 (No. 9).
Environmental Management Fees and Charges
The Environmental Management (Fees and Charges) (Amendment) Regulations, 2016 (EM Regulations), which came into effect on 2 May 2016, introduced new fees in relation to the review of the Environmental Impact Assessment on projects by the National Environmental Management Council (NEMC). According to the EM Regulations, the fees involved amount to 0.1 percent of the total project costs or the minimum amount of TZS 25 million (approximately $11,000). However, the EM Regulations have not defined the term “project cost” nor have they provided a detailed breakdown on the determination of the project cost.
Labour laws
On 15 September 2015, the Non-Citizens (Employment Regulation) Act, 2015 (No. 1) (Non-Citizens Act) came into force which vests powers concerning work permits with the Labour Commissioner. Therefore, non-citizens wishing to be employed in the country are required to apply and be granted a work permit before applying for a residence permit. Before granting the work permit, the Labour Commissioner must be satisfied that all efforts have been explored to acquire a local expert. Further, the
62
company is required to submit a succession plan which sets out a well-articulated plan for the transfer of the non-citizen’s knowledge and expertise to Tanzanian citizens. Moreover, the Commissioner General of Immigration is required to take into consideration conditions of the work permit issued by the Labour Commissioner when granting a residence permit. In addition, the Non-Citizens Act introduced the Short-Term Permit (STP) which is granted to non-citizens who wish to work in the country for a period of not more than six months. Foreigners intending to work in Tanzania for more than three months are required to apply for an STP. The application for an STP is made to the Ministry of Labour and Employment.
Transparency and accountability laws
In 2015, the Tanzania Extractive Industries (Transparency and Accountability) Act, 2015 (No. 23) (TAA) came into force. The TAA establishes the Tanzania Extractive Industries (Transparency and Accountability) Committee (TAA Committee), an independent Government entity which is an oversight body for promoting and enhancing transparency and accountability in the extractive industry. The TAA Committee has powers under the TAA to impose obligations on specified extractive industries and statutory recipients to receive information on reconciliation on payments made and revenues received by the Government of Tanzania. In addition, an extractive industry is required under the TAA to submit to the TAA Committee annual reports containing information on local content and corporate social responsibility. The TAA also mandates that all concessions, contracts and licences are made public as well as all revenue collected from the extractive industry. Further implementing regulations require companies in the extractive industry to keep records of payments, beneficial ownership information, cost of production, exploration, prospecting, award or transfer of license, capital expenditure, volume of production and export date in respect of the granted licence.
Natural resources legislation
The Government of Tanzania enacted two laws in respect of natural resources that came into force in July 2017: the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act, 2017 (No. 6) (Unconscionable Terms Act) and the Natural Wealth and Resources (Permanent Sovereignty) Act, 2017 (No. 5) (Permanent Sovereignty Act and together with the Unconscionable Terms Act, the Natural Resources laws). In January 2020, it also published implementing regulations, including the Moab KhotsongNatural Wealth and Kopanang mines. SubsequentResources (Review and Re-negotiation of Unconscionable Terms) Regulations, 2020 and the Natural Wealth and Resources (Permanent Sovereignty) (Code of Conduct for Investors in Natural Wealth and Resources) Regulations, 2020.
The Natural Resources laws provide that Tanzania has sovereignty over its natural resources and require that all arrangements or agreements that relate to year end“natural wealth and resources” are subject to review by the National Assembly. Such agreements must fully secure the interests of the people of Tanzania. During a review all conditions precedent were fulfilledunconscionable terms as interpreted in accordance with the law are expunged from the agreement. The laws also require that new natural resources agreements are reviewed by the Government. The natural wealth and resources of Tanzania shall be inalienable and remain as the property of the people of Tanzania held in trust by the President.
In addition, under the laws, disputes over natural wealth and resources will not be subject to any proceedings in any foreign court or tribunal. As a result, investors are restricted from accessing international dispute resolution mechanisms. Accordingly, companies are now required to adopt Tanzanian law and local dispute resolution in all mining agreements. As such, all disputes will be handles by Tanzanian judicial bodies or any other Tanzania government body vested with powers to resolve disputes.
Moreover, every undertaking must demonstrate “guaranteed returns into the economy” from all earnings accrued or derived from such extraction, exploitation or acquisition and use. In addition, to ensure that the Government and the people of Tanzania obtain an equitable stake in the exploitation of mining resources, all project earnings must be retained in Tanzanian banks. Investors are also prevented from freely exporting raw minerals and repatriating funds.
Section 6 of the Unconscionable Terms Act specifically provides that where there is an unconscionable term, the National Assembly may pass a resolution for re-negotiation of the agreement whereupon the Government shall serve notice to the investor to re-negotiate the term or agreement. The Government and the particular investor have 90 days from the notice date to re-negotiate the term or agreement. This period can be extended if both parties consent. If both parties fail to revise the unconscionable term, the term will be deemed removed from the agreement.
A term is considered “unconscionable” under the Unconscionable Terms Act if, among other grounds, the requirements or provisions of the agreement restrict the right of the state to exercise authority over foreign investment within the country and in accordance with the laws of Tanzania, are inequitable and onerous to the state, secure preferential treatment designed to create a separate legal regime to be applied discriminatorily for the benefit of a particular investor, deprive the people of Tanzania of the economic benefits derived from subjecting natural wealth and resources to beneficiation in the country, or subject the state to the jurisdiction of foreign laws and foreign courts or tribunals.
Tanzania Shipping Agencies Corporation
In February 2019, the Tanzania Shipping Agencies Corporation (TASAC) issued a public notice informing the general public that, effective 4 March 2019, all clearing and forwarding services relating to import and export of goods and items as specified under
63
section 7(1)(a) of the Tanzania Shipping Agencies Act, 2017 (No. 14), which include minerals, mineral concentrates and products and extracts related to minerals, shall exclusively be handled by TASAC. Concerned about the impact on their operations, mining companies as well as other interested parties lodged an appeal to the Minister of Transportation. As a result, the effective date of salethe notice was 28delayed and the imposition of prescribed fees was suspended, while TASAC continued to provide services to its clients. On 5 February 2018.2021, the Government published the Tanzania Shipping Agencies (Shipping Business Fees, Charges and Commission) Order in the Government Gazette through Government Notice No. 181 of 2021, which reduced the prescribed fees and eliminates certain other charges for the clearing and forwarding services provided by TASAC, including in connection with the handling of the company’s export of gold bullion and import of certain goods.
AngloGold Ashanti’s rights and permits
The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania. AngloGold Ashanti has concluded a mining development agreement with the Ministry of Minerals on 24 June 1999 and was issued a special mining licence covering approximately 196 km2 for a period of 25 years, which expires on 26 August 2024.
On 9 October 2014, an addendum to the mining development agreement was entered into ratifying the following changes:
•An increase in the royalty rate from 3 percent to 4 percent with effect from 1 May 2012;
•With effect from the financial year 2015, the capital allowance applicable to the unredeemed qualifying capital expenditure (15 percent per annum) referred to in section 18(a) of the Income Tax Act, 1973 (No. 33) shall no longer apply; and
•With effect from 1 July 2014, Geita Gold Mining Limited is liable to pay the Geita District Council Levy at a rate of 0.3 percent on turnover (no longer capped at USD 200,000 per annum as provided under Article 4 of the company’s mining development agreement).
In March 2020, Geita Gold Mining Limited received the consent of the Minister of Minerals to change the mining method under its special mining license from open pit to underground method, subject to the requisite terms and conditions.
AUSTRALIA
General laws relating to mining
In Australia, with a few exceptions, all onshore minerals are owned by the Crown. The respective Minister for each state and territory is responsible for administering the relevant mining legislation enacted by the states and territories.
Native title legislation applies to certain mining tenements within Australia. Australia recognises and protects a form of native title that reflects the entitlement of Aboriginal people to their traditional lands in accordance with their traditional custom and laws. Should native title claims or determinations exist, certain native title processes and procedures will apply under the Native Title Act 1993 (Cth) (Native Title Act) before the tenure is granted. Tenure may be granted subject to conditions relating to native title rights. In the mining context, native title matters are managed as part of the tenement grant process. If disputes arise in relation to the grant of a particular tenement, they can be referred to the National Native Title Tribunal, established under the Native Title Act, for resolution. Native title legislation also provides a framework for compensation to be paid for acts that affect native title rights and interests. Ordinarily, the relevant Commonwealth or State government is liable to pay compensation for acts attributable to it. However, in the state of Western Australia, the Mining Act 1978 (WA) provides that an applicant for the grant of, or the holder of, a mining tenement is responsible for native title compensation, if determined to be payable, to native title holders.
Federal, state and territory Aboriginal and non-Aboriginal heritage laws operate in parallel to the native title legislation. State and territory heritage laws exist predominantly for the purposes of managing the impact of developments on sites, objects and areas of heritage significance. Where an area of heritage significance is placed on the national or world heritage registers, federal approval processes may also apply. To date, there has not been any significant impact on any of AngloGold Ashanti’s tenure due to native title or heritage legislation.
AngloGold Ashanti’s operating properties are located in the state of Western Australia where tenure is issued under, and mining operations are governed by, the Mining Act 1978 (WA). The most common forms of tenure in Western Australia are exploration and prospecting licences, mining leases, miscellaneous licences and general purpose leases. In most Australian states, if the holder of an exploration licence establishes indications of an economic mineral deposit in the area covered by the exploration licence and complies with the conditions of the grant, the holder of the exploration licence has a priority right against all others to be granted a mining lease which gives the holder exclusive mining rights with respect to minerals on the property. In Western Australia, a general purpose lease may also be granted for one or more of a number of permitted purposes. These purposes include erecting, placing and operating machinery and plants in connection with mining operations, depositing or treating minerals or tailings and using the land for any other specified purpose directly connected with mining operations.
It is possible for an individual or entity to own an area of land (including for infrastructure purposes) and for another individual or entity to be granted the right to explore for or mine any minerals located on or under the surface of the same area. The maximum initial term of a mining lease in Western Australia is 21 years and the holder has the right to renew the lease for an additional 21
64
years. Subsequent renewals are granted at the discretion of the respective state or territory’s minister responsible for mining rights. In Western Australia, mining leases can only be assigned with the prior written consent of the minister.
Tax laws relating to mining
Government royalties are payable by the holder of mining tenure in respect of minerals obtained from the relevant area of land at the rates specified in the relevant legislation in each state or territory. The royalty on gold production in Western Australia is payable quarterly at a fixed rate of 2.5 percent of the royalty value of gold metal produced. The royalty value is calculated by multiplying the amount of gold produced during a given month by the average gold spot price for that month. In addition, the holder of a mining tenement is required to pay annual rent in respect of the tenement. In Western Australia there is a minimum annual expenditure requirement for prospecting and exploration licences and mining leases. Exemptions from the expenditure requirement can be obtained if certain conditions are satisfied.
Environmental laws relating to mining
Mining tenements will be granted with endorsements and conditions relating to protection of the environment. Exploration and mining operations may also require separate approval from the state, territory or federal environment minister, which may require completion of an environmental impact assessment (including a public consultation period) pursuant to applicable environmental protection legislation prior to commencement. Further, a works 'construction' approval and an operating licence under the relevant environmental protection legislation in the state or territory may also be required for certain mine processing or mining-related operations. Depending on the jurisdiction, further separate approval may be required for the removal of native vegetation within the tenement, and the taking and use of water for exploration and mining operations.
AngloGold Ashanti’s rights and permits
AngloGold Ashanti has been granted 21-year term mining leases with rights of renewal to all of its mining areas in Australia, including its proportionate share of joint venture operations and accordingly it has, together with its joint ventures employed,venture partners where applicable, the exclusive right to mine in those areas. Both the group and its joint venture partners are fully authorised to conduct operations in accordance with relevant laws and regulations. The mining leases and rights of renewal cover the current life-of-mine at AngloGold Ashanti’s operations in Australia.
At Sunrise Dam the deposit is now situated upon two mining leases covering approximately 7,808 hectares and another mining lease of 1,768 hectares contains related infrastructure. Both leases are currently in good standing, with expiry dates in 2038.
At Tropicana, the deposit is situated upon a single mining lease covering approximately 27,228 hectares, which is currently in good standing, with an expiry date in 2036.
AngloGold Ashanti is also conducting early stage exploration activities in Queensland under the Mineral Resources Act 1989 (QLD). AngloGold Ashanti holds 13 exploration permits covering 358,700 hectares. Each permit is granted with an initial term of five years, renewable for two further periods of not more than five years each.
AMERICAS
Argentina
General laws relating to mining and land ownership
Mining regime
The Argentinean Mining Code governs mining activity in the country. Special regimes exist for hydrocarbons and nuclear minerals. In the case of most minerals, the Argentinean Mining Code establishes that the owner of the land is not the owner of the mineral rights; these are held by the national or provincial governments (depending on average, 51,480 people (including contractors)the location of the minerals). The national or provincial government, as applicable, is required by the Argentinean Mining Code to grant whomever discovers a new mine title to the mining concession.
The Argentinean Mining Code regulates exploration permits and mining concessions. Exploration permits grant their holders exclusivity rights to any mineral discoveries, including those made by a third party within the exploration area covered by the permit. Exploration permits are limited in 2017 (2016: 52,649).time and as to the extent of the exploration area, are subject to the payment of a single-time fee, and also require a minimum exploration work programme and schedule to keep the permit in force.
65
Argentinean Mining Code. Approval and registration of the legal survey by the provincial mining authority constitutes formal title to the mining concession.
Holders of mining concessions must comply with three main conditions: payment of an annual fee, investment of a minimum amount of capital, and the carrying out of a reasonable level of exploitation. Failure to do so could lead to forfeiture of the mining concession, which would then revert back to the Province.
In addition to the Argentinean Mining Code, between 1993 and 1995, Argentina implemented several federal laws to offer foreign companies attractive incentives for exploration and mining in Argentina, the Mining Investment Law (Law No. 24, 196), as amended (Mining Investment Law), and related legal provisions being the most important one. Such incentives include, amongst others, import duty exemptions, accelerated depreciation of fixed assets, a three percent cap on provincial royalties set at pit-head value on the mineral extracted, value added tax refunds for exploration-related expenses incurred by companies registered under the Mining Investment Law, and, subject to the filing of a feasibility study for the relevant mining project, a 30-year stability as to the tax burden on the project and the customs and foreign exchange regimes and duties. Cerro Vanguardia S.A. (CVSA) obtained its tax, customs and foreign exchange stability certificate in 1996.
Glacier Law
On 30 September 2010, the National Law on Minimum Requirements for the Protection of Glaciers (Law No. 26, 639) (Glacier Law) was enacted in Argentina, banning new mining exploration and exploitation activities on glaciers and “peri-glacial” areas. The Glacier Law also subjects on-going mining activities in those areas to an environmental audit. If such audit results in material impacts on glaciers and “peri-glacial” areas, the relevant authority is empowered to take action, including suspension or relocation of the activity. The Glacier Law establishes a broad definition of “peri-glacial” areas that, together with glacial areas, must be surveyed by an existing national government agency specifically appointed to this end every five years. The area where the Cerro Vanguardia project is located does not include any glaciers or peri-glacial areas according to the inventory of glaciers which was published in June 2018. The constitutionality of the Glacier Law has been challenged by some mining companies along with the Province of San Juan (which hosts large mining projects), but the National Supreme Court of Justice of Argentina rejected these claims on 4 June 2019.
Rural Land Law
On 27 December 2011, the Argentinean National Congress passed a law on the Regime for Protection of National Domain over Ownership, Possession or Tenure of Rural Land (Law No. 26, 737) (Rural Land Law) which implemented a set of rules restricting the ownership of rural land by foreigners (including foreign individuals or any kind of legal entity controlled by foreign individuals or legal entities). The main restrictions are as follows: (i) foreigners cannot own in the aggregate more than 15 percent of the entire rural land of Argentina, the same cap being applicable to each Province and Municipality; (ii) foreigners will not be allowed to purchase more than 1,000 hectares in the so-called “zona núcleo”, which comprises the main agricultural areas of central Argentina or an “equivalent” surface depending on the location of the land and its productive potential; and (iii) foreigners will not be allowed to buy land that contains, or is adjacent to, relevant and permanent water bodies (such as rivers and lakes). Although exploration permits and mining concessions are not the subject matter of the restrictions placed by the Rural Land Law, certain rights granted to foreign mining companies under the Argentinean Mining Code may be restricted by this new law. For example, the right that holders of mining concessions currently have to force the surface owner to sell the land to the holder of the mining concession might be restricted if the concession holder is a foreign individual or a legal entity controlled by foreigners.
Federal Mining Agreement
On 13 June 2017, AngloGold Ashanti produced attributable 3.8the national government and the provinces in whose territories the main mining projects of Argentina are located, signed the New Federal Mining Agreement (FMA). The purpose of the FMA is, amongst other things, to increase provincial revenues from the mining industry by creating legal entities owned by provincial governments that would work in association with private mining companies. This scheme is not new in Argentina and it has been used by some provincial governments, amongst them the Santa Cruz Province (through Fomicruz), in which the Cerro Vanguardia project is located. The FMA also contemplates other forms of revenues such as the formation of special trusts to be funded by mining companies in order to finance education, health and other programmes. Additionally, the FMA included setting forth mining royalties up to three percent of the gross value of commercialised minerals, without any deductions other than VAT. As the FMA has not yet been converted into law by the National Congress, its provisions are neither binding nor enforceable.
In Argentina, the current regulatory regime of royalty payments is expected to change and several different options and payment thresholds have been discussed. In December 2012, the Santa Cruz Province changed the mining royalty from one percent to three percent calculated at pit-head value of the mineral extracted thus bringing it to the cap of the Mining Investment Law.
Foreign exchange control regime
On 1 September 2019, by means of Executive Decree No. 609/2019 (Decree), the Argentinean national government reinstated foreign exchange and export controls. The Decree and related regulations of the Central Bank of Argentina impose, among other
66
measures, the obligation of Argentinean residents to transfer to Argentina and/or sell for Argentinean pesos in the Argentinean foreign exchange market (mercado de cambios) the countervalue (contravalor) from their exports of goods within a specified time period. This period depends on the goods exported and the relationship between the Argentinean exporter and the foreign importer and ranges from 15 to 365 calendar days counted as of the date on which the Argentinean customs authorities certify the shipment to the export destination. Regardless of the applicable maximum term, the proceeds from the export must be transferred and sold in the Argentinean foreign exchange market no later than five business days from the date of collection.
The export of goods is regulated by Communication “A” 6882 of the Argentinean Central Bank (as modified) which establishes the specific regulatory requirements in order to implement the measures adopted by the national government in this area. In accordance with these Central Bank regulations, the exporter shall select a financial institution to track each export transaction through the SECOEXPO (Seguimiento de las negociaciones de divisas por exportaciones de bienes) tracking system which is administered by the Argentinean Central Bank. The selected financial institution must determine the amount and deadline to settle the export proceeds and shall register the amounts allocated to each export transaction in the tracking system. Upon the expiration of the applicable term to transfer and sell the export proceeds, the designated financial institution must inform the Argentinean Central Bank, through the SECOEXPO tracking system, if the exporter has complied with its obligations or not.
As a general rule, prior approval of the Argentinean Central Bank is required to access the foreign exchange market for transactions relating to the outflow of funds, except in certain circumstances. For example, no prior approval is required when all holdings in foreign currency in Argentina are deposited in accounts with financial institutions and the amount of “liquid external assets” available at the beginning of the day in which access to the foreign exchange market is effected is lower than the equivalent of $100,000. “Liquid external assets” include, among others: holdings of foreign currency bills and coins, coined or good delivery gold, demand deposits in foreign financial institutions and other investments which allow for immediate liquidity in foreign currency (such as investments in foreign government securities, funds in investment accounts held abroad, crypto-assets, funds in payment service providers, etc.). Reserve or guarantee funds created under financing transactions or derivatives transactions entered into abroad are not considered liquid external assets. There are also certain circumstances in which the $100,000 limit will not be considered to have been exceeded. Furthermore, the Argentinean Central Bank is not required to give prior approval when a commitment is given to settle through the foreign exchange market, within five business days of their availability, any funds received abroad as collection of (i) loans granted to third parties, (ii) term deposits, or (iii) the sale of any kind of asset, when each of such had been granted, created or purchased after 28 May 2020. In addition, no prior approval is required when the client files an affidavit stating that: (i) as of the date on which access to the foreign exchange market is requested it has not sold securities against foreign currency in Argentina or transferred such securities to depository entities abroad in the past 90 calendar days, and (ii) undertakes not to arrange sales of securities against foreign currency in Argentina or transfers thereof to depository entities abroad from the moment it requires access and for the subsequent 90 calendar days.
From 30 December 2020 until 31 March 2021, prior approval from the Argentinean Central Bank is not required for payments in connection with the import of goods if certain conditions are satisfied. To qualify, the financial entity should hold an affidavit from its client stating that the total amount of payments associated with its imports of goods made through the foreign exchange market as from 1 January 2020, including the intended payment, does not exceed by more than $1 million ouncesthe amount resulting from the following sum:
•The amount for which the importer would have access to the foreign exchange market when calculating imports of goods under the SEPAIMPO (Sistema de seguimiento de pagos de importaciones) monitoring system and that were made official between 1 January 2020 and the day prior to accessing the foreign exchange market; plus
•The amount of deferred or on-demand payment of imports of goods of the following transactions not included in the previous point: (i) operations shipped as from 1 July 2020 or previously shipped that have not arrived in Argentina before that date, (ii) aimed to cancel commercial debts with export credit agencies, foreign financial entities or guarantees thereof, (iii) made by the public sector, business organizations where the Argentinean government has majority participation or public trusts, (iv) with pending customs registration of supply of critical medicines, and (v) purchase of kits for the detection of COVID-19; minus
•The amount pending to be regularised for repayment of imports with pending customs registration made between 1 September 2019 and 31 December 2019.
CVSA had a cash balance of $137 million equivalent as at 31 December 2020, of which $50 million is currently eligible to be declared as dividends. Application has been made to the Argentinean Central Bank to approve $11 million of this eligible amount to be paid offshore to the company, however, approval remains pending. The cash is fully available for CVSA’s operational requirements.
Export duties
On 21 December 2019, the National Law on Social Solidarity and Productive Reactivation (Law No. 27, 541) (Solidarity Law) was enacted. The Solidarity Law grants the national government power until 31 December 2021 to impose export duties which may not exceed certain caps. For example, the Solidarity Law provides that export duties on mining exports cannot exceed eight percent of the taxable value or official FOB price. On 2 October 2020, the national government published Decree No. 785/2020
67
(Export Duties Decree) which sets an export duty rate of eight percent for certain goods, including doré bars and gold (2016: 3.6alloys. The Export Duties Decree will be applicable until 31 December 2021 and revokes the provisions of Decree No. 793/2018 which had previously set the export duty at 12 percent ad valorem. These export duties, if not compensated with other tax reductions, affect the tax stability guarantee granted to CVSA in 1996 in light of the fact that at the time export duties were zero percent.
On 26 February 2019, the Argentinean tax and mining authorities published a resolution (RC 4428/2019) establishing an administrative procedure to be followed in order to obtain the reimbursement or compensation of federal taxes paid in excess of the total tax burden provided for by the applicable tax stability guarantee. CVSA initiated this new procedure in order to claim compensation for the export duties it paid in 2018 and 2019 as export duties are not contemplated by its tax stability guarantee. Prior to the publication of RC 4428/2019, CVSA had already submitted to the tax authorities claims for reimbursement of the export duties it paid from 2008 to 2015.
Pursuant to the new administrative procedure, the National Mining Secretariat issued a favorable opinion regarding CVSA’s claim in respect of fiscal year 2018, which amounted to approximately $4.0 million ounces)as of 31 December 2020. This claim is currently under review by the relevant customs authorities. The National Mining Secretariat has not yet issued an opinion in respect of CVSA’s claim in respect of fiscal year 2019, which amounted to approximately $12.3 million as of 31 December 2020.
Furthermore, CVSA has requested the tax authorities to apply the procedure provided for in RC 4428/2019 in respect of its historical claims for fiscal years 2008 to 2015 during which the imposition of export duties also exceeded CVSA’s total tax burden under its tax stability guarantee. However, these claims, which amounted to approximately $6.1 million as of 31 December 2020, are still being reviewed under the rules to challenge export duties instead of the new procedure provided for in RC 4428/2019. CVSA has appealed the application of those rules and a decision on this issue is pending.
Environmental laws relating to mining
Any mining company wishing to commence or modify any mining-related activity, as defined by the Argentinean Mining Code, including prospecting, exploration, exploitation, development, preparation, extraction, and storage of mineral substances, as well as 753,000 poundsproperty abandonment or mine closure activity, is required to prepare and submit to the competent provincial environmental authority an Environmental Impact Assessment (EIA) prior to commencing the work. Each EIA is required to describe the nature of uranium oxide, 6.2 million ouncesthe proposed work, its potential risk to the environment, and the measures that will be taken to mitigate that risk. If accepted by the competent authority, the EIA is used as the basis to create a Declaration of silverEnvironmental Impact (DEI) to which the mining company is required to adhere during the mining-related activity at issue. The DEI is required to be updated at least on a biannual basis. Sanctions and 203 tonnespenalties for non-compliance with the DEI are outlined in the Environmental Protection section of sulphuric acidthe Argentinean Mining Code, and may include warnings, fines, suspension of quality certifications, restoration of the environment, temporary or permanent closure of activities, and withdrawal of authorisation to conduct mining-related activities.
AngloGold Ashanti’s rights and permits
In the case of Cerro Vanguardia, AngloGold Ashanti’s operation in Argentina, the mining concession holder is AngloGold Ashanti’s partner, Fomento Minero de Santa Cruz S.E. (Fomicruz). On 27 December 1996, Fomicruz entered into a usufruct agreement whereby CVSA was granted an irrevocable right to exploit the Cerro Vanguardia deposit (encompassing an area of approximately 543 km2) for a 40-year period, which expires on 26 December 2036. CVSA is a corporation incorporated in Argentina indirectly controlled by AngloGold Ashanti, with Fomicruz as by-products.minority shareholder. On 14 August 1996, CVSA obtained its tax, customs and foreign exchange stability certificate, which expires in 2026.
General laws relating to mining and land ownership
The Brazilian Constitution of 3.8 Moz was achieved1934 states that, for purposes of exploration and exploitation, deposits and other Mineral Resources constitute property separate from the soil and belong to the Federal Union. Exploration and exploitation of such Mineral Resources may take place only with the Federal Union’s concession and in such a way as to protect the national interest. Federal law sets out penal and administrative sanctions for conduct and activities deemed harmful to the environment.
In Brazil, the National Mining Agency (ANM) is the state body within the Mines and Energy Ministry (MME) that is responsible for: (i) the registration of mining titles, (ii) the grant of authorisations and concessions, (iii) the supervision of mining activities and mining titleholders, and (iv) the issuance of supplementary rules in relation to mining activity.
Under the current Brazilian Mining Code, there are two kinds of mines: (i) claimstake mines (minas manifestadas), for which rights were acquired before 1934 and exist independently of any mining licence or authorisation from the Federal Government and for which the Mineral Resources constitute property of the landowner and (ii) granted mines, which are those that rely on grants from the Federal Government for mineral exploration or exploitation (pursuant to the Brazilian Constitution of 1988). AngloGold Ashanti’s operations in Brazil consist of both claimstake mines and granted mines.
68
Mining activities in granted mines must be performed in two defined stages: (i) exploration, which entails defining and evaluating the deposit and determining the feasibility of exploitation, and (ii) exploitation, which involves coordinating operations aimed at the industrial exploitation of the mineral deposit, from the extraction of useful minerals to their processing. Exploration authorisations issued by ANM are valid for one to three years. Extensions can be obtained if necessary, as long as it is justified. In contrast, exploitation rights, once granted, are valid for the lifetime of the deposit, provided the mining titleholder complies with all legal requirements. Pursuant to these requirements, for example, titleholders must (i) start work on mineral exploitation within six months from the date of publication of the Exploitation Concession, (ii) continue their mining activities until the mineral deposit has been exhausted, in accordance with the Economic Exploitation Plan (Plano de Aproveitamento Econômico) approved by ANM and (iii) refrain from suspending mining activities without prior notice to ANM.
Tax laws relating to mining
During the exploration period, the mining titleholder has to pay an Annual Rate per Hectare (Taxa Annual por Hectare or TAH), subject to a maximum value set by law. In the exploitation period, regardless of the legal regime governing the project (whether claimstake or granted mines), the mining titleholder has to pay the Financial Compensation for Exploiting Mineral Resources (Compensação Financeira pela Exploração Mineral or CFEM). The CFEM which is 1.5 percent for gold is currently calculated based on revenues.
At the end of 2011 and the beginning of 2012, the states of Minas Gerais, Pará, Amapá and Mato Grosso do Sul each created a new tax (duty) on research, extraction and exploration activities as well as on the use of Mineral Resource carried out in those states. This tax could range from BRL3.00 to BRL6.50 per ton of ore extracted. In the state of Minas Gerais, gold ore is exempted from the collection of this new duty. At the end of 2020, the state of Goiás created a new tax (duty) on research, extraction and exploration activities carried out in this state at a costrate of salesBRL10.38 per ton of $3.6 billionore sold, which currently still needs to be implemented.
Environmental laws relating to mining
Following the catastrophic failure of a tailings storage facility (TSF) operated by Vale in the state of Minas Gerais in January 2019, executive, legislative and judiciary bodies, both at the federal and state levels, have generally increased scrutiny of mining operations in Brazil, and of TSFs in particular, and have been considering, and in some cases have adopted, stricter laws and regulations applicable to the approval, licensing, construction, management, closure and decommissioning of TSFs in Brazil.
At the federal level, the ANM issued Resolution No. 13/19 in August 2019 (replacing its earlier Resolution No. 4/19) which adopted additional regulatory measures to ensure the stability of TSFs, in particular those built or heightened by the upstream method or by any method declared as “unknown”. Among other things, ANM Resolution No. 13/19 prohibits the upstream method for the construction or heightening of tailings dams throughout the national territory of Brazil. It further requires operators to cease all storage and disposal activities at TSFs (known as “deactivation” or “desativação”) constructed or heightened upstream or by an all-in sustaining cost“unknown” method by 15 September 2021 as well as to decommission such TSFs by 15 August 2022 to 15 September 2027 (depending on the capacity volume). ANM Resolution No. 13/19 does not require complete removal of $ 1,050/oztailings material from TSFs (a process known as “decharacterization” or “descaracterização”). As a result, the Serra Grande mine in the state of Goiás is in the process of reinforcing the dam walls of its upstream TSF in advance of its expected deactivation by 15 September 2021. To comply with the terms of ANM Resolution No. 13/19, the mine will also need to decommission the Serra Grande tailings dam by 15 September 2025. The company has begun the process of transitioning to dry-stacking operations for tailings storage.
Furthermore, Federal Law No. 14.066/20, adopted in September 2020, also imposes requirements on companies to close and decommission upstream TSFs, including our Serra Grande tailings dam, by 25 February 2022 (which date is earlier than required by ANM Resolution No. 13/19). However, Federal Law No. 14.066/20 does permit extensions of the compliance deadline, with the consent of the ANM based on the technical plan for decommissioning. Neither ANM Resolution 13/19 nor Federal Law No. 14.066/20 requires removal of all tailings material in connection with the decommissioning of TSFs. AngloGold Ashanti expects to transition to dry-stacking operations at Serra Grande in advance of the required closure deadline for the Serra Grande tailings dam. With respect to downstream (or “centerline”) TSFs, Federal Law No. 14.066/20 requires companies, to the extent that communities are located in the self-rescue zone of those TSFs, to implement one of the following measures for such structures: either (i) the structure must be deactivated and decommissioned, (ii) the population must be relocated, with reparations for loss of cultural heritage, or (iii) reinforcement works that guarantee the effective stability of the structure must be carried out, by decision of the public authorities, taking into account the previous nature of the dam in relation to the occupation and technical-financial viability of the alternatives. Even if reinforcement works are completed, deactivation and decommissioning of those TSFs will be required at the end of the life of the mine. All of the TSFs operated by AngloGold Ashanti in Brazil have communities located in self-rescue zones. AngloGold Ashanti expects to transition to dry-stacking operations for tailings storage at each location in Brazil in the near term and to decommission each of these dams in accordance with their closure plans. According to current estimates, capital expenditures in 2021 required to implement this new technology will be in excess of $70 million.
At the state level, the state legislator in the state of Minas Gerais adopted Law No. 23.291/19 in February 2019 which contained the state’s policy on TSF safety and should be implemented in conjunction with the equivalent federal policy. Among other things, Law No. 23.291/19 determines the criteria for licensing and inspecting TSF structures, prohibits TSFs constructed or heightened
69
using the upstream method, establishes bond requirements and holds management liable for non-compliance with its provisions. The administrative requirements to implement certain provisions of Law No. 23.291/19 have not yet been issued.
AngloGold Ashanti’s rights and permits
At AGA Mineraçao, Cuiabá has a single concession covering a total area of 3,662 hectares, Lamego is covered by three geographically contiguous concessions totally 1,622 hectares and Córrego do Sítio is hosted by five geographically contiguous concessions covering a total area of 6,017 hectares. All of these are in good standing. At Serra Grande, the company has interests in or agreements over 61,500 hectares in Crixas Greentone belt, representing approximately 87 percent of the relevant tenements that correspond to all current exploration and mining activities. These have been held since 1987. Brazilian mining concessions remain valid up to the depletion of the Ore Reserve and Mineral Resource pursuant to the Economic Exploitation Plan approved by the ANM and in accordance with the required environmental permits, and as a result do not have an explicit expiry date.
Colombia
General laws relating to mining and land ownership
General regime
The Colombian Constitution declares that the sub-soil and the non-renewable natural resources located within the Colombian territory are the property of the Colombian State. The underlying principle of Colombian mining legislation for the granting of mining concession contracts is first in time, first in law. Mining activities are regulated by the Colombian Mining Code, Act 685, 2001.
The filing of an exploration and exploitation proposal triggers a right of preference to obtain rights over the targeted area, provided it is available. Such area cannot exceed 10,000 hectares. Upon receipt of a proposal, the relevant government agency determines whether another proposal or contract already governs the area. If there are no pre-existing claims, the government agency grants the applicant a “free area”.
With respect to land ownership, a mining concession in Colombia does not grant the rights over the surface required to develop a mining project. Therefore, in order to develop a mining project, it is required to acquire and secure access to the land (soil). This can be achieved in several ways, such as (i) purchase of the land, (ii) a transit easement, (iii) a mining easement, and (iv) the special acquisition process or expropriation.
Concession contract
As the sub-soil and the non-renewable natural resources located within the Colombian territory are property of the Colombian State, the Colombian Mining Authority grants the authorization to explore and exploit minerals through a concession contract.
Such concessions allow concessionaires to conduct the studies, works and facilities necessary to establish the existence of minerals and to organise their exploitation. Upon being awarded a mining concession, a company must take out an insurance policy to cover the costs associated with potential environmental damage as well as breaches of its mining obligations. It may then proceed with exploration activities. Once the exploration phase is complete, the concessionaire files a new plan regarding proposed works and facilities. With the award of the mining concession or tenement contract, there are specified timelines for the completion of the various phases of a mining project, e.g. exploration, construction, exploitation. The company must comply with these timelines unless performance is suspended, for example, due to force majeure or extensions or modifications to the timelines. A grant of force majeure is for one year and must be renewed on an annual basis. If the company does not comply with the specified timelines for the completion of the various phases of a mining project, the mining authority may revoke the company's concession contracts or mining licenses. As a general matter, any company that wishes to obtain a renewal of its concession contract must be up to date in all its legal and contractual obligations and must present a new plan of works and facilities to be implemented after the contract is renewed.
PINES program
In 2013, the national government instituted the PINES program designed to aid promoting certain projects that are deemed to have a national interest. This designation provides for greater oversight from the national government. All of our three advanced exploration projects (La Colosa, Quebradona and Gramalote) were considered of national strategic interest. Currently, Quebradona and Gramalote remain in the PINES program, but La Colosa was temporarily removed as such (until the force majeure is over).
70
Tax laws relating to mining
From the moment the concession contract is registered with the Mining Register, the concessionaire has several financial obligations, including the payment of (i) a surface fee during the exploration, construction and assembly stage and (ii) royalties.
Once exploration is complete and the mining infrastructure in place, the concessionaire must begin paying royalties to the Colombian government, consisting of a percentage of the primary product and sub-products being exploited. The percentage of the royalty depends on the regulation in force when the concession contract is registered. In the case of the Quebradona project, the deposit mainly consists of copper followed by gold and silver. There is a 5 percent royalty for copper on the production value at the mine’s or well’s edge (i.e. when extracted from the subsoil). In case of gold and silver, a royalty of 4 percent on the production valued at the mine’s or well’s edge (i.e. when extracted from the subsoil) was established.
Furthermore, Colombian law establishes that once the environmental license is granted the concessionaire must invest 1 percent of the project’s value to benefit the basins covered by the environmental license.
Environmental laws relating to mining
In order to obtain an authorization from the National Environmental Licensing Authority of Colombia to carry out a project, the company must prepare an Environmental Impact Study (E.I.A.) for approval by this authority.
Global environmental licenses are granted for the entire life of the project and cover all phases: construction, assembly, operation, maintenance, dismantling, final restoration, abandonment and/or termination.
AngloGold Ashanti’s core mining concession contracts provide that the mining authority has the discretion to declare the underlying concession void if the specific company which holds the concession breaches applicable environmental laws or regulations. If the mining authority were to exercise such discretion against it, such company would be required to abandon its projects and all of its other existing mining concession contracts. Pending proposals for new mining concession contracts would also be cancelled and the company would be banned from doing business with the Colombian government for a period of five years. As a result, the company would be unable to conduct any mining exploration or development activities during such period. However, this would not affect other AngloGold Ashanti subsidiaries and $1,087/oz for equity accountedoperating in Colombia, which hold singularly or in concert with joint venture partners the majority of the company’s concession contracts in Colombia.
There are some areas where mining activity is prohibited. These areas are national parks, regional parks, protected forest reserves, paramos (included in Act 1753, introduced in 2015) and wetlands, pursuant to the Ramsar Convention on Wetlands of International Importance.Some forest reserves are not “protected” but are set aside for active forestry purposes. Such forest reserves must be “extracted” after initial prospection, meaning that the concessionaire must obtain a specific permit to partially and temporarily change the use of the soil before pursuing exploration activities. In addition, Resolution 187/2016, passed by the national government in late 2016, identifies areas that the Ministry of the Environment has determined to be “paramos” areas, or paramos transition areas. In these areas there are limitations on industrial or commercial work being performed, including mining. The regulation also specifies a process to determine what work, if any, can be performed in a paramos-designated area.
AngloGold Ashanti’s rights and permits
The La Colosa project managed by AngloGold Ashanti Colombia S.A. (AGA Colombia) remains in force majeure due to the delays in the granting of the environmental permits by the local environmental authority, thereby preventing AGA Colombia from undertaking further exploration activities. The current one-year grant of force majeure, during which time the specified timelines for completing the various phases of the mining project under the concession contract are suspended, will expire on 22 June 2021. AGA Colombia applied for a mining area integration (consolidation) of its concession contracts related to La Colosa, in respect of which AGA Colombia was not in compliance with some of the specified timelines. The application for mining area integration (consolidation) was approved in March 2017, which remedied the non-compliance of each consolidated concession and reset the specified timelines. La Colosa now has a single integrated mining concession contract (EIG-163) which covers a total area of 9,210 hectares and expires on 28 February 2037.
Minera de Cobre Quebradona S.A.S. B.I.C. (MCQ) which manages the Quebradona project, obtained the integration of concession agreement 5881 in October 2016 and registered in December 2016. As a result, MCQ was granted the exclusive right to explore, take ownership and dispose of the mineral reserves (ore) extracted from the concession area. MCQ has the right to request an extension of up to 30 years, at least two years before the expiration of the operating period. This extension is not automatic, and the request must be filed with new technical, economic, environmental and social studies that demonstrate the status of the mineral resources. Currently, concession contract 5881 is in its fifth year of the integrated exploration phase. The permits for the construction and mining operation are currently being assessed by the relevant mining authority (Secretaría de Minas de Antioquia) and the National Environmental Licensing Authority of Colombia (ANLA) is reviewing the environmental study.
The Gramalote project is organised as a joint venture between AngloGold Ashanti (through AGA Colombia Holdings Limited and AngloGold Ashanti Holdings plc) and B2Gold (through B2Gold Corp. and Graminvest Ventures Limited). Gramalote Limited, a
71
company incorporated under the laws of British Virgin Islands which is the legal vehicle operating the joint venture, established a Colombian branch, Gramalote Colombia Limited (GCL), to carry out activities in Colombia and obtain the mining concession contracts necessary to develop the Gramalote project. The Gramalote joint venture has been operated by B2Gold since January 2020. Pursuant to an integrated mining concession contract No. 14292, GCL was granted the exclusive right to explore, take ownership and dispose of the mineral reserves (ore) extracted from the concession area until April 2043. GCL has the right to request an extension of the operating period for up to 20 years, and, if exercised, such request to extend must include new technical, economic, environmental and social studies that demonstrate the status of the mineral resources. Currently, concession contract No. 14292 is in the phase of construction and assembly, pending resettlement of communities and the formal start of construction activities. GCL has received an environmental licence granted by the National Environmental Licensing Authority of Colombia (ANLA) and permits for the construction and mining operation which were approved by the relevant mining authority (Secretaría de Minas de Antioquia).
United States of America
Nevada
Mineral and surface rights in the United States are owned by private parties, state governments or the federal government. The majority of land utilised for precious metals exploration, development and mining in the western United States is owned by the federal government, and often the state government will have an ownership interest in minerals, regardless of whether the state is the surface owner. The right to mine on such federal land in western states is governed by the U.S. General Mining Law of 1872, as amended (General Mining Law). The General Mining Law allows mining claims on certain federal lands upon the discovery of a valuable mineral deposit and proper compliance with claim location and maintenance requirements.
In Nevada, AngloGold Ashanti (U.S.A.) Exploration Inc. is advancing the Silicon Project, located on federal lands covering an area of approximately 5,700 acres. Additionally, a further 1,414 mining claims (29,215 acres) are also being explored. On these lands, AngloGold Ashanti (U.S.A.) Exploration Inc. is currently engaged in early-stage exploration activities that include, but are not limited to, geological and spectral mapping, surface geochemical sampling, geophysical surveying and RC and/or diamond drilling.
Mineral exploration activities in Nevada are also generally subject to applicable federal, state, and local permitting requirements, but the specific regulatory authorizations required for the company’s activities are based on the nature and location of the exploratory work. Many of AngloGold Ashanti (U.S.A.) Exploration Inc.’s Nevada operations respectively, comparedare currently conducted under what is generally referred to 3.6Mozunder federal law as a notice-level operation subject to 43 CFR § 3809.21. The federal Bureau of Land Management (BLM) issued a Notice of Decision for the Silicon Project approving the proposed exploration operations on 1 November 2017. Four amendments to the Notice of Decision have been authorized by the BLM in 2016letters dated 31 January 2018, 2 April 2018, 4 October 2018, and 4 March 2020.
AngloGold Ashanti (U.S.A.) Exploration Inc. has completed a subsequent permitting process for the Silicon Project to increase the exploration activities beyond the 5-acre notice level under federal and state law. This process was initiated in 2019 with the completion and submission of the required environmental baseline studies and the submission of a Plan of Operations and Reclamation Plan to the BLM and the state of Nevada Bureau of Mining Regulation and Reclamation (BMRR). In April 2020, the BLM published for public comment an environmental assessment for the Silicon Project as part of the subsequent permitting process. The comment period for the environmental assessment closed on 5 June 2020. On 24 July 2020, the BLM issued a Finding of No Significant Impact (FONSI) and Record of Decision approving the Plan of Operations and Reclamation Plan, subject to certain bonding requirements. On 31 July 2020, the BMRR also approved the Plan of Operations and Reclamation Plan and issued Reclamation Permit 0404. AngloGold Ashanti North America Inc., the owner of the Silicon Project, has subsequently increased its reclamation bond to $615,302. On 17 August 2020, Basin and Range Watch, Western Watersheds Project and Great Basin Resource Watch, three local opponents to the Silicon Project, filed a Notice of Appeal regarding the BLM’s FONSI and Record of Decision. The company is not required to suspend project work while the appeal is being considered. The aforementioned Notice of Decision for the Silicon Project and its four amendments are now part of the Silicon Project Plan of Operations.
The BLM issued a Notice of Decision for the Rhyolite North Project approving the proposed exploration operations on 14 January 2020. The Rhyolite North Project, situated within the Nye County of south-western Nevada, is wholly owned by AngloGold Ashanti North America Inc. It is an early-stage exploration project managed by AngloGold Ashanti (U.S.A.) Exploration Inc. and is currently comprised of 237 unpatented mining claims.
The BLM issued a Notice of Decision for the Transvaal Project approving the proposed exploration operations on 19 October 2020. The Transvaal Project, situated within the Nye County of south-western Nevada, is wholly owned by AngloGold Ashanti North America Inc. It is an early-stage exploration project managed by AngloGold Ashanti (U.S.A.) Exploration Inc. and is currently comprised of 505 unpatented mining claims.
Although BMRR also regulates mining within the state of Nevada, exploration projects of 5 acres or less, the scope of a notice-level operation under federal law, are exempt from BMRR regulation. AngloGold Ashanti’s current Rhyolite North and Transvaal exploration programs fall within this exemption.
72
In addition, AngloGold Ashanti (U.S.A.) Exploration Inc. intends to conduct exploration activities on four new projects in western Nevada. Those projects include Midnight Star (553 claims; 11,425.62 acres), Admiral (686 claims; 14,173.55 acres), Atlantis (613 claims; 12,665.29 acres) and Caspa (269 claims; 5,557.85 acres), totalling 2,121 new claims for 43,822.31 acres. These projects will be subject to the same regulatory requirements as our current projects in Nevada.
Minnesota
In Minnesota, AngloGold Ashanti Minnesota Inc. completed early-stage reconnaissance exploration activities to determine the potential for gold mineralization in the northern counties of Minnesota. Based on the achieved results, the company has decided to terminate its exploration activities in the state and has closed out activities in accordance with state and company requirements.
Potential regulatory changes
Over the years, the U.S. Congress has considered a number of proposed amendments to the General Mining Law and other federal statutes relating to mining. Among the significant features contained in previously proposed legislation were a production royalty obligation, new and more stringent environmental standards and conditions, additional reclamation requirements, extensive new procedural steps which would likely result in extended permitting timelines and granting counties the ability to petition the U.S. Secretary of the Interior to make certain areas unavailable for the location of unpatented mining claims. The U.S. Environmental Protection Agency has also proposed potential revisions to financial assurance requirements relating to mineral development activities. In June 2020, former President Trump signed an executive order directing certain federal agencies to streamline the review processes associated with permitting of infrastructure and natural resources projects. While this executive order may favorably affect the timing of our permit and project approvals, its impact is yet to be determined and remains uncertain.
AGA is currently unaware of any new federal or state legislative or regulatory changes or rule-making that has been proposed or enacted that would adversely affect its current exploration programs. If any requirements, standards or conditions were adopted in the future that imposed additional or new obligations or costs on AGA in connection with our exploration or extraction activities in the United States, the company’s operations in Nevada could be adversely affected.
MINE SITE REHABILITATION AND CLOSURE
Closure, an integral part of operations
All mining operations eventually cease. An integral aspect of operating AngloGold Ashanti’s mines is ongoing planning for and, where feasible, implementation of concurrent rehabilitation, together with an estimate of associated liability costs and the placement of adequate financial provisions and assurances to cover these costs.
AngloGold Ashanti revised its group closure planning management standard in 2013 and all of its operations are required to comply with the standard, as well as applicable law and regulations, as their closure plans are reviewed and updated.
Closure planning is an activity that starts at the exploration and mine design stage and continues throughout the life of mine:
•New projects include a closure plan which takes into account future closure and associated rehabilitation and other costs.
•The closure plan is reviewed annually and updated every three years (annually in the final three years of a mine’s life) or whenever significant changes are made, taking into account operational conditions, planning and regulatory requirements, international protocols, technological developments and advances in practice.
For many of the older mines, closure planning and the evaluation of environmental liabilities is a complex process. This is particularly so in Brazil and Ghana, where many of the mining and other operations have taken place for more than fifty years. A particular challenge is concurrent rehabilitation, which is carried out while a mine is still operational. This practice serves to decrease the ultimate liability and reduces the final rehabilitation and closure work that must be undertaken, but has the potential to sterilise Ore Reserve, which the company might wish to exploit should conditions, such as the gold price, change.
The company’s group closure standard stipulates that closure planning must be undertaken in consultation with the community. In the course of these consultations, different issues are raised which require site-specific solutions. Livelihood preservation and infrastructure are often key requirements. Communities also require information on the company’s rehabilitation of the landscape and on any lasting environmental impacts. Long-term remediation obligations, including decommissioning and restoration liabilities relating to past operations, are based on environmental management plans and compliance with current environmental and regulatory requirements.
Provisions for decommissioning and rehabilitation costs are made when there is a present obligation, it is probable that expenditure on decommissioning and rehabilitation work will be required and the cost can be estimated within a reasonable range of possible outcomes. These costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws and regulations presently or virtually certain to be enacted and previous experience in the rehabilitation of mine sites.
73
Decommissioning costs and restoration costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. Estimates are discounted at a costpre-tax rate that reflects current market assessments of salesthe time value of $3.3 billionmoney.
Provisions for decommissioning and all-in sustaining cost of $990/oz for subsidiariesrestoration (excluding joint ventures and $955/oz for equity accounted joint venture operations, respectively.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
In addition to post-mining land rehabilitation and closure requirements, AngloGold Ashanti is subject to extensive environmental, health and safety (EHS) laws and regulations in the various jurisdictions in which the company operates. These requirements govern, among other things, extraction, use, conservation and discharge of water; air emissions (including dust control and GHGs); regulatory and community reporting; clean-up of contamination; land use and conservation of protected areas; worker health and safety and community health; and the generation, transportation, storage and disposal of solid and hazardous wastes, such as reagents, radioactive materials, and mine tailings. Environmental laws and regulations applicable to our operations, including equity accounted joint ventures,the requirements contained in 2017 amounted to $953 million (2016: $811 million).environmental permits, are generally becoming more restrictive. Significant EHS requirements, risks and trends affecting our mining and processing operations are described below.
SOUTH AFRICA
As part of the South African asset sale, AngloGold Ashanti Limited sold its remaining three mining rights in South Africa to Golden Core Trade and Invest (Pty) Ltd (Golden Core) and Harmony Gold Mining Company Limited pursuant to a sale agreement concluded on or about 12 February 2020, as amended and reinstated from time to time (SA Sale Agreement). These mining rights relate to operations in the West Wits area. For further information on the South African asset sale, see “Item 18: Financial Statements—Note 9—Discontinued operations and assets and liabilities held for sale—South African asset sale”.
Pursuant to the SA Sale Agreement, AngloGold Ashanti and Golden Core executed a notarial deed of cession of the mining rights with DMRE references GP 30/5/1/2/2/01 MR and GP 30/5/1/2/2/248 MR to transfer and cede these mining rights to Golden Core (Deed of Cession). The Deed of Cession has been lodged for registration at the Mineral and Petroleum Titles Registration Office (MPTRO) to transfer such mining rights from AngloGold Ashanti to Golden Core. While the registration of the Deed of Cession is still pending, the risk in, benefit of, and ownership of these mining rights between the parties shall be deemed to have passed to the cessionary on 30 September 2020, the date of the notarial execution of the Deed of Cession, pursuant to clause 2 of the Deed of Cession.
With respect to the mining right held under DMRE reference GP 30/5/1/2/2/11 MR, AngloGold Ashanti and Golden Core agreed to make an application in terms of section 102 of the Mineral and Petroleum Resources Development Act, No. 28 of 2002 (MPRDA) at the Department of Mineral Resources and Energy (DMRE) after the closing date of the SA Sale Agreement requesting, among other matters, the incorporation of this mining right into the mining right with DMRE reference GP 30/5/1/2/2/01 MR (Harmony Consolidation Application). AngloGold Ashanti also executed a notarial conditional deed of abandonment pursuant to which it conditionally abandons this mining right in terms of section 56(f) of the MPRDA (Deed of Abandonment) on condition that ministerial consent is granted in respect of the Harmony Consolidation Application.
On the date of registration of the Deed of Cession and the grant of the Harmony Consolidation Application, AngloGold Ashanti will cease to be a holder of mining rights in South Africa. Once the transaction has been fully implemented, the general laws relating to mining outlined below will no longer be applicable to the company.
46
General laws relating to mining
The Mineral and Petroleum Resources Development Act
Mineral and Petroleum Resources Development Act, Amendment Act and Regulations
The MPRDA came into effect on 1 May 2004. The objectives of the MPRDA are, amongst other things, to allow for state sovereignty over all mineral and petroleum resources in the country, to promote economic growth and the development of these resources and to expand opportunities for the historically disadvantaged. Another objective of the MPRDA is to ensure security of tenure for the respective operations concerning prospecting, exploration, mining and production. By virtue of the provisions of the MPRDA, the state ensures that holders of mining and prospecting rights contribute to the socioeconomic development of the areas in which they operate. The Mineral and Petroleum Resources Development Amendment Act, No. 49 of 2008 (MPRDAA) was passed by the South African Parliament in 2008 and became effective on 7 June 2013. On 23 April 2004, the Minister of Mineral Resources and Energy (MRE Minister) published under the terms of the MPRDA the Mineral and Petroleum Resources Development Regulations in Government Gazette No. 26275 under GNR. 527 (MPRDA Regulations) in order to implement the provisions of the MPRDA and MPRDAA. On 27 March 2020, the MRE Minister published the Amendments to the MPRDA Regulations for Implementation (Revised MPRDA Regulations) in Government Gazette No. 43172 under GNR. 420.
The Mining Charter
Mining Charter, 2004
The Broad-Based Socio-Economic Empowerment Charter for the South African Mining Industry, 2004 (Mining Charter, 2004) was published in August 2004. The Mining Charter, 2004 was developed in terms of section 100(2)(a) of the MPRDA and took effect on 1 May 2004. The Mining Charter, 2004 committed all stakeholders in the mining industry to transfer ownership of 26 percent of their assets to black or historically disadvantaged South Africans (HDSAs) within 10 years. The Mining Charter, 2004 also set targets for, amongst other things, the advancement of HDSAs into management positions, the employment of women, procurement of goods and services from HDSA-owned companies, training, community development and the upgrading of mine housing. Mining companies are required to formulate plans to achieve the aforementioned targets, identify current levels of beneficiation and indicate opportunities for growth.
Mining Charter, 2010
Following a reviewof the progress made in the transformation of the mining industry against the Mining Charter, 2004 objectives, the DMRE amended the Mining Charter, 2004. The Amendment of the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2010 (Mining Charter, 2010) was published on 20 September 2010. The Mining Charter, 2010 retained the requirement to achieve a 26 percent HDSA ownership of mining assets by the year 2014, initially introduced under the Mining Charter, 2004.
Mining Charter, 2017
On 15 June 2017, the MRE Minister gazetted the Broad-Based Black Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry, 2017 (Mining Charter, 2017), which came into effect on the same day. The Mining Charter, 2017 sought to align the Mining Charter, 2010 with the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, in order to ensure meaningful participation of black people in the mining industry and to provide for policy and regulatory certainty to ease the investment in and development of the mining industry. The Minerals Council launched an urgent application at the High Court of South Africa (Gauteng Division) to interdict the implementation of the Mining Charter, 2017 and set it aside. The MRE Minister undertook to suspend the Mining Charter, 2017 pending the outcome of the DMRE/Minerals Council application. On 4 April 2018, judgement was handed down by the High Court and on 12 August 2020, the Minerals Council released a media statement indicating that the MRE Minister had withdrawn the notice of appeal to the Supreme Court of Appeal. Notwithstanding the repeal of the Mining Charter, 2017 by the adoption of the Mining Charter, 2018 (defined below), the findings of the High Court judgement remain relevant to mining right holders.
Mining Charter, 2018
On 27 September 2018, the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (Mining Charter, 2018) was published and became effective on the same date. The Mining Charter, 2018 repeals the Mining Charter, 2004; the Mining Charter, 2010; and the Mining Charter, 2017. The Mining Charter, 2018 stipulates that it is to be read together with implementation guidelines, gazetted on 19 December 2018. On 26 March 2019, the Minerals Council filed an application for judicial review to set aside certain provisions of the Mining Charter, 2018. On 5 May 2020, the High Court of South Africa (Gauteng Division) heard the application for judicial review. On 30 June 2020, the High Court held that certain affected communities and trade unions that were party to the legal proceedings relating to the Mining Charter, 2017 should be joined to this review application in respect of the Mining Charter, 2018 as respondents. The High Court has not yet decided on the merits of this review application. A key provision of the Mining Charter, 2018 is that existing mining right holders who have achieved the 26 percent HDSA ownership target shall be recognized as compliant for the duration of the mining right. However, the “the once empowered always empowered” principle shall not be applicable on the transfer or renewal of the mining right.
47
The BBBEE Act
The Broad-Based Black Economic Empowerment Act, No. 53 of 2003 (BBBEE Act) is a law of general application in respect of Broad-Based Black Economic Empowerment (BBBEE) and enables the Minister of Trade and Industryto drive BBBEE across all sectors of the economy. On 23 January 2014, the President of South Africa assented to the Broad-Based Black Economic Empowerment Amendment Act, No. 46 of 2013 (BBBEE Amendment Act). The BBBEE Amendment Act came into effect on 24 October 2014 with the object of amending the BBBEE Act to provide a framework of principles, strategies and guidelines aimed at promoting the broad-based socio-economic empowerment of HDSAs across the South African economy and society in the form of ownership, management, employment equity, skills development, preferential procurement, enterprise development and socio-economic development.
Land Expropriation
Constitutional Amendment Bill
On 27 February 2018, the National Assembly resolved to assign the Constitutional Review Committee (CRC) to review section 25 of the Constitution of the Republic of South Africa (Constitution) and other clauses where necessary to allow the state to expropriate land in the public interest without compensation. This resolution follows the African National Congress’s (ANC) resolution at its elective conference in December 2017 to pursue expropriation of land without compensation in a manner that does not destabilise the agricultural sector, endanger food security or undermine economic growth and job creation. In its report dated 15 November 2018, which was adopted by Parliament on 4 December 2018, the CRC recommended that section 25 of the Constitution be amended to make explicit that expropriation of land without compensation is a legitimate option for land reform. As a result, the draft Constitution Eighteenth Amendment Bill, 2019 (Constitutional Amendment Bill) was published for public comment on 6 December 2019. The Constitutional Amendment Bill proposes that, when land and any improvements thereon are expropriated for the purposes of land reform, the amount of compensation payable may be nil. The Constitutional Amendment Bill does not specify the circumstances in which a court may determine that the amount of compensation is nil, but states that national legislation must set out such circumstances. On 10 December 2019, the Constitutional Amendment Bill was referred to the National House of Traditional Leaders for comment by the end of January 2020. Provincial public hearings on the Constitutional Amendment Bill were held in February and March 2020. During May 2020, the Ad Hoc Committee to Amend Section 25 of the Constitution (Committee) met to discuss the extension of the mandate of the Committee, which would have lapsed at the end of May 2020. The Committee agreed that it should request an extension of its mandate until such time as gatherings are permitted, as the Committee had not completed its public hearings due to the COVID-19 pandemic. The Committee was re-established, pursuant to this request, on 30 June 2020. In order for the Constitutional Amendment Bill to be adopted by the South African Parliament, two-thirds of the members of the National Assembly, the lower house, and at least six out of the nine provinces of the National Council of Provinces, the upper house, must vote in favour of the amendment.
Draft Expropriation Bill
Separately, a draft expropriation bill (Expropriation Bill) was published for public comment on 21 December 2018. The Expropriation Bill was introduced in the National Assembly during October 2020 as the Expropriation Bill, 2020. The Expropriation Bill contains a provision to the effect that it may be just and equitable for nil compensation to be paid where land is expropriated in the public interest, having regard to all relevant circumstances, including if (i) the land is not being used and the owner’s main purpose is not to develop the land or use it to generate income, but to benefit from appreciation of its market value; (ii) an organ of state holds land that it is not using for its core functions and is not reasonably likely to require the land for its future activities in that regard, and the organ of state acquired the land for no consideration; (iii) notwithstanding registration of ownership in terms of the Deeds Registries Act, No. 47 of 1937, an owner has abandoned the land by failing to exercise control over it;(iv) the market value of the land is equivalent to, or less than, the present value of direct state investment or subsidy in the acquisition and beneficial capital improvement of the land; or (v) the nature or condition of the property poses a health, safety or physical risk to persons or other property. Public hearings on the Expropriation Bill have not yet been held.
Environmental laws relating to mining
National Environmental Management Act
The MPRDAA repealed the sections in the MPRDA providing for environmental regulation of mining and prospecting operations. This was the first step in migrating environmental regulation provisions from the MPRDA into National Environmental Management Act, No. 107 of 1998 (NEMA). NEMA was then amended by the National Environmental Management Amendment Act, No. 62 of 2008 and then again by the National Environmental Management Laws Amendment Act, No. 25 of 2014, and now includes provisions to deal with environmental regulation of mining and prospecting which provisions are administered by the MRE Minister. Pursuant to section 24N(8) of NEMA, directors of a company are jointly and severally liable for any negative impact on the environment, whether advertently or inadvertently caused by the company they represent, including damage, degradation and pollution. See also “Item 4B: Business Overview—Mine Site Rehabilitation and Closure” and “Item 4B: Business Overview—Environmental, Health and Safety Matters”.
48
From an environmental perspective, given the wide scope of the statutory duty of care in South African environmental law, erstwhile land owners may be held liable for historic contamination by the regulatory authorities. The duty of care primarily applies to persons responsible for or in control of the activity that caused the pollution, which includes erstwhile landowners and operators. The “polluter pays” principle in South Africa enables the competent authority to seek recourse against various responsible parties based on their historical or current relationship to the source and receptor of degradation or pollution. The duty of care also applies retrospectively to significant pollution or degradation that occurred before the entry into force of NEMA (i.e., 29 January 1999), as well as significant pollution or degradation that arises or is likely to arise at a different time from the actual activity that caused the contamination (e.g., latent or residual impact) or arises through an act or activity of a person that exacerbates pre-existing contamination. The authorities can also seek compensation in respect of clean-up measures that it is required to take on behalf of the responsible parties and apportion liability amongst the responsible parties, which could technically include a historic landowner or mining company that caused the pollution. Although the purchasers of AngloGold Ashanti’s assets in South Africa have contractually assumed all environmental liability associated with its former South African operations and agreed to indemnify AngloGold Ashanti for the same, there remains a risk, at least theoretically, of statutory liability to the state.
AFRICA REGION
Democratic Republic of the Congo (DRC)
General laws relating to mining
The mining industry in the DRC is primarily regulated by Law No. 007/2002 dated 11 July 2002 (2002 DRC Code), as amended by Law No. 18/001 dated 29 January 2018 (Reformed DRC Mining Code) and Decree No. 038/2003 dated 26 March 2003, as amended by Decree No. 18/024 dated 8 June 2018 (Reformed DRC Mining Regulations).
As regards the application of the Reformed DRC Mining Code and Reformed DRC Mining Regulations, Kibali Goldmines S.A. (Kibali) has reserved and continues reserving its rights, including, without limitation, its stability rights under, among other legal sources, the 2002 DRC Code. Discussions with the DRC government on these issues and the possible application of incentives that may be available under the Reformed DRC Mining Code and Reformed DRC Mining Regulations are ongoing.
Companies holding mining titles issued prior to the entry into force of the Reformed DRC Mining Code and Reformed DRC Mining Regulations have claims to a 10-year stability provision in accordance with prior mining legislation. Notwithstanding the adoption of the new regulatory regime, their rights with respect to such stability provision are reserved.
The Reformed DRC Mining Code grants the DRC Minister of Mines the authority to grant, refuse, suspend or terminate mineral rights, subject to conditions set out in the Reformed DRC Mining Code. Mineral rights may be granted in the form of exploration permits for an initial period of five years or in the form of mining permits which are granted for an initial period of 25 years. An exploration permit may, at any time before expiry, be transformed partially into a mining permit or a small-scale mining permit. Mining permits are granted upon successful completion of exploration and satisfaction of certain requirements, including approval of a feasibility study, an environmental impact study and an environmental management plan. To protect and enforce rights acquired under an exploration or mining permit, the Reformed DRC Mining Code provides, depending on the nature of a dispute or threat, administrative, judicial and national or international arbitral recourses.
The holder of a mining permit is required to commence development and mine construction within three years of the award of such permit. Failure to do so may lead to forfeiture of the mining permit. A permit holder must comply with specific rules relating to, amongst other things, protection of the environment, cultural heritage, health and safety, construction and infrastructure planning. Mining and exploration activities are required to be undertaken in a way that minimizes the impact on the interests of lawful occupants of land and surface rights holders, including their customary rights. The exercise of mineral rights by title holders which effectively deprives or interferes with the rights of occupants and surface rights holders requires payment of fair compensation by the mineral title holder.
Mining companies are required to grant a free-carried and non-contributory participation to the DRC government. The DRC government’s free participation was originally set at 5 percent, which was increased to 10 percent in respect of mining titles issued after the entry into force of the Reformed DRC Mining Code. All mining companies are required to grant an additional 5 percent free-carried participation to the DRC government upon each renewal of their exploitation permit. Under the Reformed DRC Mining Code, a 10 percent local contributory participation is also mandatory for mining titles issued after its entry into force.
Article 220 of the Reformed DRC Mining Code provides that the Prime Minister of the DRC may grant a number of incentives to provinces suffering from infrastructures deficits to encourage economic development from mining resources. Discussions are currently ongoing with the DRC government with respect to incentives that may be available under article 220 of the Reformed DRC Mining Code.
49
Tax laws relating to mining
The Reformed DRC Mining Code sets out an exclusive and comprehensive tax and customs regime that is applicable to mining activities. Mining title holders are subject, amongst other things, to a corporate income tax of 30 percent, a windfall tax of 50 percent (subject to certain prerequisites) and are required to pay mining royalties to the DRC government. The royalty rate applicable to gold has been set at 3.5 percent. Mining title holders are also required to contribute a minimum of 0.3 percent of total turnover to community development.
The standard rate of VAT is 16 percent and is applicable to all mining companies. In the DRC, Kibali is due certain refunds of VAT which, to date, remain outstanding. During 2020, AngloGold Ashanti recovered $2.23 million in the form of VAT offsets and refunds from its operations in the DRC. We believe that our attributable share of the recoverable VAT balance (including recoverable fuel duty and after discounting provisions) owed to us by the DRC government amounted to $69 million as of 31 December 2020. While an agreement was reached with the DRC government on the reimbursement of the refundable VAT in the last quarter of 2018, uncertainty remains regarding the timing and level of cash receipts and offsets against other taxes for purposes of the recovery of our VAT receivables in the DRC.
The Reformed DRC Mining Code also provides for a level of fiscal stability. A stability clause stipulates that existing tax, customs and exchange control provisions applicable to mining activities are guaranteed to remain unchanged for a period of five years from the enactment of the Reformed DRC Mining Code.
On 18 July 2012, the Convention between the government of the Republic of South Africa and the government of the DRC for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (Convention) came into effect. The Convention is applicable to (i) withholding taxes on amounts paid or credited on or after 1 January 2013; and (ii) other income taxes, levied in respect of taxable periods beginning on or after 1 January 2013. The Convention reduces the withholding tax on dividends paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 5 percent and on interest paid by companies resident in the DRC to companies resident in South Africa from 20 percent to 10 percent. A South African company must own at least 25 percent of a relevant DRC entity’s outstanding shares in order to take advantage of the reduced rates.
Foreign exchange control regime
The Reformed DRC Mining Code imposed new exchange control rules requiring that mining title holders repatriate onshore 60 percent of sale revenues received during the investment amortization period and 100 percent once the investment amortization is completed. As a result of these new rules, we were not able to fully repatriate dividends from our DRC operations to date. During 2020, AngloGold Ashanti repatriated $140 million from its operations in the DRC in the form of dividends received from Kibali (Jersey) Limited. Our attributable share of the outstanding cash balances awaiting repatriation from the DRC amounted to $424 million as of 31 December 2020. Our joint venture partner, Barrick Gold Corporation, which operates the Kibali gold mine, continues to engage with the DRC government regarding the Reformed DRC Mining Code and the cash repatriation.
AngloGold Ashanti’s rights and permits
AngloGold Ashanti holds a significant stake in the Kibali gold mine which is located in the north-eastern part of the DRC. The Kibali gold mine is owned by Kibali Goldmines S.A. (Kibali) which is a joint venture between Barrick Gold Corporation (45 percent), AngloGold Ashanti (45 percent) and Société Minière de Kilo-Moto S.A. (SOKIMO) (10 percent) which represents the interest of the DRC government. AngloGold Ashanti and Barrick Gold Corporation each have a 50 percent interest in Kibali (Jersey) Limited which holds our effective 45% interest in Kibali. The Kibali gold mine is operated by Barrick Gold Corporation.
The Kibali gold project comprises ten permits, of which seven expire in 2029 and three in 2030. Those permits cover an area of approximately 1,836 km2 in the Moto goldfields.
Ghana
General laws relating to mining
Control of minerals and mining companies
The Constitution of Ghana as well as the Minerals and Mining Act, 2006 (Act 703) (GMM Act) provide that all minerals in Ghana in their natural state are the property of the State and title to them is vested in the President on behalf of and in trust for the people of Ghana, with rights of reconnaissance, prospecting, recovery and associated land usage being granted under licence or lease.
The grant of a mining lease by the Ghana Minister of Lands and Natural Resources (LNR Minister) upon the advice of the Minerals Commission is subject to parliamentary ratification unless the mining lease falls into a class of transactions exempted by the Ghanaian Parliament.
50
The LNR Minister has the power to object to a person becoming or remaining a controller of a company which has been granted a mining lease if the LNR Minister believes, on reasonable grounds, that the public interest would be prejudiced by the person concerned becoming or remaining such a controller.
Except as otherwise provided in a specific mining lease, all immovable assets of the holder of a mining lease vest in the State upon termination, as does all moveable property that is fully depreciated for tax purposes. Moveable property that is not fully depreciated is to be offered to the State at the depreciated cost. A holder must exercise his rights subject to such limitations relating to surface rights as the LNR Minister may prescribe.
In 2019, Parliament passed the State Interests and Governance Authority Act, 2019 (Act 990) establishing the State Interests and Governance Authority (SIGA). The functions of SIGA include the oversight and administration of the State’s interests in state-owned enterprises, joint venture companies and other entities in which the State has an interest. This applies to mining companies on account of the Government’s mandatory free-carried equity interest in mining companies as provided for under the GMM Act. However, the Government of Ghana does not have a free-carried interest in any of AngloGold Ashanti’s mines in Ghana.
Stability and development agreements
The GMM Act provides for stability agreements as a mechanism to guarantee certain terms and conditions, mainly fiscal, to which a company’s operations are subject for a period of 15 years. Stability agreements are subject to ratification by Parliament. A development agreement, as provided for by the GMM Act, may be made available to a mineral right holder with a proposed investment exceeding USD 500 million. The GMM Act also provides that the terms of a development agreement may contain stability terms as provided for in stability agreements. A development agreement is subject to parliamentary ratification.
In January 2020, the Minerals Commission proposed certain amendments to the GMM Act, including, among other measures, the abolishment of development agreements and the shortening of stability agreements from a period not exceeding 15 years to a period of five years (with a possible extension of another five years). The Minerals Commission is currently engaging with stakeholders on these proposed amendments. Following this engagement, the Minerals Commission may present the proposed amendments to the LNR Minister who can then decide to submit a draft bill to Parliament. If such bill were to be adopted by Parliament, it would not apply retroactively. As a result, the proposed amendments will not have an impact on existing development agreements, including the Obuasi Development Agreement (as described below).
Ghana Stability Agreement
In 2004, AngloGold Limited and the Government of Ghana signed a stability agreement (Ghana Stability Agreement) governing certain aspects of the fiscal and regulatory framework under which the company would operate in Ghana for a period of 15 years following the implementation of the business combination between AngloGold Limited and Ashanti Goldfields Company Limited. Under the Ghana Stability Agreement, the Government of Ghana agreed, among other matters, to extend the term of the mining lease relating to the Obuasi mine until 2054 on terms existing prior to the business combination.
In June 2018, the Ghana Stability Agreement ceased to apply to the Obuasi mine as a result of the parliamentary ratification of a new development agreement and a new tax concession agreement in relation to the mine (as described below). However, the Ghana Stability Agreement continued to apply to the Iduapriem mine until it expired in April 2019. Since then, AngloGold Ashanti (Iduapriem) Limited (AGA Iduapriem) no longer benefits from the Ghana Stability Agreement. Relevant engagements are currently ongoing between AGA Iduapriem and the Minerals Commission to obtain a new agreement for the Iduapriem mine.
Obuasi Development Agreement
AngloGold Ashanti (Ghana) Limited (AGA Ghana) negotiated a new development agreement in relation to the Obuasi mine (Obuasi DA) with the Government of Ghana. On 21 June 2018, Parliament ratified the Obuasi DA which contains stability terms as provided for in stability agreements.
The Obuasi DA confers the following rights and obligations on AGA Ghana with respect to the Obuasi mine:
•Stabilization of the fiscal and regulatory framework (except for enactments promoting the use of Ghanaian goods and services) for a period of 10 years with a potential of it being extended for five years;
•Confirmation of accounting currency to be US dollars;
•Right to hold up to 80 percent of proceeds received from exporting minerals in foreign currencies outside of Ghana in accordance with existing arrangements;
•Obligation to set up a “Community Trust Fund” for Obuasi funded at $2 per ounce produced;
•Obligation to give preference to materials and goods made in Ghana as well as services provided by Ghanaians, entities incorporated or formed in Ghana and entities owned and controlled by Ghanaians;
•Obligation to give preference to Ghanaian skills where they are available;
•Obligation to employ high standards of safety; and
•Right to peaceful enjoyment and protection against expropriation.
51
Obuasi Tax Concession Agreement
The fiscal terms which will ordinarily form part of a single stabilisation document were separated from the Obuasi DA. Hence a separate tax concession agreement in relation to the Obuasi mine (Obuasi TCA) was signed with the Government. On 21 June 2018, Parliament ratified the Obuasi TCA with a concession period until 31 December 2027.
The key terms of the Obuasi TCA are as follows:
•Corporate Income Tax to be 32.5 percent or such lower rates as may be fixed by law (current statutory rate is 35 percent);
•Unutilised capital allowances carried forward by AGA Ghana which relate to the period before the effective date of the Obuasi TCA which have not already been utilised for the purposes of calculating taxable income shall continue to be carried forward until 31 December 2020;
•For the concession period, existing tax losses and new tax losses as well as a special concession to carry forward capital allowances to be converted into tax losses as at the end of 2020, will apply to AGA Ghana (whoever is the owner of AGA Ghana and whether or not AGA Ghana was to enter into a joint venture in respect of the Obuasi mine);
•Until 31 December 2021, exemptions of certain items from Import Duty;
•For the concession period, exemption of the following transactions from Capital Gains Tax:
•an issue of shares by a publicly listed company which holds a direct or indirect interest in AGA Ghana in connection with a raising of finance, an acquisition or a reorganization or an issue of shares by a company in connection with a new listing;
•transfers of shares in any publicly listed company which holds a direct or indirect interest in AGA Ghana other than a transfer of shares which results in a third party holding more than 35 percent of the shares in the listed company; and
•a reorganization of a company which holds a direct or indirect interest in AGA Ghana where following the reorganization the shareholders are substantially similar to those shareholders of the ultimate parent entity immediately prior to the transaction;
•For the concession period, non-application of section 62(1) of the Income Tax Act, 2015 (Act 896) in relation to change in underlying ownership under the following circumstances:
•a joint venture in relation to Obuasi gold mine;
•an issue of shares by a publicly listed company which holds a direct or indirect interest in AGA Ghana in connection with a raising of finance, an acquisition or a reorganization or an issue of shares by a company in connection with a new listing;
•transfers of shares in any publicly listed company which holds a direct or indirect interest in AGA Ghana other than a transfer of shares which results in a third party holding more than 50 percent of the shares in the listed company; and
•a reorganization of a company which holds a direct or indirect interest in AGA Ghana where following the reorganization the shareholders are substantially similar to those shareholders of the ultimate parent entity immediately prior to the transaction;
•For the concession period, sliding scale royalty rate ranging from 3 percent to 5 percent for a price ranging from $1,300 up to $2,000 and above per ounce instead of the current flat rate of 5 percent;
•Exemption from the payment of VAT on items imported under the Import Duty List up to 31 December 2023; and
•Entitlement to a refund of VAT credit at the pre-production stage notwithstanding that AGA Ghana will not meet certain conditions for qualifying for refunds.
Corporate regulation
Parliament passed the new Companies Act, 2019 (Act 992) which repeals the Companies Act, 1963 (Act 179). Act 992 introduced amendments to the regulation of companies in Ghana and establishes the Office of the Registrar of Companies as an autonomous office. As a general matter, Act 992 maintained the provisions of Act 179. It, however, introduces stricter requirements for persons who are to be appointed as directors of a company as well as for company secretaries. Companies are also required to appoint new external auditors every six years. Recent directives impose that, in case of rotation of auditors, a mandatory cooling-off period of at least six years should be observed. To ensure a smooth transition, companies are required to effect this change at their next scheduled annual general meeting, but no later than 1 August 2022.
A company is also not required to have bylaws or “regulations” as was the case under Act 179. Instead, a company may opt to have a registered constitution. Nevertheless , it is expected that the current regulations for AGA Ghana and AGA Iduapriem will be redrafted and filed at the Companies Registry. Further, a company is not required to have specific objectives as prescribed under Act 179. The implication of this change is that a company can carry out any type of business unless otherwise specifically stated in the company’s constitution.
52
Government’s Golden Share
Section 60(1) of the GMM Act provides that the Government of Ghana can require a mining company to issue for no consideration to the Republic of Ghana a special share (Golden Share) by notice in writing to such mining company. A Golden Share may only be held by or transferred to a Minister of the Government or any person acting on behalf of such Government and authorised in writing by such Minister. The Government of Ghana holds a Golden Share in AGA Ghana and the Obuasi DA confirms that the Government’s rights with respect to its Golden Share apply only in respect of AGA Ghana’s assets and operations in Ghana.
The following matters require, and will not be effective without, the written consent of the holder of the Golden Share:
•any amendment to or removal of the relevant provisions of the AGA Ghana Regulations setting out the rights and restrictions attaching to the Golden Share;
•the voluntary winding-up or voluntary liquidation of AGA Ghana;
•the redemption of or purchase by AGA Ghana of the Golden Share;
•the disposal of any mining lease held by AGA Ghana or any subsidiary of AGA Ghana; and
•any disposal by AGA Ghana (other than any disposal in the ordinary course of business of AGA Ghana) which, alone or when aggregated with any disposal or disposals forming part of, or connected with, the same or a connected transaction, constitutes a disposal of the whole or a material part of the assets of the AGA Ghana group taken as a whole.
Upon a return of assets in a winding-up or liquidation of AGA Ghana, the holder of the Golden Share is entitled to the sum of one Ghanaian cedi (GHS 1.0) in priority to any payment to other members, but the Golden Share confers no further right to participate in the profits or assets of AGA Ghana . The Golden Share carries no right to any dividend or any right to participate in any offer of securities to existing shareholders or in any capitalisation issue. The holder of the Golden Share is entitled to attend any general meeting of the members or any separate meeting of the holders of any class of shares. Furthermore, the holder of the Golden Share may require AGA Ghana to redeem the Golden Share at any time in consideration of the payment to such holder of one Ghanaian cedi (GHS 1.0).
Tax laws relating to mining
Fiscal regime
Currently, the main tax laws in Ghana include the following acts and regulations:
•Income Tax Act, 2015 (Act 896) (as amended) and Income Tax Regulations, 2016 (L.I. 2244);
•Customs Act, 2015 (Act 891) (as amended) and Customs Regulations, 2016 (L.I. 2248);
•Value Added Tax, 2013 (Act 870) (as amended) and Value Added Tax Regulations, 2016 (L.I. 2243); and
•Revenue Administration Act, 2016 (Act 915).
Various amendments have been made to these tax laws over the years. For example, recently, the Revenue Administration (Amendment) Act, 2020 (Act 1029) amended the Revenue Administration Act, 2016 (Act 915) to establish an Independent Tax Appeals Board to hear and determine appeals against tax decisions made by the Commissioner-General.
VAT
The provision of goods and services is liable to Value Added Tax (VAT) at a revised rate of 12.5 percent. In addition, there are separate levies, including a 2.5 percent National Health Insurance Levy and a 2.5 percent Ghana Education Trust Fund Levy.
Income taxes
In November 2015, Parliament passed the Income Tax Act, 2015 (Act 896) (ITA) which repealed the Internal Revenue Act, 2000 (Act 592), as amended, and became effective from 1 January 2016. The ITA ring fences and taxes income derived from mining operations at the rate of 35 percent. For the purpose of ascertaining the income of a person for taxation (including capital gains), each separate mineral operation is treated as an independent business and taxed accordingly, preventing mining businesses from deducting or setting off costs from one mining area with another’s income. The Obuasi TCA for AGA Ghana provides for a stabilised income tax rate of 32.5 percent. Pursuant to the Ghana Stability Agreement, the ITA did not apply to AGA Iduapriem until April 2019. Following its expiration, AGA Iduapriem currently pays income tax at the rate of 35 percent.
Ground rent (mineral concession rent)
The Fees and Charges (Amendment) Instrument, 2015 (L.I. 2208) was passed by Parliament on 23 December 2015 and fixed, among other things, the payment of ground rent by mining companies at GHS 15 cedis per acre per annum.
53
AGA Ghana is paying $670 (GHS 3,705 cedis) per km2 per annum for all the AGA Ghana leases. The Obuasi DA protects AGA Ghana from any increase in ground rent for the duration of that development agreement. AGA Iduapriem is also paying $670 (GHS 3,705 cedis) per km2 per annum for all the AGA Iduapriem leases.
Royalties
Under the Minerals and Mining (Amendment) Act, 2015 (Act 900), the Minister will prescribe the royalty rate payable and the manner of payment by passing a Legislative Instrument or other subsidiary legislation. The current royalty rate amounts to 5 percent.
The company is required to pay ground rent to the Government of Ghana (as described above) as well as such other fees as are prescribed by legislation, including royalties on timber felled within the lease area.
Minerals Income Investment Fund
The Minerals Income Investment Fund Act, 2018 (Act 978), which was amended by the Minerals Income Investment Fund (Amendment) Act, 2020 (Act 1024), establishes a fund to receive mineral royalties and related income from mineral rights holders and also provides for the disbursement and management of such royalties and related income. The Minerals Income Investment Fund also acts as a special purpose vehicle holding the Ghanaian Government’s carried interests in mining companies. No additional burdens are imposed on mining companies as the effect of this legislation is merely to substitute the legal person holding the Government’s carried interests.
Environmental laws relating to mining
In general, environmental laws and regulations in Ghana derive from the Constitution which imposes a duty on both the State and others to take appropriate measures to protect and safeguard the natural environment. Mining companies are required, under the GMM Act, Environmental Assessment Regulations, 1999 (L.I. 1652) and Water Use Regulations, 2001 (L.I. 1692), to obtain all necessary approvals from the Environmental Protection Agency (Ghana EPA), a regulatory body established under the Environmental Protection Agency Act, 1994 (Act 490), and, in appropriate cases, the Water Resources Commission and/or the Ghanaian Minerals Commission before undertaking mining operations. The Minerals and Mining (Health, Safety and Technical) Regulations, 2012 (L.I. 2182) also impose further obligations to obtain the necessary permits from the Inspectorate Division of the Ghana Minerals Commission for the operation of mines. The GMM Act also requires that mining operations in Ghana comply with all laws for the protection of the environment. Compliance with the relevant laws are enforced by a regime of sanctions, including imposition of fines and in some cases a term of imprisonment.
As part of the Ghanaian environmental laws and regulations, mining operations are required to undergo an environmental impact assessment process to obtain an environmental permit prior to commencing operations. Environmental Management Plans must be submitted to the Ghana EPA within 18 months after issuance of the environmental permit and then every three years thereafter. The plan must include details of the likely impacts of mining operations on the environment and local communities, as well as a comprehensive plan and timetable for actions to mitigate and remediate any adverse effects of the mining operations. Approval of the management plan results in the issuance of an environmental certificate.
In June 2014, the Ghana EPA and the Minerals Commission circulated draft Mining and Environmental Guidelines to all mining companies for comment. The guidelines concern environmental management, reclamation, closure requirements. In February 2021, the draft Mining in Forest Reserves Regulations were also sent to members of the Ghana Chamber of Mines for review. The Mining Community Development Scheme, which directly sponsors socio-economic development in communities in which mining operations take place or which are affected by mining activities, has since been established pursuant to the Minerals Development Fund Act, 2016 (Act 912).
Illegal and unsustainable mining practices
The Multilateral Mining Integrated Project (MMIP) is a 5-year project launched by the Government of Ghana in 2017 to address illegal and unsustainable mining practices in Ghana. The MMIP “combines a Legislation, Enforcement, Civil, Integrated and Technological Approach (LECITA) as a sustainable and structured yet regimented conjoint concept” to combat illegal mining. The MMIP involves (i) reviewing and enforcing the legal and regulatory regime of the small scale mining sector, (ii) reclaiming and rehabilitating degraded lands, (iii) dredging silted estuaries and waterways, (iv) implementing social interventions to facilitate livelihood creation in mining communities, (v) adapting technology to increase mining efficiency, processing, environmental protection and monitoring activities, and (vi) building the capacity of artisanal and small-scale miners and regulatory institutions.
In addition, other initiatives have been undertaken to combat illegal mining. For example, the Minerals and Mining (Amendment) Act, 2015 (Act 900) makes provision for the confiscation of the equipment of illegal miners and, as a result of recent illegal mining activities, the GMM Act was amended to increase penalties for illegal mining and expressly criminalise the aiding and abetting of illegal mining activities. The prescribed minimum sentence for illegal mining is now 15 years and maximum of 25 years for foreigners who engage in illegal mining.
54
Foreign exchange, export and other rules
Retention of foreign earnings
AngloGold Ashanti’s operations in Ghana are permitted to retain 80 percent of their foreign exchange earnings in an offshore foreign exchange account. In addition, the company has permission from the Bank of Ghana to retain and use US dollars, outside of Ghana, to fulfil payment obligations to the company’s hedge counterparties which cannot be met from the cash resources of its treasury company.
On 4 February 2014, the Bank of Ghana issued new directives as part of measures to streamline the collection and repatriation of export proceeds to Ghana. These directives included an instruction to all banks and authorised dealers to, within 5 working days of receipt of export proceeds, convert the proceeds into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 percentage in points (pips). Exporters with retention accounts were to continue to operate these accounts in accordance with their retention agreements. Retention proceeds which were sold to the banks were to be converted into Ghana cedis based on the average Interbank Foreign Exchange Rate prevailing on the day of conversion with a spread not exceeding 200 pips. It further advised that offshore foreign exchange transactions by resident companies, including exporters, were strictly prohibited and exporters were to ensure that all export proceeds are repatriated in full. Failure to comply with the provisions attracts penalties including pecuniary sanctions, jail terms, suspension and revocation of the operating licence as applicable.
Following engagement with relevant stakeholders, the Bank of Ghana issued another notice clarifying that the transfer of foreign exchange to meet external payment obligations remains permissible for transactions such as:
•redemptions and coupon payments on bonds held by non-residents;
•investment income, technology and management transfer entitlements, expatriate emoluments, and other incentive packages and overseas commitments under provisions in various legislation and legislative instruments such as the GMM Act, and the Technology Transfer Regulations, 1992 (L.I.1547); and
•other outward payments for imports of goods and services.
The notice also stated that all balances in Foreign Currency Accounts (FCAs) and Foreign Exchange Accounts (FEAs) will continue to be held in foreign currency and will not be converted into Ghana cedis. External transfers of up to $10,000 per annum without documentation from FEA and FCA are still permitted. Balances held in FEAs and FCAs continue to remain available for all legitimate external transactions.
The Bank of Ghana on 9 August 2014 further revised the rules on foreign exchange operations, effectively reversing the initial directives controlling transactions in foreign exchange. The key details are as follows:
•Exporters shall continue to repatriate in full export proceeds in accordance with the terms agreed between the trading parties. Such proceeds shall be credited to their FEAs and converted on a need basis;
•FEAs and FCAs will continue to be opened and operated as they were before the notices of 4 February 2014;
•Except for transfers from FEA to FCA which are still prohibited, all other transfers between accounts are permitted;
•FCAs shall be fed only with unrequited transfers such as transfers from abroad for investment or embassy transfers;
•FEAs shall be fed with foreign exchange generated from activities in Ghana such as proceeds from exports of goods and services; and
•The threshold for transfers abroad without initial documentation remains at $50,000.00.
Existing measures that were not amended by this notice continue to remain in force. The Bank of Ghana reiterated that the Ghana cedi remains the sole legal tender in Ghana. Therefore, pricing, advertising, invoicing, receiving, and making payments for goods and services should be done in Ghana cedis, unless otherwise authorised by the Bank of Ghana.
Rules regarding the export of gold and diamonds
The Bank of Ghana introduced new measures to regulate and monitor the export of gold and diamonds from Ghana in 2015. From 15 September 2015, all exports of gold and diamonds must be carried out through the Precious Minerals Marketing Company Ltd (PMMC), except where the exporter is the holder of a licence that permits it to export directly. The Ghana Revenue Authority (Customs Division) only permits gold to be exported by a licensed gold exporter who has a completed Form FEX A4 bearing Bank of Ghana’s embossment. The export measures do not apply to AngloGold Ashanti because the company holds a licence granted by the LNR Minister to sell and export its production.
The Bank of Ghana issued a notice (Notice No. BG/GOV/SEC/2016/02) which, among other things, allows mining companies to sell the portion of foreign exchange receipts from export that was earmarked for surrender to the Bank of Ghana directly to the commercial banks.
In November 2016, the Ministry of Lands and Natural Resources issued a ministerial directive appointing the PMMC as designated laboratory for assaying in Ghana. The directive requests all persons holding export licenses for gold to submit all gold
55
to be exported to the PMMC for assay before export. Mining businesses, including AngloGold Ashanti, acting through the Ghana Chamber of Mines were opposed to this directive due to its potential negative impact on mining companies in the region. As a result, the Chamber initiated proceedings to reverse or modify the directive. Following discussions in respect of the mining industry’s concerns, the Chamber and Government agreed on the modalities for implementing the national assaying policy and it was introduced in February 2018 following a one-month pilot among certain mining companies. A final document for the implementation of the program will be executed once the Chamber and the PMMC address a few outstanding issues regarding assaying methodologies.
Localisation and local participation policy
Mining companies must submit a detailed programme for the recruitment and training of Ghanaians with a view to achieving “localisation”, which is the replacement of expatriate personnel in a company’s Ghanaian operations by Ghanaian personnel. In addition, mining companies must give preference to Ghanaian products and personnel, to the maximum extent possible, consistent with safety, efficiency and economies. The Minerals and Mining (General) Regulations, 2012 (L.I. 2173) give further details on the localisation policy. On 15 October 2020, the Minerals and Mining (Local Content and Local Participation) Regulations, 2020 (L.I. 2431) were adopted in order to expand the scope of local content requirements in the mining industry. The Minerals Commission is tasked to publish a local procurement list of goods and services that must have Ghanaian content. Mining companies must also submit a five-year procurement plan to the Minerals Commission. Technical and engineering services generally must be provided by Ghanaian-owned companies subject to limited exceptions. Only the services of financial institutions incorporated in Ghana are to be procured and not less than 25 percent of transactions are required to be undertaken with financial institutions owned by Ghanaian citizens. Other services such as haulage, security, contract mining services for small-scale mining operations and supply of fuel are required to be provided by Ghanaians. Furthermore, if the planned capital expenditures of a holder of a mineral right exceeds certain limits set by the LNR Minister, it is required to list at least 20 percent of its equity on the Ghana Stock Exchange within five years after commencement of mining operations. In addition, there are also restrictions on the number of expatriates that can be employed by mineral rights holders and mine support service providers in a bid to enhance the participation of Ghanaians in the mining industry.
Imposition of restrictions
In March 2020, the Imposition of Restrictions Act, 2020 (Act 1012) was enacted to put in place measures to address the COVID-19 pandemic. It gives the President power to impose restrictions on persons in the event of an emergency, disaster or similar circumstance to ensure public safety, public health and protection. Numerous executive instruments have been issued in exercise of this power conferred on the President pursuant to this legislation to manage the pandemic.
AngloGold Ashanti’s rights and permits
Obuasi
The current mining lease for the Obuasi area was granted by the Government of Ghana on 5 March 1994. It grants mining concessions to land with an area of approximately 338 km2 in the Amansie East and Adansi West districts of the Ashanti region for a term of 30 years from the date of the agreement. In addition, a mining lease over an adjacent 140 km2 was also granted, resulting in the total area under the mining lease increasing to 474 km2. The Government of Ghana agreed to extend the term of the mining lease relating to the Obuasi mine until 2054. The mining lease was formally ratified by Parliament on 23 October 2008. On 3 March 2016, the Minerals Commission approved AGA Ghana’s application to surrender approximately 273.54 km2 of the area to the Government of Ghana, reducing the lease areas to 201.46 km2. The remaining parcel of land that will be subject to the mining lease is situated within various villages and townships in the region but excludes the municipality of Obuasi. On 15 January 2021, the Minerals Commission approved AGA Ghana’s application to relinquish a further 60.24 km2 of lease area, thereby reducing the lease areas to 141.22 km2, in order to avoid encroachment and illegal mining activities within the mine’s footprint while maintaining its social license to operate.
AGA Ghana is not required to pay annual mineral right fees as the AGA Ghana leases were granted prior to the enactment of the GMM Act which imposes such fees. The GMM Act provides that leases granted under laws subsisting immediately before the coming into force of the GMM Act shall continue to be governed by such pre-existing laws. As a result, the AGA Ghana leases are still regulated by the Minerals and Mining Law, 1986 (PNDCL 153), as amended (notwithstanding the repeal of PNDCL 153 by the GMM Act).
Iduapriem
The Iduapriem mine operates under four different mining leases: the Iduapriem Mining Lease (36.47 km2), the Ajopa Mining Lease (46.12 km2), the Teberebie Mining Lease (28.53 km2) and the Ajopa South Mining Lease (28.10 km2). Prior to all four mining leases expiring in 2018 and 2019, AGA Iduapriem submitted all relevant documents to apply for renewal of the leases. On 17 February 2020, the mining leases were extended for a further period of 15 years and will now expire in 2035. The Ajopa Mining Lease and the Ajopa South Mining Lease were ratified by the Ghanaian Parliament on 15 July 2020. The Iduapriem Mining Lease and the Teberebie Mining Lease were both ratified on 22 December 2020.
56
AGA Iduapriem is required to pay an annual mineral right fee of $178,000 with respect to the Iduapriem Mining Lease, $136,000 with respect to the Teberebie Mining Lease, $134,000 with respect to the Ajopa South Mining Lease and $220,000 with respect to the Ajopa Mining lease.
Guinea
General laws relating to mining
In Guinea, all mineral substances are the property of the State. Mining activities are regulated by Law L/2011/006/CNT dated 9 September 2011 as amended by Law L/2013/053/CNT dated 8 April 2013 and promulgated by Decree D/2013/075/PRG/SGG dated 17 April 2013 (together, the Guinea Mining Code).
The Guinea Mining Code is implemented by various decrees and orders, including Decree D/2014/015/PRG/SGG adopting a model of mining convention, dated 17 January 2014, Order A/2016/1584/MMG/SGG related to the administration’s capacities for the management of integrated mining projects (PARCA-GPI) and its steering committee, dated 6 June 2016, Decree D/2016/163/PRG/SGG on the national agency for the development of mining infrastructures (ANAIM), dated 13 June 2016, and Decree D/2016/215/PRG/SRG on the appointment of executives to the Ministry of Mines and Geology, dated 8 July 2016.
In 2017, Decree D/2017/285/PRG/SGG was adopted, which sets forth the conditions for the constitution and management of the Local Development Fund (Fodel), as well as Joint Order A/2017/6326/MMG/MATD/SGG, which sets forth the conditions for the use, management and control of the Fodel. Together, these set forth the use of the mining companies’ financial contribution to the development of the local communities and the rules applying to the Fodel, which was created under the Guinea Mining Code. In addition, Joint Order AC/2017/3228/MATD/MMG/SGG, issued by the Ministry of Territorial Administration and Decentralisation and the Ministry of Mines and Geology and dated 21 July 2017, updates the act on the establishment, attribution and functioning of the coordination committees in mining communities (CCLMS). The main purpose of the CCLMs, in which all concerned mining companies are represented, is to prevent and settle disputes that may arise in mining communities. On 13 July 2018, a Joint Order A/2018/5212/MEF/MMG/MB/MATD/SGG was issued, which regulates the use, management and monitoring of the resources allocated to local authorities pursuant to article 165 of the Guinea Mining Code. In 2019, an inter-ministerial committee was created to supervise and control the Fodel through the adoption of Joint Order AC/2019/089/MMG/MATD/SGG setting out the conditions for the constitution, powers and management of said inter-ministerial committee.
On 16 June 2020, a new procedure for the export of gold by mining companies was enacted through the adoption of Decree D/2020/113/PRG/SGG, which sets out, amongst other things: (i) when the industrial production tax referred to in article 161-1 of the Guinea Mining Code shall be paid, and (ii) the process to be followed to export gold bullion.
AngloGold Ashanti’s South Africanrights and permits
The right to undertake mining operations comprisedin Guinea can only be obtained by one of the following mining titles: surveying permit, small-scale mining licence, exploration licence, mining licence or mining concession.
The group’s Guinean subsidiary, Société AngloGold Ashanti de Guinée S.A. (SAG), has title to the Siguiri mine in the form of a mining concession, granted by virtue of Presidential Decree D/97/171/PRG/SGG, dated 4 August 1997, for a period of 25 years (Mining Concession). The Mining Concession was originally covered by a mining convention entered into with the Republic of Guinea in 1993 and amended in 2005. On 28 June 2016, SAG and the Government of Guinea concluded a revised and consolidated mining convention (Revised Convention de Base) which encompasses a renewal of the term of the original mining convention and other amendments necessary to support an expansion project to extend the life of the Siguiri mine (the Expansion). In compliance with the provisions of the Guinea Mining Code, the Revised Convention de Base was ratified by the Guinean National Assembly (Law L/2016/N°067/AN dated 30 December 2016, promulgated by Decree D/2017/015/PRG/SGG dated 24 January 2017), submitted to the Guinean Supreme Court which rendered a favourable opinion (Judgement N°AC 005 dated 16 January 2017), and ratified by the President of the Republic of Guinea (Decree D/2017/021/PRG/SGG dated 24 January 2017). It replaced the original mining convention and became effective on 24 January 2017.
Key elements of the Revised Convention de Base include the following:
•a duration of 25 years, expiring 23 January 2042, subject to further renewal if mining operations continue; the term of the Mining Concession is aligned with the term of the Revised Convention de Base such that the Mining Concession will be renewed as long as the Revised Convention de Base remains in force;
•SAG’s operations remain governed by the 1995 Guinea Mining Code (the prior mining code) and are only subject to the provisions of the Guinea Mining Code to the extent they are expressly set out in the Revised Convention de Base;
•the stability of the customs and tax regime is guaranteed for the entire initial term of the Revised Convention de Base, and subject to certain conditions being met, any renewal period(s);
•the Republic of Guinea holds a 15 percent free-carried/non-contributory interest;
•the Republic of Guinea is entitled to a royalty on gold of 5 percent based on a spot gold price as per LBMA fixing (PM) up until the date of steady state commercial production of the first phase of the Expansion, after which the royalty rate applicable to gold will vary depending on threshold prices as per LBMA fixing (PM), namely: 3 percent if the gold price is USD 1,300 or less, 5 percent, if above USD 1,300 and up to USD 2,000 and 7 percent if above USD 2,000;
57
•SAG benefits from 5-year income tax holiday from the beginning of steady state commercial production of the first phase of the Expansion, after which the income tax rate is set at 30 percent;
•a local development tax of 0.4 percent is payable on the sale price for gold and silver received by SAG up until 31 December 2027, after which it will be increased to 0.6 percent;
•salaries of expatriate employees are subject to a 10 percent income tax;
•goods imported into Guinea for purposes related to the construction and commissioning of the first phase of the Expansion are exempt from all customs taxes and duties; and
•SAG is committed to adopting and progressively implementing a plan for the effective rehabilitation of the mining areas disturbed or affected by its operations.
The Mining Concession covers an area divided into four deep-levelblocks totaling approximately 1,495 km2. SAG has the exclusive right to explore and mine in any part of the concession area for the duration of the Revised Convention de Base. The Revised Convention de Base also grants SAG the option to secure certain land rights over additional areas currently covered by exploration permits, but to which SAG may need access for purposes of establishing roads or storage of tailings.
The Revised Convention de Base is subject to early termination if the parties formally and expressly agree to it, if the last of the mining title held by SAG expires or is relinquished without any renewal application having been filed, if all project activities are voluntarily suspended for a continuous period of 12 months or are permanently abandoned by SAG, or if SAG goes into voluntary liquidation or is placed into liquidation by a court of competent jurisdiction.
Mali
General laws relating to mining
The mining industry in Mali is primarily regulated by Ordinance No. 2019-022/P-RM dated 27 September 2019 containing the new mining code of the Republic of Mali (2019 Mali Mining Code) and Decree No. 2020-0177/PT-RM dated 12 November 2020 implementing the 2019 Mali Mining Code. On 8 December 2020, Decree No. 2020-0288/PM-RM enacted the new model mining convention referred to in Decree No. 2020-0177/PT-RM.
The 2019 Mali Mining Code applies to the mining operations previously carried out by AngloGold Ashanti entities in Mali (as further described below) except with respect to the validity, scope and duration of their exploitation permits and the provisions on tax and customs regime contained in their mining conventions for their remaining duration. In this regard, the transitory rules of the 2019 Mali Mining Code specify that mining conventions in force remain valid for their remaining term and their holders continue to benefit from the stability of the tax and customs regime set out therein.
Exploration and prospecting activities are carried out under exploration authorisations (autorisation d’exploration) or exploration permits (permis de recherche). Exploration authorisations and exploration permits give their holder the exclusive right to carry out exploration activities over a given area. Exploration authorisations are granted for a non-renewable period of three months, while exploration permits are granted for a period of three years renewable twice for additional 3-year periods. Applications for exploration authorisations and exploration permits must contain various documents attesting to the financial and technical capacity of the applicant as well as a detailed works and costs programme. Exploration authorisations are granted by the Mining Administration (Administration chargée des Mines) while exploration permits are granted by Ministerial Order.
A large scale permit exploitation permit (permis d’exploitation de grande mine) is required to mine a deposit located within the area of an exploration permit. The large scale exploitation permit grants an exclusive right to exploit the named substances and proceed with the processing and commercialisation of the substances extracted within its perimeter. Large scale exploitation permits are granted for a maximum period of 12 years renewable for 10 year-periods until depletion of the deposits. The large scale exploitation permit is granted only to the holder of an exploration permit and covers only the area governed by the exploration permit. An application must be submitted to the Mining Administration (Administration chargée des Mines) and must contain various documents attesting to the financial and technical capacity of the applicant, a feasibility study, a detailed environmental study in respect of the impact of the project on the environment, an environmental permit, a closure and rehabilitation plan as well as a community development plan. The large scale exploitation permit is granted by decree of the Head of Government. As soon as the large scale exploitation permit is granted, the permit holder must incorporate a company under the laws of Mali. The permit holder will assign the large scale exploitation permit for free to this company. The State will have a 10 percent free-carried interest in the company. This interest will be converted into priority shares and the State’s participation will not be diluted in case of an increase in capital. In addition, the company is required to ensure that private Malian investors are offered the possibility to acquire 5 percent of their capital.
All mining titles mentioned above (save for the exploration authorisation) require an establishment convention (convention d’établissement) to be signed by the State and the titleholder defining their rights and obligations, the duration of which is 20 years.
58
AngloGold Ashanti’s rights and permits
Historically, AngloGold Ashanti had interests in the Morila, Sadiola and Yatela gold mines, all of which were governed by establishment conventions covering exploration, mining, treatment and marketing in a comprehensive document. These documents include general provisions regarding exploration (work programme, fiscal and customs framework) and exploitation (formation of a local limited liability mining company, State interest, fiscal and customs framework governing construction and exploitation phases, exchange controls, marketing of the product, accounting regime, training programmes for local labour, protection of the environment, reclamation, safety, hygiene and dispute settlement).
AngloGold Ashanti together with its joint venture partner Barrick Gold Corporation completed the sale of their entire interests in Société des Mines de Morila S.A., the company operating the Morila gold mine in Mali, to Firefinch Limited (previously named Mali Lithium Limited) on 10 November 2020. At the time of the sale, mining of ore had ceased at the Morila gold mine.
AngloGold Ashanti together with its joint venture partner IAMGOLD Corporation completed the sale of their entire interests in Société d’Exploitation des Mines d’Or de Sadiola S.A., the company operating the Sadiola gold mine in Mali, to Allied Gold Corp on 30 December 2020. At the time of the sale, mining of ore had ceased at the Sadiola gold mine.
In April 2017, Société d’Exploitation des Mines d’Or de Yatela S.A. (Yatela), the company operating the Yatela gold mine, began the implementation of a closure plan in order to relinquish the property. In February 2019, AngloGold Ashanti and its joint venture partner IAMGOLD Corporation announced an agreement to sell each of their 40% interests in Yatela to the Government of Mali, which holds the remaining 20% interest. The transaction is subject to the fulfilment or waiver of a number of conditions precedent and AngloGold Ashanti remains committed to its completion despite recent political instability and related events in Mali which have delayed completion of the sale from the originally anticipated timeline. Yatela’s exploitation permit covers approximately 212 km2. Yatela has a 30-year permit which expires in 2030.
Tanzania
General laws relating to mining
Tanzania Mining Act and Tanzania Mining Regulations
Mineral rights in the United Republic of Tanzania are principally governed by the Mining Act, 2010 (No. 14) (Tanzania Mining Act) as amended in 2017 by the Written Laws (Miscellaneous Amendments) Act, 2017 (No. 7) and which was revised and published by the Attorney General of Tanzania on 30 October 2018 as the Mining Act, Chapter 123 (R.E. 2018), and the Mining Regulations, 2010 (Tanzania Mining Regulations), as amended in 2018, which include: Mining (Mineral Beneficiation) Regulations, 2018 as amended in 2019; Mining (Minerals and Mineral Concentrates Trading) Regulations, 2018 as amended in 2019; Mining (Radioactive Minerals) Regulations, 2018; Mining (Local Content) Regulations, 2018 as amended in 2019; Mining (Geological Survey) Regulations, 2018; Mining (Audit and Inspection of Records) Regulations, 2018; and Mining (Designated Minerals Certification) Regulations, 2019. Other regulations are: Mining (Environmental Protection For Small Scale Mining) Regulations, 2010; Mining (Safety, Occupational Health and Environmental Protection) Regulations, 2010; Mining (Mineral and Gem Houses) Regulations, 2019; Mining (Mining Shareholding and Public Offering) Regulations, 2016 as amended in 2017; Mining (Diamond Trading) Regulation, 2019; Natural Wealth and Resources (Permanent Sovereignty) Code of Conduct for Investors in Natural Resources Regulations, 2020 (Permanent Sovereignty Regulations); and The Natural Wealth Contracts (Review and Re-Negotiation of Unconscionable Terms) Regulations, 2020. The application of the Code of Conduct under the Permanent Sovereignty Regulations extends to employees, agents, suppliers and consultants and requires them to comply with other binding instruments and decisions made based on such instruments, in addition to policies, laws and regulations. The Permanent Sovereignty Regulations make it mandatory to seek the advice of an office bearer or the office of Attorney General, if the requirements of the Code, provisions of the Mining Act or other instruments relating to natural wealth and resources become ambiguous, unclear or in conflict resulting into uncertainty. Further, the Code of Conduct requires investors to conduct periodic reviews in respect of their compliance with such legislation in order to prevent the occurrence of matters prohibited by the laws of Tanzania. The Code also requires every investor to sign and submit an integrity pledge.
The Tanzania Mining Act and the Tanzania Mining Regulations came into force in November 2010 followed by amendments to the Tanzania Mining Act in 2017 and subsequent amendments to the Tanzania Mining Regulations in 2018 and 2019.
Amendments of the Tanzania Mining Act and the Tanzania Mining Regulations
As mentioned above, the Tanzania Mining Act was amended in 2017 followed by an amendment of the Tanzania Mining Regulations in 2018 and 2019 and, together with an Executive Order introducing, introduced the following:
•Dissolution of the Tanzania Minerals Audit Agency whose functions and powers have now been transferred to the Geological Survey of Tanzania (GST);
•Dissolution of the Mining Advisory Board and introduction of the Tanzania Mining Commission. The functions and powers of the Mining Advisory Board have been taken over by the Mining Commission, including the functions of the Commissioner for Minerals. However, the Mining Commission has been made responsible for matters related to auditing and monitoring of
59
mineral production in Tanzania. The Mining Commission has powers to audit quality and quantity of mineral produced and exported by mining entities, financial records of mining entities for the purposes of tax assessments, and environmental management expenditures of the mining entities for the purpose of assessment of compliance to the mine closure plan. Mineral rights holders were required to submit all geological information in their possession to the GST;
•A local content requirement for procurement of goods and services: the Tanzania Mining Act requires that mining companies must give: (i) first consideration to good and services provided or manufactured in Tanzania where they meet mining industry specifications (established by the Standards Authority / internationally acceptable standards), (ii) first consideration for employment to qualified Tanzanians, and (iii) adequate provision for on-the-job training of Tanzanians. Specific minimum local content thresholds are specified in Schedule 1 to the Tanzania Mining Regulations. These will be determined by the Mining Commission alongside the work programme. The relevant Minister may prescribe additional minimum local content thresholds;
•To qualify for holding a Mining Licence in Tanzania, 5 percent of a licensee’s equity must be held by Tanzanians, with 80 percent of its managerial positions held by Tanzanians and 100 percent of other positions held by Tanzanians, in addition to the shareholding of the Government of Tanzania pursuant to Section 10 of the Tanzania Mining Act (i.e. free-carried interest). This amount is determined, and may be varied, by the relevant Minister;
•Establishment of the Local Content Committee (LC Committee) which will oversee the implementation of the Tanzania Mining Regulations and which is composed of a member of the Mining Commission, the Director of Labour and Employment, a member of the Tanzania Private Sector Foundation, the CEO of the Geological Survey of Tanzania, the head of legal services at the Ministry for Minerals and the Executive Secretary of the Mining Commission. The LC Committee sets minimum standards for local content plans and reports to the Mining Commission;
•Establishment of various Tanzanian bodies, including the (i) Geological Survey, (ii) Mineral and Gem Houses, (iii) National Gold and Gemstone Reserve, (iv) Government Minerals Warehouse, (v) National Minerals Resources Data Bank, and (vi) Mining Cadastre;
•Introduction of a statutory procedure for the conduct of Corporate Social Responsibility (CSR), whereby a company is required to prepare annually a CSR plan jointly agreed with the local government authorities in consultation with the Minister for Finance and the Minister for Local Government Authorities; and
•Cancellation of retention licences, with rights over such licences to revert to the Government of Tanzania.
Minimum shareholding and public offering
The Mining (Minimum Shareholding and Public Offering) Regulations, 2016 came into force by Government Notice No. 286 published on 7 October 2016 and revised by amendment on 24 February 2017. On 10 January 2018, the Government of Tanzania published its new Tanzania Mining Regulations, 2018, which contain, amongst others, the implementation provisions of the amended Tanzania Mining Act.
The regulations set out the requirement to sell shares to Tanzanian nationals, by way of a public offering and listing on the Dar es Salaam Stock Exchange, which will apply to companies that are carrying out large scale mining operations. The regulations also require all existing holders of a special mining licence to list a minimum of 30 percent of their shares on either the Main Investment Market or the Enterprise Growth Market Segment of the Dar es Salaam Stock Exchange within 6 months of the regulations coming into force, which was on 24 February 2017. However, the company believes the listing requirement conflicts with the mining development agreement.
In September 2020, the Government of Tanzania published the Mining (Minimum Shareholding and Public Offering) (Amendment) Regulations, 2020, by means of Government Notice No. 181, which exempts companies holding special mining licences from local listing requirements if such mining company has entered into an agreement with the Government of Tanzania that provides for a non-dilutable free-carried interest in such mining company and an economic benefits sharing arrangement.
Arbitration
Along with other major mining companies, AngloGold Ashanti’s subsidiaries are seeking a constructive dialogue with the Government of Tanzania to gain assurances that the Geita gold mine will not be affected by the legal and fiscal changes mentioned above, given their mining development agreements which guarantee fiscal and regulatory stability as well as an agreement between all parties before material legal and regulatory changes are made. As a precautionary step to safeguard its interests, AngloGold Ashanti commenced international arbitration proceedings against the Government of Tanzania in connection with the enactment of this legislation in July 2017. These arbitral proceedings were stayed until 12 March 2021 in order to afford the parties the opportunity to achieve an amicable resolution of the dispute and as a result of the impact of the COVID-19 pandemic. On 15 March 2021, and due to continuing COVID-19 issues in sub-Saharan Africa, we requested a further extension to stay the proceedings. This request is pending with the arbitral tribunal.
The arbitration action against the Government of Tanzania seeks declaratory relief in accordance with the terms of the mining development agreement to preserve the company’ and its shareholders’ rights and interests in the Geita gold mine, including confirmation from the Government of Tanzania that the company is exempt from the listing requirement. The arbitration
60
proceedings also seek to confirm that AngloGold Ashanti does not, as a result of its existing mining development agreement, fall within the scope of the new mining legislation, under which the Government of Tanzania has the right to (i) renegotiate existing mining agreements at its discretion, (ii) receive a free-carried interest of no less than 16 percent in all mining projects, and (iii) acquire up to 50 percent of the shares of the mining company commensurate with the total tax expenditure incurred by the Government in favour of the mining company, and which includes an increase in the rate of revenue royalties from 4 to 6 percent and a 1 percent clearance fee. AngloGold Ashanti can provide no assurance that the new mining legislation, including the listing requirement, will not apply to its operations in Tanzania and the outcome of the arbitration action may have a material adverse impact on the company’s results of operations and financial condition. See also “Item 8A: Legal Proceedings—Tanzania”.
Categories of mineral right licences
Ownership of and control over minerals on, in or under the land vest in the President of the United Republic of Tanzania. No person is allowed to prospect for minerals or carry on mining operations except pursuant to the authority of a mineral right licence granted, or deemed to have been granted, under the Tanzania Mining Act or its predecessor acts. To enable a company to prospect or mine, the Tanzania Ministry of Minerals (MEM) initially grants an exclusive prospecting licence. Upon presentation of a feasibility study, together with certain other environmental, social and financial assurances, the MEM may then grant a form of licence for mining. Licensing decisions take into account the abilities of the company (including its mining, financial and technical capabilities), projected rehabilitation programmes, environmental compliance and the payment of royalties.
Three categories of licences can be applied for under the Tanzania Mining Act: licences for exploration, licences for mining, and licences for ancillary activities. Licences for exploration include prospecting licences and gemstone prospecting licences. Licences for mining include special mining licences (if the proposed capital investment is equal to at least USD 100 million), mining licences (if the proposed capital investment is equal to between USD 100,000 and USD 100 million) and primary mining licences (reserved for Tanzanian citizens). Licences for ancillary activities include processing licences, smelting licences and refining licences. For purposes of AngloGold Ashanti’s Geita gold mine, only prospecting and special mining licences are relevant.
Prospecting licence
A prospecting licence grants the holder the exclusive right to prospect in the area covered by the licence for all minerals within the class of minerals applied for. The classes that can be applied for include, amongst others, metallic minerals, energy minerals, gemstones other than kimberlitic diamonds and kimberlitic diamonds. Holder of prospecting licences have the obligations to: (i) commence prospecting operations within three months or such further period as the Mining Commission may allow from the date of the grant of the licence or the date as stated in the licence as commencement date; (ii) give notice to the Mining Commission on discovery of any mineral deposit of potential commercial value; and (iii) adhere to the prospecting programme which is attached to the licence and expend on prospecting operations not less than the amount prescribed.
An application for a prospecting licence is made to the Mining Commission and the licence, once granted, is valid for an initial term of four years. After the initial term, the licence is renewable for a further period of three years, with no option for renewal thereafter. Upon renewal, 50 percent of the area covered by the licence must be relinquished. A company applying for a prospecting licence must, amongst other things, state the financial and technical resources available to it. A prospecting licence is not freely transferable and requires the Mining Commission to register any transfer of a prospecting licence. The Mining Commission will refuse to register the transfer unless the transferee proves that it meets the financial and technical capability criteria required to apply for such licences. Holders of prospecting licences over a tenement will not automatically have first right to any mining licence granted over that tenement. However, in practice, they will be best positioned to meet the requirements to be granted a form of licence for mining.
Special mining licence
Mining is mainly carried out through either a mining licence or a special mining licence, both of which confer on the holder the exclusive right to conduct mining operations in or on the area covered by the licence. A special mining licence is granted for the shorter of either the estimated life of the ore body indicated in the feasibility study report or such period as the applicant may request. It is renewable for a further period not exceeding the estimated life of the remaining ore body. Special mining licences have certain fiscal and other advantages over mining licences, as the holder of a special mining licence may enter into a mining development agreement with the Government of Tanzania to guarantee the fiscal stability of a long-term mining project and make special provision for the payment of royalties, taxes, fees and other fiscal imposts. A special mining licence holder may, in certain circumstances, unilaterally amend the programme of the mining operations agreed with the MEM.
The holder of a special mining licence may apply for renewal of its licence at any time but no later than one year before the expiry of the licence. The renewal shall not be for a period exceeding the estimate life of the remaining ore body. The Mining Commission may reject an application for renewal if: (i) the applicant is in default; (ii) the applicant was issued with a notice of default and failed to rectify the default or the default is capable of remedial; (iii) the development of the area has not proceeded with reasonable diligence as agreed in the relevant mining development agreement; (iv) minerals are not produced in workable quantities; (v) the program of intended mining operations for the renewal will not ensure proper development of resources; and (vi) the applicant does not have the relevant environmental certificate as required by the Environmental Management Act, 2004
61
(No. 20). Except in the case of a special mining licence, a mineral right may be freely transferred by its holder (in whole or in part) to another person or entity without requiring consent from the Mining Commission which is the relevant licensing authority. The grant and assignment of a special mining licence generally requires the approval of the Cabinet after the Mining Commission has forwarded the application to the Minister of Minerals for further approval. There are limited exceptions to the requirement for the licensing authority’s consent (such as transfers to an affiliate company of the licence holder or to a financial institution or bank as security for any loan or guarantee in respect of mining operations).
Tax laws relating to mining
Finance Act
The Finance Act, 2015 (No. 16) came into force on 1 July 2015 and contains a provision for a 30 percent capital gains tax on the sale of shares by an offshore parent company. This provision was introduced by the Finance Act, 2012 (No. 8) and in this legislation, additional changes were also made to the procedure for payment of capital gains tax by the seller of shares. Tax at the rate of 30 percent is payable by way of an initial instalment of 20 percent on the transfer, based on the notional gain that the seller would make after a further instalment of the remaining 10 percent is due.
The Finance Act, 2017 (No. 4) came into force on 1 July 2017 and both imposes and revises certain taxes, duties, levies and fees. It further amends certain written laws relating to the collection and management of public revenue. Among other provisions, it has introduced inspection or clearance fees on the exportation or domestic use of minerals. Such exportation or domestic use is restricted unless such minerals have been inspected or cleared at the mining areas, ports, airports, border or posts and the clearing fee of 1 percent of the gross value of the minerals has been paid by the exporter or any other person in possession thereof.
Value Added Tax Act
Effective 20 July 2017, the Value Added Tax Act, 2014 (No. 5) (VAT Act) was amended by the Written Laws (Miscellaneous Amendments) Act, 2017 (No. 7) in order to restrict VAT relief for VAT input tax paid by mining companies on goods and services. Prior to the enactment of this amendment to the VAT Act, mining companies were entitled to 100% VAT relief in respect of the goods and services they purchased. The amendment prohibits refunds for VAT input tax incurred on a series of raw products, including the exportation of “raw minerals”. Subsequently, the Tanzania Revenue Authority (TRA) denied our applications for VAT input credit refunds, which amounted to a total of $139 million as of 31 December 2020, covering the period from July 2017 onwards, on the basis that all of the gold doré that we export constitutes “raw minerals” for purposes of the VAT Act. In response, the company filed formal notices of objection with the TRA stating that the exportation of gold doré is, in its view, not covered by the restriction since doré does not fall within the category of “raw minerals” as used in the VAT Act. On 22 February 2019, the Tanzania Mining Act was amended by the Written Laws (Miscellaneous Amendments) Act, 2019 (No. 2) to introduce a definition for “raw minerals” which supports our interpretation that gold doré is excluded from the prohibition. On 1 July 2020, the Finance Act, 2020 (No. 8), amended the VAT Act, without retrospective effect, in order to remove the restrictions on VAT input tax credits for the exportation of “raw minerals” as well as a series of other raw products. This recent amendment confirms the technical basis for VAT input tax recovery for mineral exporters from July 2020 onwards. Discussions with the TRA are ongoing to resolve our historical claims for VAT input credit refunds for the period from July 2017 to June 2020, while VAT claims from July 2020 onwards are subject to verification procedures by the TRA before any refunds will be received.
Local Government Levies
As mentioned below, following the signature of an addendum to the mining development agreement, Geita gold mine is required to pay local government a service levy of 0.3 percent of its gross annual turnover in line with the Local Government Finances Act, 1982 (No. 9).
Environmental Management Fees and Charges
The Environmental Management (Fees and Charges) (Amendment) Regulations, 2016 (EM Regulations), which came into effect on 2 May 2016, introduced new fees in relation to the review of the Environmental Impact Assessment on projects by the National Environmental Management Council (NEMC). According to the EM Regulations, the fees involved amount to 0.1 percent of the total project costs or the minimum amount of TZS 25 million (approximately $11,000). However, the EM Regulations have not defined the term “project cost” nor have they provided a detailed breakdown on the determination of the project cost.
Labour laws
On 15 September 2015, the Non-Citizens (Employment Regulation) Act, 2015 (No. 1) (Non-Citizens Act) came into force which vests powers concerning work permits with the Labour Commissioner. Therefore, non-citizens wishing to be employed in the country are required to apply and be granted a work permit before applying for a residence permit. Before granting the work permit, the Labour Commissioner must be satisfied that all efforts have been explored to acquire a local expert. Further, the
62
company is required to submit a succession plan which sets out a well-articulated plan for the transfer of the non-citizen’s knowledge and expertise to Tanzanian citizens. Moreover, the Commissioner General of Immigration is required to take into consideration conditions of the work permit issued by the Labour Commissioner when granting a residence permit. In addition, the Non-Citizens Act introduced the Short-Term Permit (STP) which is granted to non-citizens who wish to work in the country for a period of not more than six months. Foreigners intending to work in Tanzania for more than three months are required to apply for an STP. The application for an STP is made to the Ministry of Labour and Employment.
Transparency and accountability laws
In 2015, the Tanzania Extractive Industries (Transparency and Accountability) Act, 2015 (No. 23) (TAA) came into force. The TAA establishes the Tanzania Extractive Industries (Transparency and Accountability) Committee (TAA Committee), an independent Government entity which is an oversight body for promoting and enhancing transparency and accountability in the extractive industry. The TAA Committee has powers under the TAA to impose obligations on specified extractive industries and statutory recipients to receive information on reconciliation on payments made and revenues received by the Government of Tanzania. In addition, an extractive industry is required under the TAA to submit to the TAA Committee annual reports containing information on local content and corporate social responsibility. The TAA also mandates that all concessions, contracts and licences are made public as well as all revenue collected from the extractive industry. Further implementing regulations require companies in the extractive industry to keep records of payments, beneficial ownership information, cost of production, exploration, prospecting, award or transfer of license, capital expenditure, volume of production and export date in respect of the granted licence.
Natural resources legislation
The Government of Tanzania enacted two laws in respect of natural resources that came into force in July 2017: the Natural Wealth and Resources Contracts (Review and Re-negotiation of Unconscionable Terms) Act, 2017 (No. 6) (Unconscionable Terms Act) and the Natural Wealth and Resources (Permanent Sovereignty) Act, 2017 (No. 5) (Permanent Sovereignty Act and together with the Unconscionable Terms Act, the Natural Resources laws). In January 2020, it also published implementing regulations, including the Natural Wealth and Resources (Review and Re-negotiation of Unconscionable Terms) Regulations, 2020 and the Natural Wealth and Resources (Permanent Sovereignty) (Code of Conduct for Investors in Natural Wealth and Resources) Regulations, 2020.
The Natural Resources laws provide that Tanzania has sovereignty over its natural resources and require that all arrangements or agreements that relate to “natural wealth and resources” are subject to review by the National Assembly. Such agreements must fully secure the interests of the people of Tanzania. During a review all unconscionable terms as interpreted in accordance with the law are expunged from the agreement. The laws also require that new natural resources agreements are reviewed by the Government. The natural wealth and resources of Tanzania shall be inalienable and remain as the property of the people of Tanzania held in trust by the President.
In addition, under the laws, disputes over natural wealth and resources will not be subject to any proceedings in any foreign court or tribunal. As a result, investors are restricted from accessing international dispute resolution mechanisms. Accordingly, companies are now required to adopt Tanzanian law and local dispute resolution in all mining agreements. As such, all disputes will be handles by Tanzanian judicial bodies or any other Tanzania government body vested with powers to resolve disputes.
Moreover, every undertaking must demonstrate “guaranteed returns into the economy” from all earnings accrued or derived from such extraction, exploitation or acquisition and use. In addition, to ensure that the Government and the people of Tanzania obtain an equitable stake in the exploitation of mining resources, all project earnings must be retained in Tanzanian banks. Investors are also prevented from freely exporting raw minerals and repatriating funds.
Section 6 of the Unconscionable Terms Act specifically provides that where there is an unconscionable term, the National Assembly may pass a resolution for re-negotiation of the agreement whereupon the Government shall serve notice to the investor to re-negotiate the term or agreement. The Government and the particular investor have 90 days from the notice date to re-negotiate the term or agreement. This period can be extended if both parties consent. If both parties fail to revise the unconscionable term, the term will be deemed removed from the agreement.
A term is considered “unconscionable” under the Unconscionable Terms Act if, among other grounds, the requirements or provisions of the agreement restrict the right of the state to exercise authority over foreign investment within the country and in accordance with the laws of Tanzania, are inequitable and onerous to the state, secure preferential treatment designed to create a separate legal regime to be applied discriminatorily for the benefit of a particular investor, deprive the people of Tanzania of the economic benefits derived from subjecting natural wealth and resources to beneficiation in the country, or subject the state to the jurisdiction of foreign laws and foreign courts or tribunals.
Tanzania Shipping Agencies Corporation
In February 2019, the Tanzania Shipping Agencies Corporation (TASAC) issued a public notice informing the general public that, effective 4 March 2019, all clearing and forwarding services relating to import and export of goods and items as specified under
63
section 7(1)(a) of the Tanzania Shipping Agencies Act, 2017 (No. 14), which include minerals, mineral concentrates and products and extracts related to minerals, shall exclusively be handled by TASAC. Concerned about the impact on their operations, mining companies as well as other interested parties lodged an appeal to the Minister of Transportation. As a result, the effective date of the notice was delayed and the imposition of prescribed fees was suspended, while TASAC continued to provide services to its clients. On 5 February 2021, the Government published the Tanzania Shipping Agencies (Shipping Business Fees, Charges and Commission) Order in the Government Gazette through Government Notice No. 181 of 2021, which reduced the prescribed fees and eliminates certain other charges for the clearing and forwarding services provided by TASAC, including in connection with the handling of the company’s export of gold bullion and import of certain goods.
AngloGold Ashanti’s rights and permits
The Geita gold mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania. AngloGold Ashanti has concluded a mining development agreement with the Ministry of Minerals on 24 June 1999 and was issued a special mining licence covering approximately 196 km2 for a period of 25 years, which expires on 26 August 2024.
On 9 October 2014, an addendum to the mining development agreement was entered into ratifying the following changes:
•An increase in the royalty rate from 3 percent to 4 percent with effect from 1 May 2012;
•With effect from the financial year 2015, the capital allowance applicable to the unredeemed qualifying capital expenditure (15 percent per annum) referred to in section 18(a) of the Income Tax Act, 1973 (No. 33) shall no longer apply; and
•With effect from 1 July 2014, Geita Gold Mining Limited is liable to pay the Geita District Council Levy at a rate of 0.3 percent on turnover (no longer capped at USD 200,000 per annum as provided under Article 4 of the company’s mining development agreement).
In March 2020, Geita Gold Mining Limited received the consent of the Minister of Minerals to change the mining method under its special mining license from open pit to underground method, subject to the requisite terms and conditions.
AUSTRALIA
General laws relating to mining
In Australia, with a few exceptions, all onshore minerals are owned by the Crown. The respective Minister for each state and territory is responsible for administering the relevant mining legislation enacted by the states and territories.
Native title legislation applies to certain mining tenements within Australia. Australia recognises and protects a form of native title that reflects the entitlement of Aboriginal people to their traditional lands in accordance with their traditional custom and laws. Should native title claims or determinations exist, certain native title processes and procedures will apply under the Native Title Act 1993 (Cth) (Native Title Act) before the tenure is granted. Tenure may be granted subject to conditions relating to native title rights. In the mining context, native title matters are managed as part of the tenement grant process. If disputes arise in relation to the grant of a particular tenement, they can be referred to the National Native Title Tribunal, established under the Native Title Act, for resolution. Native title legislation also provides a framework for compensation to be paid for acts that affect native title rights and interests. Ordinarily, the relevant Commonwealth or State government is liable to pay compensation for acts attributable to it. However, in the state of Western Australia, the Mining Act 1978 (WA) provides that an applicant for the grant of, or the holder of, a mining tenement is responsible for native title compensation, if determined to be payable, to native title holders.
Federal, state and territory Aboriginal and non-Aboriginal heritage laws operate in parallel to the native title legislation. State and territory heritage laws exist predominantly for the purposes of managing the impact of developments on sites, objects and areas of heritage significance. Where an area of heritage significance is placed on the national or world heritage registers, federal approval processes may also apply. To date, there has not been any significant impact on any of AngloGold Ashanti’s tenure due to native title or heritage legislation.
AngloGold Ashanti’s operating properties are located in the state of Western Australia where tenure is issued under, and mining operations are governed by, the Mining Act 1978 (WA). The most common forms of tenure in Western Australia are exploration and prospecting licences, mining leases, miscellaneous licences and general purpose leases. In most Australian states, if the holder of an exploration licence establishes indications of an economic mineral deposit in the area covered by the exploration licence and complies with the conditions of the grant, the holder of the exploration licence has a priority right against all others to be granted a mining lease which gives the holder exclusive mining rights with respect to minerals on the property. In Western Australia, a general purpose lease may also be granted for one or more of a number of permitted purposes. These purposes include erecting, placing and operating machinery and plants in connection with mining operations, depositing or treating minerals or tailings and using the land for any other specified purpose directly connected with mining operations.
It is possible for an individual or entity to own an area of land (including for infrastructure purposes) and for another individual or entity to be granted the right to explore for or mine any minerals located on or under the surface of the same area. The maximum initial term of a mining lease in Western Australia is 21 years and the holder has the right to renew the lease for an additional 21
64
years. Subsequent renewals are granted at the discretion of the respective state or territory’s minister responsible for mining rights. In Western Australia, mining leases can only be assigned with the prior written consent of the minister.
Tax laws relating to mining
Government royalties are payable by the holder of mining tenure in respect of minerals obtained from the relevant area of land at the rates specified in the relevant legislation in each state or territory. The royalty on gold production in Western Australia is payable quarterly at a fixed rate of 2.5 percent of the royalty value of gold metal produced. The royalty value is calculated by multiplying the amount of gold produced during a given month by the average gold spot price for that month. In addition, the holder of a mining tenement is required to pay annual rent in respect of the tenement. In Western Australia there is a minimum annual expenditure requirement for prospecting and exploration licences and mining leases. Exemptions from the expenditure requirement can be obtained if certain conditions are satisfied.
Environmental laws relating to mining
Mining tenements will be granted with endorsements and conditions relating to protection of the environment. Exploration and mining operations may also require separate approval from the state, territory or federal environment minister, which may require completion of an environmental impact assessment (including a public consultation period) pursuant to applicable environmental protection legislation prior to commencement. Further, a works 'construction' approval and an operating licence under the relevant environmental protection legislation in the state or territory may also be required for certain mine processing or mining-related operations. Depending on the jurisdiction, further separate approval may be required for the removal of native vegetation within the tenement, and the taking and use of water for exploration and mining operations.
AngloGold Ashanti’s rights and permits
AngloGold Ashanti has been granted 21-year term mining leases with rights of renewal to all of its mining areas in Australia, including its proportionate share of joint venture operations and accordingly it has, together with its joint venture partners where applicable, the exclusive right to mine in those areas. Both the group and its joint venture partners are fully authorised to conduct operations in accordance with relevant laws and regulations. The mining leases and rights of renewal cover the current life-of-mine at AngloGold Ashanti’s operations in Australia.
At Sunrise Dam the deposit is now situated upon two mining leases covering approximately 7,808 hectares and another mining lease of 1,768 hectares contains related infrastructure. Both leases are currently in good standing, with expiry dates in 2038.
At Tropicana, the deposit is situated upon a single mining lease covering approximately 27,228 hectares, which is currently in good standing, with an expiry date in 2036.
AngloGold Ashanti is also conducting early stage exploration activities in Queensland under the Mineral Resources Act 1989 (QLD). AngloGold Ashanti holds 13 exploration permits covering 358,700 hectares. Each permit is granted with an initial term of five years, renewable for two further periods of not more than five years each.
AMERICAS
Argentina
General laws relating to mining and land ownership
Mining regime
The Argentinean Mining Code governs mining activity in the country. Special regimes exist for hydrocarbons and nuclear minerals. In the case of most minerals, the Argentinean Mining Code establishes that the owner of the land is not the owner of the mineral rights; these are held by the national or provincial governments (depending on the location of the minerals). The national or provincial government, as applicable, is required by the Argentinean Mining Code to grant whomever discovers a new mine title to the mining concession.
The Argentinean Mining Code regulates exploration permits and mining concessions. Exploration permits grant their holders exclusivity rights to any mineral discoveries, including those made by a third party within the exploration area covered by the permit. Exploration permits are limited in time and as to the extent of the exploration area, are subject to the payment of a single-time fee, and also require a minimum exploration work programme and schedule to keep the permit in force.
The Argentinean Mining Code also regulates mining concessions, or exploitation rights. Priority for receiving a mining concession is given to the registered discoverer of the mine, which holds the exploration permit. Once the application for a mine has been submitted, the applicant may commence works and must submit a legal survey of the units requested for the new mine. The application and the legal survey may be opposed by third parties following specific proceedings set forth in the
65
Argentinean Mining Code. Approval and registration of the legal survey by the provincial mining authority constitutes formal title to the mining concession.
Holders of mining concessions must comply with three main conditions: payment of an annual fee, investment of a minimum amount of capital, and the carrying out of a reasonable level of exploitation. Failure to do so could lead to forfeiture of the mining concession, which would then revert back to the Province.
In addition to the Argentinean Mining Code, between 1993 and 1995, Argentina implemented several federal laws to offer foreign companies attractive incentives for exploration and mining in Argentina, the Mining Investment Law (Law No. 24, 196), as amended (Mining Investment Law), and related legal provisions being the most important one. Such incentives include, amongst others, import duty exemptions, accelerated depreciation of fixed assets, a three percent cap on provincial royalties set at pit-head value on the mineral extracted, value added tax refunds for exploration-related expenses incurred by companies registered under the Mining Investment Law, and, subject to the filing of a feasibility study for the relevant mining project, a 30-year stability as to the tax burden on the project and the customs and foreign exchange regimes and duties. Cerro Vanguardia S.A. (CVSA) obtained its tax, customs and foreign exchange stability certificate in 1996.
Glacier Law
On 30 September 2010, the National Law on Minimum Requirements for the Protection of Glaciers (Law No. 26, 639) (Glacier Law) was enacted in Argentina, banning new mining exploration and exploitation activities on glaciers and “peri-glacial” areas. The Glacier Law also subjects on-going mining activities in those areas to an environmental audit. If such audit results in material impacts on glaciers and “peri-glacial” areas, the relevant authority is empowered to take action, including suspension or relocation of the activity. The Glacier Law establishes a broad definition of “peri-glacial” areas that, together with glacial areas, must be surveyed by an existing national government agency specifically appointed to this end every five years. The area where the Cerro Vanguardia project is located does not include any glaciers or peri-glacial areas according to the inventory of glaciers which was published in June 2018. The constitutionality of the Glacier Law has been challenged by some mining companies along with the Province of San Juan (which hosts large mining projects), but the National Supreme Court of Justice of Argentina rejected these claims on 4 June 2019.
Rural Land Law
On 27 December 2011, the Argentinean National Congress passed a law on the Regime for Protection of National Domain over Ownership, Possession or Tenure of Rural Land (Law No. 26, 737) (Rural Land Law) which implemented a set of rules restricting the ownership of rural land by foreigners (including foreign individuals or any kind of legal entity controlled by foreign individuals or legal entities). The main restrictions are as follows: (i) foreigners cannot own in the aggregate more than 15 percent of the entire rural land of Argentina, the same cap being applicable to each Province and Municipality; (ii) foreigners will not be allowed to purchase more than 1,000 hectares in the so-called “zona núcleo”, which comprises the main agricultural areas of central Argentina or an “equivalent” surface depending on the location of the land and its productive potential; and (iii) foreigners will not be allowed to buy land that contains, or is adjacent to, relevant and permanent water bodies (such as rivers and lakes). Although exploration permits and mining concessions are not the subject matter of the restrictions placed by the Rural Land Law, certain rights granted to foreign mining companies under the Argentinean Mining Code may be restricted by this new law. For example, the right that holders of mining concessions currently have to force the surface owner to sell the land to the holder of the mining concession might be restricted if the concession holder is a foreign individual or a legal entity controlled by foreigners.
Federal Mining Agreement
On 13 June 2017, the national government and the provinces in whose territories the main mining projects of Argentina are located, signed the New Federal Mining Agreement (FMA). The purpose of the FMA is, amongst other things, to increase provincial revenues from the mining industry by creating legal entities owned by provincial governments that would work in association with private mining companies. This scheme is not new in Argentina and it has been used by some provincial governments, amongst them the Santa Cruz Province (through Fomicruz), in which the Cerro Vanguardia project is located. The FMA also contemplates other forms of revenues such as the formation of special trusts to be funded by mining companies in order to finance education, health and other programmes. Additionally, the FMA included setting forth mining royalties up to three percent of the gross value of commercialised minerals, without any deductions other than VAT. As the FMA has not yet been converted into law by the National Congress, its provisions are neither binding nor enforceable.
In Argentina, the current regulatory regime of royalty payments is expected to change and several different options and payment thresholds have been discussed. In December 2012, the Santa Cruz Province changed the mining royalty from one percent to three percent calculated at pit-head value of the mineral extracted thus bringing it to the cap of the Mining Investment Law.
Foreign exchange control regime
On 1 September 2019, by means of Executive Decree No. 609/2019 (Decree), the Argentinean national government reinstated foreign exchange and export controls. The Decree and related regulations of the Central Bank of Argentina impose, among other
66
measures, the obligation of Argentinean residents to transfer to Argentina and/or sell for Argentinean pesos in the Argentinean foreign exchange market (mercado de cambios) the countervalue (contravalor) from their exports of goods within a specified time period. This period depends on the goods exported and the relationship between the Argentinean exporter and the foreign importer and ranges from 15 to 365 calendar days counted as of the date on which the Argentinean customs authorities certify the shipment to the export destination. Regardless of the applicable maximum term, the proceeds from the export must be transferred and sold in the Argentinean foreign exchange market no later than five business days from the date of collection.
The export of goods is regulated by Communication “A” 6882 of the Argentinean Central Bank (as modified) which establishes the specific regulatory requirements in order to implement the measures adopted by the national government in this area. In accordance with these Central Bank regulations, the exporter shall select a financial institution to track each export transaction through the SECOEXPO (Seguimiento de las negociaciones de divisas por exportaciones de bienes) tracking system which is administered by the Argentinean Central Bank. The selected financial institution must determine the amount and deadline to settle the export proceeds and shall register the amounts allocated to each export transaction in the tracking system. Upon the expiration of the applicable term to transfer and sell the export proceeds, the designated financial institution must inform the Argentinean Central Bank, through the SECOEXPO tracking system, if the exporter has complied with its obligations or not.
As a general rule, prior approval of the Argentinean Central Bank is required to access the foreign exchange market for transactions relating to the outflow of funds, except in certain circumstances. For example, no prior approval is required when all holdings in foreign currency in Argentina are deposited in accounts with financial institutions and the amount of “liquid external assets” available at the beginning of the day in which access to the foreign exchange market is effected is lower than the equivalent of $100,000. “Liquid external assets” include, among others: holdings of foreign currency bills and coins, coined or good delivery gold, demand deposits in foreign financial institutions and other investments which allow for immediate liquidity in foreign currency (such as investments in foreign government securities, funds in investment accounts held abroad, crypto-assets, funds in payment service providers, etc.). Reserve or guarantee funds created under financing transactions or derivatives transactions entered into abroad are not considered liquid external assets. There are also certain circumstances in which the $100,000 limit will not be considered to have been exceeded. Furthermore, the Argentinean Central Bank is not required to give prior approval when a commitment is given to settle through the foreign exchange market, within five business days of their availability, any funds received abroad as collection of (i) loans granted to third parties, (ii) term deposits, or (iii) the sale of any kind of asset, when each of such had been granted, created or purchased after 28 May 2020. In addition, no prior approval is required when the client files an affidavit stating that: (i) as of the date on which access to the foreign exchange market is requested it has not sold securities against foreign currency in Argentina or transferred such securities to depository entities abroad in the past 90 calendar days, and (ii) undertakes not to arrange sales of securities against foreign currency in Argentina or transfers thereof to depository entities abroad from the moment it requires access and for the subsequent 90 calendar days.
From 30 December 2020 until 31 March 2021, prior approval from the Argentinean Central Bank is not required for payments in connection with the import of goods if certain conditions are satisfied. To qualify, the financial entity should hold an affidavit from its client stating that the total amount of payments associated with its imports of goods made through the foreign exchange market as from 1 January 2020, including the intended payment, does not exceed by more than $1 million the amount resulting from the following sum:
•The amount for which the importer would have access to the foreign exchange market when calculating imports of goods under the SEPAIMPO (Sistema de seguimiento de pagos de importaciones) monitoring system and that were made official between 1 January 2020 and the day prior to accessing the foreign exchange market; plus
•The amount of deferred or on-demand payment of imports of goods of the following transactions not included in the previous point: (i) operations shipped as from 1 July 2020 or previously shipped that have not arrived in Argentina before that date, (ii) aimed to cancel commercial debts with export credit agencies, foreign financial entities or guarantees thereof, (iii) made by the public sector, business organizations where the Argentinean government has majority participation or public trusts, (iv) with pending customs registration of supply of critical medicines, and (v) purchase of kits for the detection of COVID-19; minus
•The amount pending to be regularised for repayment of imports with pending customs registration made between 1 September 2019 and 31 December 2019.
CVSA had a cash balance of $137 million equivalent as at 31 December 2020, of which $50 million is currently eligible to be declared as dividends. Application has been made to the Argentinean Central Bank to approve $11 million of this eligible amount to be paid offshore to the company, however, approval remains pending. The cash is fully available for CVSA’s operational requirements.
Export duties
On 21 December 2019, the National Law on Social Solidarity and Productive Reactivation (Law No. 27, 541) (Solidarity Law) was enacted. The Solidarity Law grants the national government power until 31 December 2021 to impose export duties which may not exceed certain caps. For example, the Solidarity Law provides that export duties on mining exports cannot exceed eight percent of the taxable value or official FOB price. On 2 October 2020, the national government published Decree No. 785/2020
67
(Export Duties Decree) which sets an export duty rate of eight percent for certain goods, including doré bars and gold alloys. The Export Duties Decree will be applicable until 31 December 2021 and revokes the provisions of Decree No. 793/2018 which had previously set the export duty at 12 percent ad valorem. These export duties, if not compensated with other tax reductions, affect the tax stability guarantee granted to CVSA in 1996 in light of the fact that at the time export duties were zero percent.
On 26 February 2019, the Argentinean tax and mining authorities published a resolution (RC 4428/2019) establishing an administrative procedure to be followed in order to obtain the reimbursement or compensation of federal taxes paid in excess of the total tax burden provided for by the applicable tax stability guarantee. CVSA initiated this new procedure in order to claim compensation for the export duties it paid in 2018 and 2019 as export duties are not contemplated by its tax stability guarantee. Prior to the publication of RC 4428/2019, CVSA had already submitted to the tax authorities claims for reimbursement of the export duties it paid from 2008 to 2015.
Pursuant to the new administrative procedure, the National Mining Secretariat issued a favorable opinion regarding CVSA’s claim in respect of fiscal year 2018, which amounted to approximately $4.0 million as of 31 December 2020. This claim is currently under review by the relevant customs authorities. The National Mining Secretariat has not yet issued an opinion in respect of CVSA’s claim in respect of fiscal year 2019, which amounted to approximately $12.3 million as of 31 December 2020.
Furthermore, CVSA has requested the tax authorities to apply the procedure provided for in RC 4428/2019 in respect of its historical claims for fiscal years 2008 to 2015 during which the imposition of export duties also exceeded CVSA’s total tax burden under its tax stability guarantee. However, these claims, which amounted to approximately $6.1 million as of 31 December 2020, are still being reviewed under the rules to challenge export duties instead of the new procedure provided for in RC 4428/2019. CVSA has appealed the application of those rules and a decision on this issue is pending.
Environmental laws relating to mining
Any mining company wishing to commence or modify any mining-related activity, as defined by the Argentinean Mining Code, including prospecting, exploration, exploitation, development, preparation, extraction, and storage of mineral substances, as well as property abandonment or mine closure activity, is required to prepare and submit to the competent provincial environmental authority an Environmental Impact Assessment (EIA) prior to commencing the work. Each EIA is required to describe the nature of the proposed work, its potential risk to the environment, and the measures that will be taken to mitigate that risk. If accepted by the competent authority, the EIA is used as the basis to create a Declaration of Environmental Impact (DEI) to which the mining company is required to adhere during the mining-related activity at issue. The DEI is required to be updated at least on a biannual basis. Sanctions and penalties for non-compliance with the DEI are outlined in the Environmental Protection section of the Argentinean Mining Code, and may include warnings, fines, suspension of quality certifications, restoration of the environment, temporary or permanent closure of activities, and withdrawal of authorisation to conduct mining-related activities.
AngloGold Ashanti’s rights and permits
In the case of Cerro Vanguardia, AngloGold Ashanti’s operation in Argentina, the mining concession holder is AngloGold Ashanti’s partner, Fomento Minero de Santa Cruz S.E. (Fomicruz). On 27 December 1996, Fomicruz entered into a usufruct agreement whereby CVSA was granted an irrevocable right to exploit the Cerro Vanguardia deposit (encompassing an area of approximately 543 km2) for a 40-year period, which expires on 26 December 2036. CVSA is a corporation incorporated in Argentina indirectly controlled by AngloGold Ashanti, with Fomicruz as minority shareholder. On 14 August 1996, CVSA obtained its tax, customs and foreign exchange stability certificate, which expires in 2026.
Brazil
General laws relating to mining and land ownership
The Brazilian Constitution of 1934 states that, for purposes of exploration and exploitation, deposits and other Mineral Resources constitute property separate from the soil and belong to the Federal Union. Exploration and exploitation of such Mineral Resources may take place only with the Federal Union’s concession and in such a way as to protect the national interest. Federal law sets out penal and administrative sanctions for conduct and activities deemed harmful to the environment.
In Brazil, the National Mining Agency (ANM) is the state body within the Mines and Energy Ministry (MME) that is responsible for: (i) the registration of mining titles, (ii) the grant of authorisations and concessions, (iii) the supervision of mining activities and mining titleholders, and (iv) the issuance of supplementary rules in relation to mining activity.
Under the current Brazilian Mining Code, there are two kinds of mines: (i) claimstake mines (minas manifestadas), for which rights were acquired before 1934 and exist independently of any mining licence or authorisation from the Federal Government and for which the Mineral Resources constitute property of the landowner and (ii) granted mines, which are those that rely on grants from the Federal Government for mineral exploration or exploitation (pursuant to the Brazilian Constitution of 1988). AngloGold Ashanti’s operations in Brazil consist of both claimstake mines and surface production facilities. They are:granted mines.
68
Mining activities in granted mines must be performed in two defined stages: (i) exploration, which entails defining and evaluating the deposit and determining the feasibility of exploitation, and (ii) exploitation, which involves coordinating operations aimed at the industrial exploitation of the mineral deposit, from the extraction of useful minerals to their processing. Exploration authorisations issued by ANM are valid for one to three years. Extensions can be obtained if necessary, as long as it is justified. In contrast, exploitation rights, once granted, are valid for the lifetime of the deposit, provided the mining titleholder complies with all legal requirements. Pursuant to these requirements, for example, titleholders must (i) start work on mineral exploitation within six months from the date of publication of the Exploitation Concession, (ii) continue their mining activities until the mineral deposit has been exhausted, in accordance with the Economic Exploitation Plan (Plano de Aproveitamento Econômico) approved by ANM and (iii) refrain from suspending mining activities without prior notice to ANM.
Tax laws relating to mining
During the exploration period, the mining titleholder has to pay an Annual Rate per Hectare (Taxa Annual por Hectare or TAH), subject to a maximum value set by law. In the exploitation period, regardless of the legal regime governing the project (whether claimstake or granted mines), the mining titleholder has to pay the Financial Compensation for Exploiting Mineral Resources (Compensação Financeira pela Exploração Mineral or CFEM). The CFEM which is 1.5 percent for gold is currently calculated based on revenues.
At the end of 2011 and the beginning of 2012, the states of Minas Gerais, Pará, Amapá and Mato Grosso do Sul each created a new tax (duty) on research, extraction and exploration activities as well as on the use of Mineral Resource carried out in those states. This tax could range from BRL3.00 to BRL6.50 per ton of ore extracted. In the state of Minas Gerais, gold ore is exempted from the collection of this new duty. At the end of 2020, the state of Goiás created a new tax (duty) on research, extraction and exploration activities carried out in this state at a rate of BRL10.38 per ton of ore sold, which currently still needs to be implemented.
Environmental laws relating to mining
Following the catastrophic failure of a tailings storage facility (TSF) operated by Vale in the state of Minas Gerais in January 2019, executive, legislative and judiciary bodies, both at the federal and state levels, have generally increased scrutiny of mining operations in Brazil, and of TSFs in particular, and have been considering, and in some cases have adopted, stricter laws and regulations applicable to the approval, licensing, construction, management, closure and decommissioning of TSFs in Brazil.
At the federal level, the ANM issued Resolution No. 13/19 in August 2019 (replacing its earlier Resolution No. 4/19) which adopted additional regulatory measures to ensure the stability of TSFs, in particular those built or heightened by the upstream method or by any method declared as “unknown”. Among other things, ANM Resolution No. 13/19 prohibits the upstream method for the construction or heightening of tailings dams throughout the national territory of Brazil. It further requires operators to cease all storage and disposal activities at TSFs (known as “deactivation” or “desativação”) constructed or heightened upstream or by an “unknown” method by 15 September 2021 as well as to decommission such TSFs by 15 August 2022 to 15 September 2027 (depending on the capacity volume). ANM Resolution No. 13/19 does not require complete removal of tailings material from TSFs (a process known as “decharacterization” or “descaracterização”). As a result, the Serra Grande mine in the state of Goiás is in the process of reinforcing the dam walls of its upstream TSF in advance of its expected deactivation by 15 September 2021. To comply with the terms of ANM Resolution No. 13/19, the mine will also need to decommission the Serra Grande tailings dam by 15 September 2025. The company has begun the process of transitioning to dry-stacking operations for tailings storage.
Furthermore, Federal Law No. 14.066/20, adopted in September 2020, also imposes requirements on companies to close and decommission upstream TSFs, including our Serra Grande tailings dam, by 25 February 2022 (which date is earlier than required by ANM Resolution No. 13/19). However, Federal Law No. 14.066/20 does permit extensions of the compliance deadline, with the consent of the ANM based on the technical plan for decommissioning. Neither ANM Resolution 13/19 nor Federal Law No. 14.066/20 requires removal of all tailings material in connection with the decommissioning of TSFs. AngloGold Ashanti expects to transition to dry-stacking operations at Serra Grande in advance of the required closure deadline for the Serra Grande tailings dam. With respect to downstream (or “centerline”) TSFs, Federal Law No. 14.066/20 requires companies, to the extent that communities are located in the self-rescue zone of those TSFs, to implement one of the following measures for such structures: either (i) the structure must be deactivated and decommissioned, (ii) the population must be relocated, with reparations for loss of cultural heritage, or (iii) reinforcement works that guarantee the effective stability of the structure must be carried out, by decision of the public authorities, taking into account the previous nature of the dam in relation to the occupation and technical-financial viability of the alternatives. Even if reinforcement works are completed, deactivation and decommissioning of those TSFs will be required at the end of the life of the mine. All of the TSFs operated by AngloGold Ashanti in Brazil have communities located in self-rescue zones. AngloGold Ashanti expects to transition to dry-stacking operations for tailings storage at each location in Brazil in the near term and to decommission each of these dams in accordance with their closure plans. According to current estimates, capital expenditures in 2021 required to implement this new technology will be in excess of $70 million.
At the state level, the state legislator in the state of Minas Gerais adopted Law No. 23.291/19 in February 2019 which contained the state’s policy on TSF safety and should be implemented in conjunction with the equivalent federal policy. Among other things, Law No. 23.291/19 determines the criteria for licensing and inspecting TSF structures, prohibits TSFs constructed or heightened
69
using the upstream method, establishes bond requirements and holds management liable for non-compliance with its provisions. The administrative requirements to implement certain provisions of Law No. 23.291/19 have not yet been issued.
AngloGold Ashanti’s rights and permits
At AGA Mineraçao, Cuiabá has a single concession covering a total area of 3,662 hectares, Lamego is covered by three geographically contiguous concessions totally 1,622 hectares and Córrego do Sítio is hosted by five geographically contiguous concessions covering a total area of 6,017 hectares. All of these are in good standing. At Serra Grande, the company has interests in or agreements over 61,500 hectares in Crixas Greentone belt, representing approximately 87 percent of the relevant tenements that correspond to all current exploration and mining activities. These have been held since 1987. Brazilian mining concessions remain valid up to the depletion of the Ore Reserve and Mineral Resource pursuant to the Economic Exploitation Plan approved by the ANM and in accordance with the required environmental permits, and as a result do not have an explicit expiry date.
Colombia
General laws relating to mining and land ownership
General regime
The Vaal River operations - KopanangColombian Constitution declares that the sub-soil and Moab Khotsong;the non-renewable natural resources located within the Colombian territory are the property of the Colombian State. The underlying principle of Colombian mining legislation for the granting of mining concession contracts is first in time, first in law. Mining activities are regulated by the Colombian Mining Code, Act 685, 2001.
The West Wits operations - Mponengfiling of an exploration and TauTona;exploitation proposal triggers a right of preference to obtain rights over the targeted area, provided it is available. Such area cannot exceed 10,000 hectares. Upon receipt of a proposal, the relevant government agency determines whether another proposal or contract already governs the area. If there are no pre-existing claims, the government agency grants the applicant a “free area”.
With respect to land ownership, a mining concession in Colombia does not grant the rights over the surface required to develop a mining project. Therefore, in order to develop a mining project, it is required to acquire and secure access to the land (soil). This can be achieved in several ways, such as (i) purchase of the land, (ii) a transit easement, (iii) a mining easement, and (iv) the special acquisition process or expropriation.
Concession contract
As the sub-soil and the non-renewable natural resources located within the Colombian territory are property of the Colombian State, the Colombian Mining Authority grants the authorization to ensureexplore and exploit minerals through a concession contract.
Such concessions allow concessionaires to conduct the studies, works and facilities necessary to establish the existence of minerals and to organise their exploitation. Upon being awarded a mining concession, a company must take out an insurance policy to cover the costs associated with potential environmental damage as well as breaches of its long term sustainability. Moabmining obligations. It may then proceed with exploration activities. Once the exploration phase is complete, the concessionaire files a new plan regarding proposed works and Kopanang operations have been sold subsequent to year end and TauTona was placed on orderly closure duringfacilities. With the year. Followingaward of the mining concession or tenement contract, there are specified timelines for the completion of the salevarious phases of a mining project, e.g. exploration, construction, exploitation. The company must comply with these timelines unless performance is suspended, for example, due to force majeure or extensions or modifications to the timelines. A grant of force majeure is for one year and must be renewed on an annual basis. If the company does not comply with the specified timelines for the completion of the various assetsphases of a mining project, the mining authority may revoke the company's concession contracts or mining licenses. As a general matter, any company that wishes to obtain a renewal of its concession contract must be up to date in all its legal and contractual obligations and must present a new plan of works and facilities to be implemented after the contract is renewed.
PINES program
In 2013, the national government instituted the PINES program designed to aid promoting certain projects that are deemed to have a national interest. This designation provides for greater oversight from the national government. All of our three advanced exploration projects (La Colosa, Quebradona and Gramalote) were considered of national strategic interest. Currently, Quebradona and Gramalote remain in the restructurePINES program, but La Colosa was temporarily removed as such (until the force majeure is over).
70
Tax laws relating to mining
From the moment the concession contract is registered with the Mining Register, the concessionaire has several financial obligations, including the payment of (i) a surface fee during the exploration, construction and assembly stage and (ii) royalties.
Once exploration is complete and the mining infrastructure in place, the concessionaire must begin paying royalties to the Colombian government, consisting of a percentage of the group’s South Africa region, asprimary product and sub-products being exploited. The percentage of the royalty depends on the regulation in force when the concession contract is registered. In the case of the Quebradona project, the deposit mainly consists of copper followed by gold and silver. There is a 5 percent royalty for copper on the production value at the mine’s or well’s edge (i.e. when extracted from the subsoil). In case of gold and silver, a royalty of 4 percent on the production valued at the mine’s or well’s edge (i.e. when extracted from the subsoil) was established.
Furthermore, Colombian law establishes that once the environmental license is granted the concessionaire must invest 1 March 2018,percent of the project’s value to benefit the basins covered by the environmental license.
Environmental laws relating to mining
In order to obtain an authorization from the National Environmental Licensing Authority of Colombia to carry out a project, the company must prepare an Environmental Impact Study (E.I.A.) for approval by this authority.
Global environmental licenses are granted for the entire life of the project and cover all phases: construction, assembly, operation, maintenance, dismantling, final restoration, abandonment and/or termination.
AngloGold Ashanti’s core mining concession contracts provide that the mining authority has the discretion to declare the underlying concession void if the specific company which holds the concession breaches applicable environmental laws or regulations. If the mining authority were to exercise such discretion against it, such company would be required to abandon its projects and all of its other existing mining concession contracts. Pending proposals for new mining concession contracts would also be cancelled and the company would be banned from doing business with the Colombian government for a period of five years. As a result, the company would be unable to conduct any mining exploration or development activities during such period. However, this would not affect other AngloGold Ashanti ceasedsubsidiaries operating in Colombia, which hold singularly or in concert with joint venture partners the majority of the company’s concession contracts in Colombia.
There are some areas where mining activity is prohibited. These areas are national parks, regional parks, protected forest reserves, paramos (included in Act 1753, introduced in 2015) and wetlands, pursuant to the Ramsar Convention on Wetlands of International Importance.Some forest reserves are not “protected” but are set aside for active forestry purposes. Such forest reserves must be “extracted” after initial prospection, meaning that the concessionaire must obtain a specific permit to partially and temporarily change the use of the soil before pursuing exploration activities. In addition, Resolution 187/2016, passed by the national government in late 2016, identifies areas that the Ministry of the Environment has determined to be “paramos” areas, or paramos transition areas. In these areas there are limitations on industrial or commercial work being performed, including mining. The regulation also specifies a process to determine what work, if any, can be performed in a paramos-designated area.
AngloGold Ashanti’s rights and permits
The La Colosa project managed by AngloGold Ashanti Colombia S.A. (AGA Colombia) remains in force majeure due to the delays in the granting of the environmental permits by the local environmental authority, thereby preventing AGA Colombia from undertaking further exploration activities. The current one-year grant of force majeure, during which time the specified timelines for completing the various phases of the mining project under the concession contract are suspended, will expire on 22 June 2021. AGA Colombia applied for a mining area integration (consolidation) of its concession contracts related to La Colosa, in respect of which AGA Colombia was not in compliance with some of the specified timelines. The application for mining area integration (consolidation) was approved in March 2017, which remedied the non-compliance of each consolidated concession and reset the specified timelines. La Colosa now has a single integrated mining concession contract (EIG-163) which covers a total area of 9,210 hectares and expires on 28 February 2037.
Minera de Cobre Quebradona S.A.S. B.I.C. (MCQ) which manages the Quebradona project, obtained the integration of concession agreement 5881 in October 2016 and registered in December 2016. As a result, MCQ was granted the exclusive right to explore, take ownership and dispose of the mineral reserves (ore) extracted from the concession area. MCQ has the right to request an extension of up to 30 years, at least two years before the expiration of the operating period. This extension is not automatic, and the request must be filed with new technical, economic, environmental and social studies that demonstrate the status of the mineral resources. Currently, concession contract 5881 is in its fifth year of the integrated exploration phase. The permits for the construction and mining operation are currently being assessed by the relevant mining authority (Secretaría de Minas de Antioquia) and the National Environmental Licensing Authority of Colombia (ANLA) is reviewing the environmental study.
The Gramalote project is organised as a joint venture between AngloGold Ashanti (through AGA Colombia Holdings Limited and AngloGold Ashanti Holdings plc) and B2Gold (through B2Gold Corp. and Graminvest Ventures Limited). Gramalote Limited, a
71
company incorporated under the laws of British Virgin Islands which is the legal vehicle operating the joint venture, established a Colombian branch, Gramalote Colombia Limited (GCL), to carry out activities in Colombia and obtain the mining concession contracts necessary to develop the Gramalote project. The Gramalote joint venture has been operated by B2Gold since January 2020. Pursuant to an integrated mining concession contract No. 14292, GCL was granted the exclusive right to explore, take ownership and dispose of the mineral reserves (ore) extracted from the concession area until April 2043. GCL has the right to request an extension of the operating period for up to 20 years, and, if exercised, such request to extend must include new technical, economic, environmental and social studies that demonstrate the status of the mineral resources. Currently, concession contract No. 14292 is in the phase of construction and assembly, pending resettlement of communities and the formal start of construction activities. GCL has received an environmental licence granted by the National Environmental Licensing Authority of Colombia (ANLA) and permits for the construction and mining operation which were approved by the relevant mining authority (Secretaría de Minas de Antioquia).
United States of America
Nevada
Mineral and surface rights in the United States are owned by private parties, state governments or the federal government. The majority of land utilised for precious metals exploration, development and mining in the western United States is owned by the federal government, and often the state government will have undergroundan ownership interest in minerals, regardless of whether the state is the surface owner. The right to mine on such federal land in western states is governed by the U.S. General Mining Law of 1872, as amended (General Mining Law). The General Mining Law allows mining claims on certain federal lands upon the discovery of a valuable mineral deposit and proper compliance with claim location and maintenance requirements.
In Nevada, AngloGold Ashanti (U.S.A.) Exploration Inc. is advancing the Silicon Project, located on federal lands covering an area of approximately 5,700 acres. Additionally, a further 1,414 mining claims (29,215 acres) are also being explored. On these lands, AngloGold Ashanti (U.S.A.) Exploration Inc. is currently engaged in early-stage exploration activities that include, but are not limited to, geological and spectral mapping, surface geochemical sampling, geophysical surveying and RC and/or diamond drilling.
Mineral exploration activities in Nevada are also generally subject to applicable federal, state, and local permitting requirements, but the specific regulatory authorizations required for the company’s activities are based on the nature and location of the exploratory work. Many of AngloGold Ashanti (U.S.A.) Exploration Inc.’s Nevada operations are currently conducted under what is generally referred to under federal law as a notice-level operation subject to 43 CFR § 3809.21. The federal Bureau of Land Management (BLM) issued a Notice of Decision for the Silicon Project approving the proposed exploration operations on 1 November 2017. Four amendments to the Notice of Decision have been authorized by the BLM in letters dated 31 January 2018, 2 April 2018, 4 October 2018, and 4 March 2020.
AngloGold Ashanti (U.S.A.) Exploration Inc. has completed a subsequent permitting process for the Silicon Project to increase the exploration activities beyond the 5-acre notice level under federal and state law. This process was initiated in 2019 with the completion and submission of the required environmental baseline studies and the submission of a Plan of Operations and Reclamation Plan to the BLM and the state of Nevada Bureau of Mining Regulation and Reclamation (BMRR). In April 2020, the BLM published for public comment an environmental assessment for the Silicon Project as part of the subsequent permitting process. The comment period for the environmental assessment closed on 5 June 2020. On 24 July 2020, the BLM issued a Finding of No Significant Impact (FONSI) and Record of Decision approving the Plan of Operations and Reclamation Plan, subject to certain bonding requirements. On 31 July 2020, the BMRR also approved the Plan of Operations and Reclamation Plan and issued Reclamation Permit 0404. AngloGold Ashanti North America Inc., the owner of the Silicon Project, has subsequently increased its reclamation bond to $615,302. On 17 August 2020, Basin and Range Watch, Western Watersheds Project and Great Basin Resource Watch, three local opponents to the Silicon Project, filed a Notice of Appeal regarding the BLM’s FONSI and Record of Decision. The company is not required to suspend project work while the appeal is being considered. The aforementioned Notice of Decision for the Silicon Project and its four amendments are now part of the Silicon Project Plan of Operations.
The BLM issued a Notice of Decision for the Rhyolite North Project approving the proposed exploration operations on 14 January 2020. The Rhyolite North Project, situated within the Nye County of south-western Nevada, is wholly owned by AngloGold Ashanti North America Inc. It is an early-stage exploration project managed by AngloGold Ashanti (U.S.A.) Exploration Inc. and is currently comprised of 237 unpatented mining claims.
The BLM issued a Notice of Decision for the Transvaal Project approving the proposed exploration operations on 19 October 2020. The Transvaal Project, situated within the Nye County of south-western Nevada, is wholly owned by AngloGold Ashanti North America Inc. It is an early-stage exploration project managed by AngloGold Ashanti (U.S.A.) Exploration Inc. and is currently comprised of 505 unpatented mining claims.
Although BMRR also regulates mining within the state of Nevada, exploration projects of 5 acres or less, the scope of a notice-level operation under federal law, are exempt from BMRR regulation. AngloGold Ashanti’s current Rhyolite North and Transvaal exploration programs fall within this exemption.
72
In addition, AngloGold Ashanti (U.S.A.) Exploration Inc. intends to conduct exploration activities on four new projects in western Nevada. Those projects include Midnight Star (553 claims; 11,425.62 acres), Admiral (686 claims; 14,173.55 acres), Atlantis (613 claims; 12,665.29 acres) and Caspa (269 claims; 5,557.85 acres), totalling 2,121 new claims for 43,822.31 acres. These projects will be subject to the same regulatory requirements as our current projects in Nevada.
Minnesota
In Minnesota, AngloGold Ashanti Minnesota Inc. completed early-stage reconnaissance exploration activities to determine the potential for gold mineralization in the northern counties of Minnesota. Based on the achieved results, the company has decided to terminate its exploration activities in the state and has closed out activities in accordance with state and company requirements.
Potential regulatory changes
Over the years, the U.S. Congress has considered a number of proposed amendments to the General Mining Law and other federal statutes relating to mining. Among the significant features contained in previously proposed legislation were a production royalty obligation, new and more stringent environmental standards and conditions, additional reclamation requirements, extensive new procedural steps which would likely result in extended permitting timelines and granting counties the ability to petition the U.S. Secretary of the Interior to make certain areas unavailable for the location of unpatented mining claims. The U.S. Environmental Protection Agency has also proposed potential revisions to financial assurance requirements relating to mineral development activities. In June 2020, former President Trump signed an executive order directing certain federal agencies to streamline the review processes associated with permitting of infrastructure and natural resources projects. While this executive order may favorably affect the timing of our permit and project approvals, its impact is yet to be determined and remains uncertain.
AGA is currently unaware of any new federal or state legislative or regulatory changes or rule-making that has been proposed or enacted that would adversely affect its current exploration programs. If any requirements, standards or conditions were adopted in the future that imposed additional or new obligations or costs on AGA in connection with our exploration or extraction activities in the United States, the company’s operations in Nevada could be adversely affected.
MINE SITE REHABILITATION AND CLOSURE
Closure, an integral part of operations
All mining operations eventually cease. An integral aspect of operating AngloGold Ashanti’s mines is ongoing planning for and, where feasible, implementation of concurrent rehabilitation, together with an estimate of associated liability costs and the Vaal River area.placement of adequate financial provisions and assurances to cover these costs.
AngloGold Ashanti revised its group closure planning management standard in 2013 and all of its operations are required to comply with the standard, as well as applicable law and regulations, as their closure plans are reviewed and updated.
Gold production (000oz) | Average number of employees | ||||
| Operations | |||||
| South Africa | |||||
1. Vaal River | |||||
| Kopanang | 91 | 3,879 | |||
| Moab Khotsong | 294 | 6,143 | |||
2. West Wits | |||||
| Mponeng | 224 | 5,962 | |||
| TauTona | 91 | 3,822 | |||
3. Surface operations (1) | 192 | 3,161 | |||
•New projects include a closure plan which takes into account future closure and associated rehabilitation and other costs.
| Unit | 2017 | 2016 | 2015 | |||||||
| Operation | ||||||||||
| Tonnes treated/milled | Mt | 38.9 | 39.6 | 36.8 | ||||||
Pay limit (1) | oz/t | 0.43 | 0.37 | 0.39 | ||||||
| g/t | 15.97 | 13.81 | 14.38 | |||||||
Recovered grade (1) | oz/t | 0.202 | 0.219 | 0.225 | ||||||
| g/t | 6.93 | 7.51 | 7.70 | |||||||
Gold production (2) | 000oz | 903 | 967 | 1,004 | ||||||
| Cost of sales | $m | 1,114 | 1,041 | 1,083 | ||||||
Total cash costs (3) | $/oz | 1,085 | 896 | 881 | ||||||
All-in sustaining costs (3)(4) | $/oz | 1,245 | 1,081 | 1,088 | ||||||
| Capital expenditure | $m | 150 | 182 | 206 | ||||||
| Safety | ||||||||||
| Number of fatalities | 7 | 6 | 9 | |||||||
| AIFR | Per million hours worked | 12.68 | 12.02 | 10.81 | ||||||
| People | ||||||||||
| Average no of employees: Total | 26,245 | 28,507 | 28,325 | |||||||
| Permanent employees | 22,738 | 25,205 | 25,274 | |||||||
| Contractors | 3,507 | 3,302 | 3,051 | |||||||
For many of the older mines, closure planning and the evaluation of environmental liabilities is a complex process. This is particularly so in Brazil and Ghana, where many of the mining and other operations have taken place for more than fifty years. A particular challenge is concurrent rehabilitation, which is carried out while a mine is still operational. This practice serves to decrease the ultimate liability and reduces the final rehabilitation and closure work that must be undertaken, but has the potential to sterilise Ore Reserve, which the company might wish to exploit should conditions, such as the gold price, change.
The company’s group closure standard stipulates that closure planning must be undertaken in consultation with the community. In the course of these consultations, different issues are raised which require site-specific solutions. Livelihood preservation and infrastructure are often key requirements. Communities also require information on the company’s rehabilitation of the landscape and on any lasting environmental impacts. Long-term remediation obligations, including decommissioning and restoration liabilities relating to past operations, are based on environmental management plans and compliance with current environmental and regulatory requirements.
Provisions for decommissioning and rehabilitation costs are made when there is a present obligation, it is probable that expenditure on decommissioning and rehabilitation work will be required and the cost can be estimated within a reasonable range of possible outcomes. These costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws and regulations presently or virtually certain to be enacted and previous experience in the rehabilitation of mine sites.
73
Decommissioning costs and restoration costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Provisions for decommissioning and for restoration (excluding joint ventures and discontinued operations) increased from $634 million in 2019 to $674 million in 2020. This increase mainly relates to changes in discount rates based on global economic assumptions. The provisions were also impacted by changes in mine plans, resulting in a change in cash flows.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
In June 2017,addition to post-mining land rehabilitation and closure requirements, AngloGold Ashanti is subject to extensive environmental, health and safety (EHS) laws and regulations in the various jurisdictions in which the company tookoperates. These requirements govern, among other things, extraction, use, conservation and discharge of water; air emissions (including dust control and GHGs); regulatory and community reporting; clean-up of contamination; land use and conservation of protected areas; worker health and safety and community health; and the generation, transportation, storage and disposal of solid and hazardous wastes, such as reagents, radioactive materials, and mine tailings. Environmental laws and regulations applicable to our operations, including the requirements contained in environmental permits, are generally becoming more restrictive. Significant EHS requirements, risks and trends affecting our mining and processing operations are described below.
Regulatory Compliance
Capital and operating costs to comply with EHS laws and regulations have been, and are expected to continue to be, significant to AngloGold Ashanti. In addition, AngloGold Ashanti could incur fines, penalties and other sanctions, environmental clean-up costs, and third-party claims for personal injury or property or natural resources damages; suffer reputational damage; and be required to install costly pollution control equipment or to modify or suspend operations, as a decisionresult of actual or alleged violations of, or liabilities under, EHS laws and regulations. Failure to restructure the South African assets, to focus on returning the South African business to profitability, while mitigating job losses. It was decidedcomply with applicable EHS laws and regulations may also result in the latter halfsuspension or revocation of permits and, in some jurisdictions, our right to mine a given concession. AngloGold Ashanti’s ability to obtain and maintain permits and other approvals and to successfully operate near particular host communities may be adversely impacted by real or perceived effects on the environment or human health and safety associated with AngloGold Ashanti’s or other mining companies’ activities. In addition, unknown environmental hazards may exist at the company’s properties which may have been caused by previous owners or operators.
Water Management
AngloGold Ashanti’s mining and processing operations are heavily dependent upon access to substantial volumes of water required for such operations. Typically, water-use permits or water rights in each country impose limits on the quantity of water that can be extracted from certain sources and require, among other things, that wastewater from mining operations meet certain water quality criteria if discharged to the environment. Water supply, quality and usage are areas of interest globally, but are particularly significant for operations in Brazil and Ghana, and for exploration projects in Colombia, where there is significant potential environmental and social impact and a high level of stakeholder scrutiny. Any failure to secure access to suitable water supplies, or achieve and maintain compliance with the requirements of our permits or licenses, could result in curtailment or suspension of production at the affected operation. Incidents of water pollution or shortage can, in extreme cases, lead to community protest and ultimately result in the withdrawal of community and government support for the company’s operations.
Where feasible, the company operates a “closed loop” system which recycles the water used in its operations without discharging it to the environment. In some areas, however, such as Ghana and Brazil, high levels of rainfall and surface water runoff mean that a closed loop system is not feasible and that discharges, after water treatment where necessary, must take place.
Waste Management
Mining and mineral processing operations generate waste rock and tailings.
During open-pit mining, large volumes of soil and/or rock (overburden) are mined to expose the ore body. Similarly, waste rock is mined during drilling and developing access to underground ore bodies. Overburden and waste rock typically contain sub-economic levels of gold and are deposited as large waste rock facilities. Mine tailings are the process waste generated once grinding and extraction of gold from the ore is completed in the milling process and are deposited as slurry in large storage facilities specifically designed for this purpose.
The impact of dust generation, breach, leak, or other failure of a waste rock or TSF, including any associated dam, can be significant, and the company therefore monitors such facilities closely in accordance with the company’s internal standards, independent review, national regulatory requirements, industry standards and commitments made to local communities. The occasional well-publicised failure of a third-party TSF and the potential impact of such failure also mean that these facilities are generally tightly regulated. An incident at the company’s operations could result, among other things, in enforcement, obligations to remediate environmental contamination, negative press coverage, and claims for property or natural resources damages and
74
personal injury by adjacent communities. Incidents at other mining companies’ operations could result in governmental action to tighten regulatory requirements and restrict certain mining activities, in particular with respect to TSFs, also in respect of other mine operators in that region.
For example, following the catastrophic failure of a TSF at an iron ore mine owned by Vale in the state of Minas Gerais in Brazil in January 2019, tailings were discharged into the mine’s administrative area and part of the year,local community, reportedly resulting in deaths and injuries to place TauTona into orderly closure.hundreds of people. As a result of this incident, there has been considerably increased regulatory scrutiny in Brazil and other areas on mining operations generally, and the requirements applicable to the approval, licensing, construction, management, closure and decommissioning of TSFs have generally become far more stringent. In particular, in Brazil, new TSFs in the upstream design method have been prohibited both by the Brazilian National Mining Agency (ANM) Resolution No. 13/19, issued in August 2019, and by Federal Law No. 14.066/20, adopted in September 2020, and decommissioning of all existing upstream TSFs has been ordered. As a result, we will be required to reinforce, and to cease storage and disposal activities at, the TSF (known as “deactivation” or “desativação”) at our Serra Grande mine, located in the state of Goiás, by 15 September 2021. In addition, the decision was madeSerra Grande mine TSF must be decommissioned by 15 February 2022, though that deadline could potentially be extended, up to sell Kopanang,15 September 2025, with the nearby West Gold Plantconsent of the ANM based on the technical plan for decommissioning. The incremental costs for reinforcing the walls of this facility and, ultimately, for deactivating and decommissioning the TSF in compliance with new legislation and regulations are expected to be material. We will also be required to reinforce or decommission all TSFs in Brazil constructed based on the downstream or “centerline” design method. AngloGold Ashanti expects to transition to dry-stacking operations for tailings storage at each location in Brazil in the near term and to decommission each of these dams in accordance with their closure plans. According to current estimates, capital expenditures in 2021 required to implement this new technology will be in excess of $70 million. Neither ANM Resolution No. 13/19 nor Federal Law No. 14.066/20 requires complete removal of tailings material (a process known as “decharacterization” or “descaracterização”) from TSFs. Further amendments to the regulatory requirements in Brazil governing such TSFs and related infrastructuredams may be adopted in 2021. See “Item 4B: Business Overview—The Regulatory Environment Enabling AngloGold Ashanti to Mine”.
In addition, AngloGold Ashanti has committed to implement a new Global Industry Standard on Tailings Management, established in August 2020 by a panel comprised of industry and NGO experts, at its 22 TSFs in Africa, Australia and Brazil within the next five years, the costs of which are not expected to be material to AngloGold Ashanti.
Groundwater Impacts and Environmental Remediation
AngloGold Ashanti has identified groundwater contamination plumes at certain of its operations. Numerous scientific, technical and legal studies have been undertaken to assist in determining the magnitude of the impact and to find sustainable remediation solutions. Based on those studies as well as discussion with regulators, the company has taken steps, including monitored natural attenuation and phyto-technologies, to disposeaddress soil and groundwater contamination. For example, in Tanzania, a concept study for in-situ bioremediation project which uses naturally-occurring bacteria to reduce sulphate and nitrates in groundwater was undertaken in 2020 downstream of Moab Khotsong mineGeita mine’s TSF. Early results are encouraging, and related infrastructure. These transactionsthe plans to roll out a phased project to address groundwater downstream of the TSF are in process.
Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made at this time for the obligation. Should these obligations be significant, this could have a material adverse impact upon AngloGold Ashanti’s results and its financial condition.
As AngloGold Ashanti or its predecessors have a long history of mining operations in certain regions, issues may arise regarding historical environmental impacts on those areas, for which AGA, as the current owner/operator, may be legally responsible.
Climate Change and GHG Regulation
GHGs are emitted directly by AngloGold Ashanti’s operations, as well as by external utilities from which AngloGold Ashanti purchases electricity.
As a result of commitments made at the UN Climate Change Conference in Durban, South Africa in December 2011, certain members of the international community negotiated a treaty at the Conference of the Parties of the UN Framework Convention on Climate Change in Paris in December 2015 (Paris Agreement). The Paris Agreement, which came into force on 4 November 2016, requires developed countries to set targets for emissions reductions. Additional measures designed to limit or reduce GHG emissions, both mandatory and voluntary, may be implemented at national or international levels in various countries.
Such measures could require AngloGold Ashanti to reduce its direct GHG emissions or energy use or to incur significant costs for GHG emissions permits or taxes, including for those costs or taxes passed on by electricity utilities which supply the company’s operations. AngloGold Ashanti could also incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to comply with applicable requirements. The most likely source of these obligations is through state-level implementation of new emissions or financial obligations pursuant to evolving climate change regulatory regimes.
For example, in 2010, Brazil launched the National Climate Change Policy, which established a voluntary national GHG reduction target of 36.1 percent to 38.9 percent below the projected emissions in 2020 for “business as usual”. The policy required the development of sector-specific plans in order to meet the target. Amongst other plans, it was intended to reduce
75
deforestation in the Cerrado biome, where AngloGold Ashanti operates, by 40 percent compared to the average deforestation in 1999-2008 and expand renewable energy production and energy efficiency programmes. The policy also provided for a Brazilian GHG trading scheme, which is yet to be designed. While Brazil is not yet requiring mandatory GHG emissions reporting at the national level, some state environmental agencies have requested companies to voluntarily submit GHG emissions management plans, however Goiás and Minas Gerais State (in which AngloGold Ashanti operates) do not currently require GHG emissions management plans for mining projects. In 2015, Brazil announced, in connection with its commitments under the Paris Agreement, economy-wide absolute mitigation targets providing for a 37 percent reduction in GHG emissions by 2025, as compared to 2005, and a goal to reduction emissions by 43 percent by 2030 compared to 2005 levels.
In Australia, the Commonwealth Government introduced the Safeguard Mechanism (Rule 2015) through the existing National Greenhouse and Energy Reporting (NGER) scheme, to provide a framework for Australia’s largest emitters to measure, report and manage their emissions. It does this by encouraging large facilities, whose net emissions exceed the safeguard threshold, to keep their emissions at or below emissions baselines set by the Clean Energy Regulator. The safeguard mechanism applies to facilities with Scope 1 covered emissions of more than 100,000 tonnes of CO2-e per fiscal year. The Australian mining operations (Sunrise Dam and Tropicana) had emissions baselines set in 2016 for a 3-year period (expired in 2019) which were reported annually through the NGER scheme. During the 2018/19 fiscal year, Tropicana’s emissions were within its authorised threshold and Sunrise Dam was required to purchase offsets for emissions that were 0.8 percent above its safeguard threshold, the cost of which was immaterial. Two recent amendments to the Safeguard Mechanism (Rule 2015) enacted in March 2019 and May 2020 allowed for the application of transitional calculated baselines using estimated CO2-e emissions intensities. Based on the production and emissions forecasts, the Australian mining operations applied to use transitional calculated baselines in 2020 for Sunrise Dam and Tropicana, which were approved by the Clean Energy Regulator effective 1 July 2019 to 30 June 2022 for both operations. Accordingly, assuming our operations (and resultant emissions) are consistent with the forecasts in our current business plan, the Australian mining operations should be able to avoid purchasing emissions offsets for the business during this period. In any event, the cost of such offsets, if ultimately required to be purchased, including due to a change in our operations under our business plan prior to June 2022, are not anticipated to be material to our business.
In 2020, AngloGold Ashanti formed a new internal Climate Change Working Group (CCWG), whose members are drawn from key functions across our operating regions, to lead the development of an updated climate change response for the company, including medium term GHG emissions reduction targets which are expected to be announced in 2021.
In addition to more stringent requirements and commitments, AngloGold Ashanti’s operations are subject to a number of physical risks from climate change, such as changes in rainfall rates or patterns resulting in floods or droughts, rising sea levels, reduced water availability, higher temperatures and extreme weather events. Such events or conditions, precedent,particularly including flooding or inadequate water supplies, could disrupt mining and transport operations, mineral processing and rehabilitation efforts, create resource or energy shortages or damage the company’s property or equipment and increase health and safety risks on site. Under the CCWG’s leadership and in consultation with external consultants, physical climate risk assessments were undertaken in 2020 for all our operations using current climate models for different projected scenarios and climate adaptation plans were outlined. These adaptation plans will continue to be further refined in 2021.
Occupational and Community Safety and Health and Tropical Diseases
Safety is a significant focus of concern for AngloGold Ashanti. AngloGold Ashanti is subject to a variety of laws and regulations in each of the jurisdictions where the company operates that are designed to protect and improve the safety and health of employees.
In some of the jurisdictions in which AngloGold Ashanti operates, the government enforces compulsory shutdowns of operations to enable investigations into the cause of accidents at those operations.
Our board of directors seeks to ensure that safety remains AngloGold Ashanti’s first priority and the Social, Ethics and Sustainability Committee is rigorous in overseeing the implementation of the group safety strategy. The group safety strategy is aligned with recognised leading practice in global safety standards and systems. AngloGold Ashanti has made significant strides in improving safety in recent years, by developing a systematic and integrated safety strategy executed by the executive and senior operational leadership teams. Sadly, we lost six colleagues during 2020, but a continuous improvement in the recorded all injury frequency rate has been observed over the majority of the operations. Safety remains a top priority for AngloGold Ashanti. We pursue and continually adapt strategies in line with recognised leading practice in global safety standards and systems in working towards our 2030 goal of providing workplaces free of serious injury and harm for our employees and contractors. During the revision of the Group Safety Strategy, a number of areas were considered: looking at eliminating both high consequence low-frequency events and low consequence high-frequency incidents through critical control management; introducing engineering and higher order controls; and improving organizational culture and behaviour. We are aligned with global standards and are rolling out ISO 45001:2018, which has replaced the OHSAS 18001:2007 series. All our operating mines are OHSAS 18001:2007 certified and are in the process of migration to ISO 45001:2018. Geita, Iduapriem, Siguiri, Cerro Vanguardia, Sunrise Dam and Tropicana mines have already achieved ISO 45001:2018 certification, with the remainder to follow during 2021. The certification process has been delayed due to COVID-19 travel restrictions.
In addition, AngloGold Ashanti is subject to health and safety regulations relating to occupational disease. The primary areas of focus in respect of occupational health of employees within the company’s operations are noise-induced hearing loss (NIHL) and
76
occupational lung diseases (OLD). OLD includes occupational tuberculosis and silicosis in individuals exposed to silica dust. Silicosis has been particularly prevalent in South Africa and has also arisen at the company’s Africa and Brazilian operations, albeit to a far lesser extent. AngloGold Ashanti provides occupational health services to its employees at its occupational health centres, clinics, and through outsourced service centres. The company continues to improve preventative occupational hygiene initiatives, such as implementing various control measures to prevent hazardous exposures, and providing employees with Personal Protective Equipment.
The South African government, by way of a cabinet resolution in 1999, proposed a possible combination and alignment of benefits of the Occupational Diseases in Mines and Works Act, No. 78 of 1973 (ODMWA) and the Compensation for Occupational Injuries and Diseases Act, No. 130 of 1993 (COIDA). ODMWA provides for compensation to mineworkers and former mineworkers, who have work-related occupational diseases. COIDA provides for compensation in respect of job-related injuries and certain occupationally-related diseases contracted by mineworkers and former mineworkers. If the proposed combination and alignment were to occur, this could further increase the amount of statutory compensation that miners employed by AngloGold Ashanti could claim, which consequently could have an adverse effect on AngloGold Ashanti’s financial condition. In 2019, the Johannesburg High Court approved the settlement of existing silicosis and tuberculosis class actions against AngloGold Ashanti and other gold mining companies in South Africa. The recent sale of the company’s South African operating assets and liabilities did not include the silicosis or tuberculosis settlement obligations relating to South African employees, which were retained by AngloGold Ashanti. For further information, see “Item 18: Financial Statements—Note 1—Accounting Policies—Provision for silicosis”.
In addition to OLD, HIV and AIDS and associated diseases remain major health care challenges faced by AngloGold Ashanti’s Africa region operations. AngloGold Ashanti continues to implement programmes to help those infected with HIV and prevent new infections from spreading.
Malaria and other tropical diseases also pose health risks at all of which were achievedthe company’s operations in Central, West and East Africa where such diseases may assume epidemic proportions because of ineffective national control programmes. Malaria is a major cause of death in young children and pregnant women but also gives rise to deaths and absenteeism in adult men. All affected company operations have malaria control programmes in place. The Ghana Obuasi malaria control programme continues to roll-out indoor residual spraying programmes in 16 districts of Ghana in partnership with the Global Fund and the sales transactions were concluded effective 28 February 2018. AsGhana Department of 1 March 2018,Health.
In 2020, the COVID-19 pandemic took an unprecedented toll on businesses and socio-economic systems across the globe. This forced businesses to take extraordinary measures to protect the health of people, maintain operations and contribute to global control efforts. Similarly, the pandemic required significant focus and resources across AngloGold Ashanti ceasedas throughout the year we worked to have undergroundlimit the spread and maintain operations. Given the interdependence of employee and community health, measures to ensure the health of our employees and those in our communities remained our focus.
The emergence of COVID-19 however also assisted to better integrate broad health risk management beyond occupational health into the overall business strategy, to contribute to productivity as well as the social license to operate. We put various prevention and risk management protocols in place to address the potential risk of an epidemic or pandemic after our experience with Ebola in Guinea in 2014 and 2015 – our health team made sure that we were better prepared than many to address the situation.
This pandemic also highlighted other associated risks and emphasized the importance of optimising mental health, minimising non-communicable diseases associated with lifestyle as well as the need for systematic contribution to health system strengthening, local skill development and overall community development in the jurisdictions in which we operate. Such risks impair the health of workers and negatively affect productivity and profitability as a result of workers’ diminished focus or skill, absenteeism, treatment costs and allocated resources.
AngloGold Ashanti cannot guarantee that any current or future medical programme will be successful in preventing or reducing the injury and illness rates amongst its employees or in affecting consequent morbidity or mortality rates. AngloGold Ashanti may incur significant costs in addressing this issue in the future, which could also adversely impact the company’s results of operations and financial condition.
77
ANGLOGOLD ASHANTI GLOBAL OPERATIONS: 2020
Operations, projects and exploration programmes
| AMERICAS | AFRICA REGION | AUSTRALIA | |||||||||||||||
| 1 | Argentina | 4 | Guinea | 8 | Australia | ||||||||||||
| Cerro Vanguardia (92.5%) | Siguiri (85%) | Sunrise Dam | |||||||||||||||
| 2 | Brazil | 5 | Ghana | Tropicana (70%) | |||||||||||||
| Serra Grande | Iduapriem | ||||||||||||||||
| AGA Mineração | Obuasi(4) | ||||||||||||||||
| 3 | Colombia | 6 | DRC | ||||||||||||||
Gramalote (50%)(1) | Kibali (45%)(5) | ||||||||||||||||
| La Colosa | 7 | Tanzania | |||||||||||||||
| Quebradona | Geita | ||||||||||||||||
| United States (exploration) | |||||||||||||||||
Percentages indicate the ownership interest of AngloGold Ashanti. All operations are 100%-owned unless otherwise indicated.
(1) The joint arrangement, managed and operated by B2 Gold, is recognised as a joint operation in the financial statements.
(2) Sale completed on 10 November 2020.
(3) Sale completed on 31 December 2020.
(4) Obuasi's redevelopment project began in 2018.
(5) Kibali is managed and operated by the company's joint venture partner Barrick.
(6) Sale completed on 30 September 2020.
78
OPERATING PERFORMANCE
Group description
AngloGold Ashanti, an independent, global gold mining company with a globally diverse, high-quality portfolio of operations and projects, is headquartered in Johannesburg, South Africa. Measured by production, AngloGold Ashanti is the third largest gold mining company in the world.
In 2020, our portfolio of ten operations in eight countries, includes long-life operating assets with differing ore body types located in key gold-producing regions around the world. These operating assets were supported by three greenfields projects in Colombia and a focused global exploration programme, including exploration in the United States.
Our operations and projects are grouped into the following regions: Africa, Americas, Australia and South Africa (producing assets sold during 2020).
On 12 February 2020, the Company announced that it had reached an agreement with Harmony to sell all its remaining South African producing assets and related liabilities. The sale closed on 30 September 2020. On 10 November 2020, the Company announced that it had completed the sale of its interest in the Morila mine in Mali and on 30 December 2020, the Company announced that it had completed the sale of its interest in the Sadiola Mine in Mali.
AngloGold Ashanti’s operations and joint arrangements employed, on average, 36,952 people (including contractors) in 2020 (2019: 34,263).
Performance (including discontinued operations)
In 2020, AngloGold Ashanti produced attributable 3.0 million ounces (Moz) of gold (2019: 3.3Moz) as well as 3.6Moz of silver and 188 tonnes of sulphuric acid as by-products.
Production of 3.0 Moz of gold was achieved at a cost of sales of $3.0 billion and an all-in sustaining cost of $1,072/oz for subsidiaries and $810/oz for equity accounted joint venture operations compared to a production of 3.3Moz in 2019 at a cost of sales of $3.1 billion and all-in sustaining cost of $1,017/oz for subsidiaries and $767/oz for equity accounted joint venture operations.
Gold
The AngloGold Ashanti gold Ore Reserve reduced from 43.8Moz in December 2019 to 29.5Moz in December 2020. This gross annual decrease of 14.3Moz includes depletion of 3.4Moz, and disposal of assets in the South African region and Sadiola of 16.7Moz. This is offset partly by additions due to exploration and modelling changes of 4.5Moz, changes in economic assumptions of 1.0Moz and other factors of 0.3Moz. The Ore Reserve was estimated using the AngloGold Ashanti gold price of US$1,200/oz (2019: US$1,100/oz).
Copper
The AngloGold Ashanti copper Ore Reserve increased from 1.39Mt (3,068Mlb) in December 2019 to 1.41Mt (3,105Mlb) in December 2020. This gross annual increase of 0.02Mt due to optimisation of the production levels. The Ore Reserve was estimated at the AngloGold Ashanti copper price of US$2.65/lb (2019: US$2.65/lb).
Capital expenditure, including equity accounted joint ventures, in 2020 amounted to $792 million (2019: $814 million).
Safety
There were regrettably six fatalities across the group’s operations in 2020. The all injury frequency rate was 2.39 per million hours worked compared to 3.31 in 2019. Regrettably, there was one fatality at the Serra Grande mine in Brazil in a fall of ground incident in early 2021.
79
AFRICA REGION
 |  | ||||
At year end, AngloGold Ashanti had five operations in the Vaal River area.Africa region, four of which we manage and one of which is managed by Barrick. The Obuasi redevelopment project, which was commissioned in 2020, is on track to achieve steady-state production during 2021. The sale of Morila was completed on 10 November 2020 and the sale of Sadiola was completed on 30 December 2020.
| Attributable gold production (000oz) | Average number of employees | ||||||||||
| Subsidiary operations | |||||||||||
| Ghana | |||||||||||
| Iduapriem | 275 | 1,774 | |||||||||
| Obuasi | 30 | 4,210 | |||||||||
| Guinea | |||||||||||
| Attr. Siguiri 85% | 215 | 3,016 | |||||||||
| Tanzania | |||||||||||
| Geita | 623 | 5,496 | |||||||||
| Joint venture operations | |||||||||||
| Democratic Republic of the Congo | |||||||||||
| Attr. Kibali 45% | 364 | 2,333 | |||||||||
80
Africa Region - Key Statistics
| Unit | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Subsidiary operations | |||||||||||||||||||||||
| Tonnes treated/milled | Mt | 20.1 | 19.1 | 19.5 | |||||||||||||||||||
| Pay limit | oz/t | 0.034 | 0.039 | 0.040 | |||||||||||||||||||
| g/t | 1.160 | 1.330 | 1.372 | ||||||||||||||||||||
| Recovered grade | oz/t | 0.052 | 0.060 | 0.049 | |||||||||||||||||||
| g/t | 1.77 | 1.77 | 1.69 | ||||||||||||||||||||
| Gold production (attributable) | 000oz | 1,143 | 1,094 | 1,060 | |||||||||||||||||||
| Cost of sales | $m | 1,232 | 1,173 | 1,127 | |||||||||||||||||||
Total cash costs (1) | $/oz | 797 | 801 | 813 | |||||||||||||||||||
All-in sustaining costs (1) | $/oz | 975 | 947 | 941 | |||||||||||||||||||
| Capital expenditure | $m | 345 | 359 | 246 | |||||||||||||||||||
| Safety | |||||||||||||||||||||||
| Number of fatalities | 2 | 0 | 0 | ||||||||||||||||||||
| AIFR | Per million hours worked | 0.55 | 0.62 | 0.51 | |||||||||||||||||||
| People | |||||||||||||||||||||||
| Average no of employees: Total | 14,496 | 12,847 | 11,490 | ||||||||||||||||||||
| Permanent employees | 5,433 | 4,939 | 4,625 | ||||||||||||||||||||
| Contractors | 9,063 | 7,908 | 6,865 | ||||||||||||||||||||
(1) Includes Obuasi gold production in 2020, capitalised as part of the project development.
| Unit | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Joint venture operations | |||||||||||||||||||||||
| Tonnes treated/milled | Mt | 3.4 | 7.5 | 7.8 | |||||||||||||||||||
| Pay limit | oz/t | 0.048 | 0.037 | 0.041 | |||||||||||||||||||
| g/t | 1.640 | 1.255 | 1.403 | ||||||||||||||||||||
| Recovered grade | oz/t | 0.096 | 0.060 | 0.053 | |||||||||||||||||||
| g/t | 3.29 | 1.85 | 1.81 | ||||||||||||||||||||
| Gold production (attributable) | 000oz | 364 | 445 | 452 | |||||||||||||||||||
| Cost of sales | $m | 340 | 428 | 480 | |||||||||||||||||||
Total cash costs (1) | $/oz | 629 | 657 | 680 | |||||||||||||||||||
All-in sustaining costs (1) | $/oz | 810 | 767 | 820 | |||||||||||||||||||
| Capital expenditure | $m | 52 | 51 | 67 | |||||||||||||||||||
| Safety | |||||||||||||||||||||||
Number of fatalities(2) | n/a | 0 | 0 | ||||||||||||||||||||
AIFR (2) | Per million hours worked | n/a | 0.65 | 0.29 | |||||||||||||||||||
| People | |||||||||||||||||||||||
| Average no of employees: Total | 2,333 | 2,939 | 3,343 | ||||||||||||||||||||
| Permanent employees | 824 | 1,192 | 1,072 | ||||||||||||||||||||
| Contractors | 1,509 | 1,747 | 2,271 | ||||||||||||||||||||
(1)Total cash costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A: Operating Results-Non-GAAP analysis”.
(2)Excludes Kibali which is managed by Barrick and not AngloGold Ashanti. For years prior to 2020, amounts are inclusive of amounts pertaining to Sadiola, which was sold in 2020.
81
Production and costs
Production from the Africa region subsidiaries increased from 1.094Moz in 2019 to 1,143Moz in 2020. The South Africanjoint venture operations produced 903,000oz, a seven percent decrease year-on-year as tonnes mined were affected by a poor start upreported decreased production from 445Moz in 2019 compared to the year at all operations. Underground yield dropped eight percent to 6.93g/t, a result of lower feed grades as well as higher dilution year-on-year. This was mainly due to an increase364Moz in waste tonnes at Moab Khotsong, moving away from higher grade areas at Mponeng, and the reclamation of the tailing storage facilities at the West Wits Surface Sources.
Geita’s production of 623,000oz was the highest annual production level achieved in the last 15 years and 3% higher than the preceding year’s 604,000oz. The increase was attributed to the year following safety-related stoppages lategreater volumes treated as the underground operations continued to ramp-up, providing finer fragmentation and higher grades to the mill. The processing plant benefited from higher run time, resulting in a 14% increase in underground tonnes mined for the year.
Iduapriem had a solid performance with gold production of 275,000oz maintaining the record production level of the previous year. Production at Mponeng decreased year-on-year, mainly as a resultThis performance was primarily due to the 2% improvement in plant feed, supported by higher grades following implementation of the planned mining of lower-grade areas, face-time constraintsgrade improvement project during 2020. Improved grades were partly offset by a 2% decline in tonnes treated due to challenges experienced in treating harder ore material. An additional tertiary ore crushing stage is being constructed to reduce the feed size to the milling circuit to deal with mining occurring further away from shaft stations,the increased rock hardness as well as three separate seismicity-induced fatal accidents indeeper ore is extracted. In the second half of the year. The mine’s performance improved towards the end of the second quarter through2020, a decision was made to the third quarter, due to improved efficiencies. Production highlights included a four percent increase in the mineable face length which allowed for more face-length flexibility. During the year, the average monthly face advance increased from less than 4.9m to more than 5.0m in June, which was maintained for the rest of the year. Mponeng’s yield improved in the last quarter of the year, to an average of 8.54g/t. Unfortunately, safety-related work stoppages following the fatal accidents in late October and early November contributed to a disappointing decline in production in the last quarter.
Attributable gold production (000oz) | Average number of employees | ||||
| Subsidiary operations | |||||
| 2. Ghana | |||||
| Iduapriem | 228 | 1,598 | |||
| Obuasi | 3 | 1,066 | |||
| 3. Guinea | |||||
| Siguiri 85% | 323 | 3,353 | |||
| 5. Tanzania | |||||
| Geita | 539 | 4,251 | |||
| Joint venture operations | |||||
1. Democratic Republic of the Congo | |||||
| Kibali 45% | 268 | 2,428 | |||
| 4. Mali | |||||
| Morila 40% | 28 | 305 | |||
| Sadiola 41% | 63 | 592 | |||
| Unit | 2017 | 2016 | 2015 | |||||||
| Subsidiary operations | ||||||||||
| Tonnes treated/milled | Mt | 20.3 | 20.8 | 20.8 | ||||||
| Pay limit | oz/t | 0.038 | 0.034 | 0.039 | ||||||
| g/t | 1.130 | 1.151 | 1.183 | |||||||
| Recovered grade | oz/t | 0.054 | 0.046 | 0.049 | ||||||
| g/t | 1.84 | 1.59 | 1.68 | |||||||
| Gold production (attributable) | 000oz | 1,094 | 955 | 1,028 | ||||||
| Cost of sales | $m | 1,070 | 925 | 969 | ||||||
Total cash costs (1) | $/oz | 686 | 674 | 687 | ||||||
All-in sustaining costs (1)(2) | $/oz | 909 | 886 | 861 | ||||||
| Capital expenditure | $m | 290 | 191 | 183 | ||||||
| Safety | ||||||||||
| Number of fatalities | 0 | 0 | 1 | |||||||
| AIFR | Per million hours worked | 0.48 | 0.31 | 0.29 | ||||||
| People | ||||||||||
| Average no of employees: Total | 10,268 | 9,599 | 8,907 | |||||||
| Permanent employees | 4,523 | 4,441 | 4,876 | |||||||
| Contractors | 5,745 | 5,158 | 4,031 | |||||||
| Unit | 2017 | 2016 | 2015 | |||||||
| Joint venture operations | ||||||||||
| Tonnes treated/milled | Mt | 7.7 | 6.8 | 6.4 | ||||||
| Pay limit | oz/t | 0.045 | 0.038 | 0.041 | ||||||
| g/t | 1.528 | 1.294 | 1.407 | |||||||
| Recovered grade | oz/t | 0.047 | 0.052 | 0.064 | ||||||
| g/t | 1.10 | 1.79 | 2.19 | |||||||
| Gold production (attributable) | 000oz | 359 | 356 | 407 | ||||||
| Cost of sales | $m | 440 | 406 | 378 | ||||||
Total cash costs (1) | $/oz | 822 | 809 | 656 | ||||||
All-in sustaining costs (1)(2) | $/oz | 1,087 | 955 | 701 | ||||||
| Capital expenditure | $m | 119 | 100 | 132 | ||||||
| Safety | ||||||||||
| Number of fatalities | 0 | 0 | 0 | |||||||
| AIFR | Per million hours worked | 2.08 | 1.95 | 3.64 | ||||||
| People | ||||||||||
| Average no of employees: Total | 3,325 | 3,092 | 3,040 | |||||||
| Permanent employees | 944 | 890 | 895 | |||||||
| Contractors | 2,381 | 2,202 | 2,145 | |||||||
Siguiri increased production marginally in higher grade ore from underground. Improved plant availability and recovery rates also contributed2020 to increased throughput and were boosted by additional ultra-fine grind and Pumpcell capacity. Using the Pumpcell amongst other things helped facilitate the treatment of 100 percent sulphide ore at the215,000oz compared with 213,000oz in 2019. Improvements in hardrock processing plant where it was processed solely for extended periods, achieving design recovery and above-design throughput. Thiscapability resulted in higher volumesplant feed grade. Conversion of ore being treatedthree leach tanks to carbon-in-leach and a two percent increase in production. In the underground mine, operational challenges compounded by underutilisationMill 1 discharge pump upgrade were successfully completed and commissioned on schedule. These will together help to improve overall plant recovery rates. Plant interventions and the effective use of the ore pass system, continuedplant run time increased throughput to 11.2Mt during the year and resulted in the treatment of lower grade ore at the expense of the high-grade underground ore.
Kibali had steady performance with production of 364,000oz (45% attributable), marginally lower than the 366,000oz produced in 2019. Record underground production was achieved in December 2020 and for the fourth quarter. Steady plant performance resulted in a 2% increase in plant throughput compared to 2019. This was partly offset by 2% decline in the recovered grade due to the impact of ore feed blend to the plant. The mine invested further in technology to will allow multiple, autonomous machines to operate on the same haulage and production levels, and to provide real-time visibility of all operations, including automated control of ventilation fans.
Cost of sales and all-in sustaining costs (AISC) for the subsidiary operations in the region increased to $1,232 million and $975/oz from $1,173 million and $947/oz in 2019, respectively, This increase was a result of higher underground mining costs at Geita due to the step-up in ore and waste volumes, offset by lower open pit mining cost following the completion of mining in Nyakanga Cut 8 by the end of September 2020; higher stay-in-business capital spend as a result of waste stripping at Teberebie Cut 2 at Iduapriem and additional Ore Reserve development at Geita and Obuasi; as well as higher royalty costs across the operations due to the increase in the average gold price received. Cost of sales for the joint venture operations decreased due exclusion of costs compared to 2019 due to the sale of Sadiola and Morila operations. AISC increased at Kibali during 2020.
The Operational Excellence programme continued during 2020. This programme is a group-wide efficiency-driven initiative focused on optimising mine plans and systems and on improving operational cost management. This translated into a review of asset potential and the further entrenchment of capital discipline. Various enhancement projects are tracked through a project management system as we strive to meaningfully move down the cost curve. Through this process, mine planning and forecasting improvement have been reflected in improved consistency in our reported cost performance.
Capital expenditure
Total capital spend for the region was $397m in 2020 compared to $410m in 2019. Capital investment was challenged by the global COVID-19 pandemic, resulting in delayed deliveries and a difficult execution environment. Growth capital of $168m was spent on the redevelopment of the Obuasi mine. Underground Ore Reserve development projects continued at Geita and pre-stripping began at Iduapriem for Teberebie Cut 2. These projects will provide access to orebodies identified for future gold extraction. The balance of the sustaining capital investment was used for capitalised exploration and stay-in-business projects to improve asset integrity and realise business improvements across the operations, to ensure safe and sustainable growth and production.
82
Safety
Regrettably, there were two fatalities in the Africa region in 2020. At Obuasi, in June 2020, an experienced equipment operator was hit by an underground load-haul dumper, while in July 2020 a security guard was hit and killed by a car driven by a private citizen, at the gate to one of Obuasi’s housing estates. Notwithstanding these setbacks, the region saw an improvement in AIFR from 0.62 per millions hours worked in 2019 to 0.55 in 2020.
Ore Reserve
The total attributable Africa Region Ore Reserve was 19.12 million ounces (2019: 17.93 million ounces). This amounts to 65 percent of the group’s Ore Reserve.
Growth and improvement
Siguiri’s combination plant project ramp-up progressed to achieve design throughput rates in the three-stage crushing plant and milling circuit. Recovery improved to 83.2% following completion of three additional CIL tank conversions and other supplementary projects. Commissioning of the fines screening plant planned for 2021 will increase the hard rock capacity of the crushing plant and improve the potential for high-grade hard rock optimisation. Furthermore, following approval of the Siguiri Block 2 feasibility study in 2020, execution is scheduled to begin in 2021.
At Geita, the focus on Ore Reserve development continued with 7,271m of development completed in 2020 compared to 4,130m in 2019. While this development provides access to the underground orebody, it also gives access to underground exploration platforms. Geita is progressing various underground projects which include ventilation, electrical supply, pumping and backfill projects to establish infrastructure for the underground operations at the Star & Comet and Nyankanga mining areas. The Geita Hill underground mining area and environmental permits were obtained and development of the access portal began in late 2020. The feasibility study For the Nyamalilima open pit project, located 2.4km from the Star & Comet underground operation, is in progress with execution planned for 2021. Furthermore, the mine initiated a national electric grid project for which the feasibility study and design are in progress for execution and connection in 2021/2022. The Grid connection planned will deliver a significantly reduced GHG emission footprint and a lower unit cost for power.
At Iduapriem, waste stripping for Teberebie Cut 2 was initiated and ore was mined from Teberebie Cut 1, Cut 3 and Ajopa. The mine is currently undergoing infrastructure development with the first major concrete pouredre-investment to take place from 2021 to 2023. Projects include
a waste-water treatment plant expansion, new TSF and return water dam. Permitting, land compensation and land access requirements run concurrently with the project and will continue as part of discussions with government, the authorities and relevant stakeholders. The mine is in December 2017.the process of commissioning an additional tertiary ore crushing stage to reduce the ore feed size to the milling circuit to deal with the increased rock hardness as deeper ore is extracted. The mill shells arrived on sitebrownfields exploration drilling campaign at the Teberebie and Ajopa pits continued in September,2020.
At Kibali, the Ore Reserve depleted during 2020 was replaced for the second consecutive year, emphasising the success of the
exploration and off-site fabricationOre Reserve replacement strategy in place. The Megi-Marakeke-Sayi prefeasibility study was completed, delivering another viable open pit project that will improve the mine’s open cast and sourcing of electricalunderground ore ratio and instrumentation equipmentenhance mine plan flexibility. Drilling at Gorumbwa highlighted future underground potential. Ongoing conversion drilling at KCD underground continues to deliver additional Ore Reserve to extend the mine life. The mine is well placed to meet its 10-year production targets and cabling,to extend the production beyond this horizon.
The Obuasi redevelopment project continued during 2020, notwithstanding the lastchallenges of COVID-19 which impacted completion of Phase 2 of the project. The project, which began in 2019, was set out in two phases. Phase 1 – Operational readiness – of the mine and plant redevelopment achieved output of 2,000 tonnes per day (tpd) of ore mined and milled. Phase 2 – the mine and plant infrastructure development – was to ramp up to 4,000tpd with commissioning underway by end December 2020.
The project made steady progress across several fronts. Commissioning of the phase 2 mills (4,000tpd capacity) began on
schedule, the Ore Reserve had increased by 22% at year-end and the metallurgical circuit was operating as planned. The mining
ramp-up was challenged by specialist-skills shortages due to COVID-19-related cases, quarantines and ongoing travel restrictions, particularly to and from Australia. Infrastructure development – the KRS ventilation shaft, the paste-fill plant and underground orehandling systems – is progressing to schedule, albeit with reduced flexibility due to similar constraints. Phase 1 achieved commercial production on 1 October 2020.
Operational Readiness continued in the fourth quarter of 2020 with capacity of 2,000tpd achieved. The project’s production for the full year ended 31 December 2020 was 127,000oz, with 30,000oz produced in the fourth quarter of the year. Major contractors have mobilised on site andThis included a new mining contractor is scheduled22-day planned stoppage in December for the tie-in of phase 2 of the project. Mining rates continued to begin mining in the first half of 2018.
83
in parallel with the construction schedule and is expected to contribute to higher plant recoveries in 2018.
Phase 2 construction was 90.1% complete as of 2018.
Attributable gold production (000oz) | Average number of employees | ||||
| Operations | |||||
| Australia | |||||
| 1. Sunrise Dam | 238 | 489 | |||
| 2. Tropicana 70% | 322 | 485 | |||
| Unit | 2017 | 2016 | 2015 | |||||||
| Operation | ||||||||||
| Tonnes treated/milled | Mt | 9.4 | 8.9 | 8.2 | ||||||
| Pay limit | oz/t | 0.06 | 0.06 | 0.06 | ||||||
| g/t | 1.84 | 1.86 | 1.85 | |||||||
| Recovered grade | oz/t | 0.061 | 0.058 | 0.068 | ||||||
| g/t | 1.89 | 1.82 | 2.12 | |||||||
| Gold production (attributable) | 000oz | 559 | 520 | 560 | ||||||
| Cost of sales | $m | 550 | 540 | 525 | ||||||
Total cash costs (1) | $/oz | 743 | 793 | 702 | ||||||
All-in sustaining costs (1)(2) | $/oz | 1,062 | 1,067 | 875 | ||||||
| Capital expenditure | $m | 153 | 109 | 78 | ||||||
| Safety | ||||||||||
| Number of fatalities | 0 | 0 | 0 | |||||||
| AIFR | Per million hours worked | 8.53 | 9.49 | 8.56 | ||||||
| People | ||||||||||
| Average no of employees: Total | 974 | 925 | 836 | |||||||
| Permanent employees | 226 | 211 | 195 | |||||||
| Contractors | 748 | 714 | 641 | |||||||
84
THE AMERICAS
 |  | ||||
The Americas region has three mining operations, –featuring both open pit and deep levelunderground mining –(one in Argentina and two in Brazil) as well as two advanced greenfields projects in Colombia and exploration activities in the Americas region. In addition, there is an active greenfields exploration programme underway in Colombia.United States.
| Attributable gold production (000oz) | Average number of employees | ||||||||||
| Operations | |||||||||||
1. Argentina | |||||||||||
| Cerro Vanguardia (Attr. 92.5%) | 173 | 1,566 | |||||||||
2. Brazil | |||||||||||
| AGA Mineração | 362 | 5,528 | |||||||||
| Serra Grande | 114 | 1,695 | |||||||||
85
Attributable gold production (000oz) | Average number of employees | ||||
| Operations | |||||
1. Argentina | |||||
| Cerro Vanguardia 92.5% | 283 | 2,001 | |||
2. Brazil | |||||
| AGA Mineração | 424 | 4,932 | |||
| Serra Grande | 133 | 1,578 | |||
3. Colombia – exploration programme | |||||
Americas - Key Statistics(1)
| Unit | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Operation | |||||||||||||||||||||||
| Tonnes treated/milled | Mt | 7.5 | 7.2 | 6.8 | |||||||||||||||||||
| Pay limit | oz/t | 0.07 | 0.11 | 0.12 | |||||||||||||||||||
| g/t | 2.46 | 3.79 | 4.14 | ||||||||||||||||||||
| Recovered grade | oz/t | 0.081 | 0.089 | 0.103 | |||||||||||||||||||
| g/t | 2.77 | 3.04 | 3.55 | ||||||||||||||||||||
| Gold production (Attributable) | 000oz | 649 | 710 | 776 | |||||||||||||||||||
| Silver (attributable) | Moz | 3.3 | 3.4 | 5.9 | |||||||||||||||||||
| Cost of sales | $m | 764 | 822 | 838 | |||||||||||||||||||
Total cash costs (1) | $/oz | 721 | 736 | 624 | |||||||||||||||||||
All-in sustaining costs (1) | $/oz | 1,003 | 1,032 | 855 | |||||||||||||||||||
Capital expenditure (2) | $m | 217 | 195 | 176 | |||||||||||||||||||
| Safety | |||||||||||||||||||||||
| Number of fatalities | 0 | 0 | 1 | ||||||||||||||||||||
| AIFR | Per million hours worked | 3.68 | 3.50 | 3.97 | |||||||||||||||||||
| People | |||||||||||||||||||||||
| Average no of employees: Total | 8,789 | 8,114 | 7,973 | ||||||||||||||||||||
| Permanent employees | 6,158 | 5,869 | 5,755 | ||||||||||||||||||||
| Contractors | 2,631 | 2,245 | 2,218 | ||||||||||||||||||||
| Unit | 2017 | 2016 | 2015 | |||||||
| Operation | ||||||||||
| Tonnes treated/milled | Mt | 7.5 | 7.0 | 7.0 | ||||||
| Pay limit | oz/t | 0.104 | 0.100 | 0.098 | ||||||
| g/t | 3.576 | 3.421 | 3.351 | |||||||
| Recovered grade | oz/t | 0.102 | 0.106 | 0.108 | ||||||
| g/t | 3.49 | 3.64 | 3.71 | |||||||
| Gold production (Attributable) | 000oz | 840 | 820 | 831 | ||||||
| Silver (attributable) | Moz | 5.8 | 4.9 | 4.4 | ||||||
| Cost of sales | $m | 851 | 752 | 719 | ||||||
Total cash costs (2) | $/oz | 638 | 578 | 576 | ||||||
All-in sustaining costs (2)(3) | $/oz | 943 | 875 | 792 | ||||||
Capital expenditure (4) | $m | 234 | 225 | 196 | ||||||
| Safety | ||||||||||
| Number of fatalities | 0 | 1 | 1 | |||||||
| AIFR | Per million hours worked | 3.29 | 3.96 | 5.61 | ||||||
| People | ||||||||||
| Average no of employees: Total | 8,511 | 8,126 | 7,679 | |||||||
| Permanent employees | 5,888 | 5,653 | 5,492 | |||||||
| Contractors | 2,623 | 2,473 | 2,187 | |||||||
(1)Total cash costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A: Operating Results-Non-GAAP analysis”.
(2)100 percent, (not attributable) and includes Colombia.
Production and costs
At Cerro Vanguardia in Argentina, production of 173,000oz was 23% lower than 225,000oz the previous year. As this is a mature operation, this decline was largely due to the lower grades mined and reduced tonnages owing to the impact of the COVID-19 pandemic. Cerro Vanguardia had been performing well in terms of planned gold production using the available stockpile but unfortunately production was halted twice during the last quarter of the year – first a voluntary closure after the identification of positive COVID-19 cases at site in November, followed by a mandatory government-imposed lockdown in December.
In Brazil, production of 476,000oz was 2% lower than the previous year, mainly due to series of operational issues that were compounded by COVID-related restrictions. Production had improved by year end with production in the second half of the up
by 7% as a result of an increase in tonnes of ore mined.
At AGA Mineração, full year production was 362,000oz, in line with 2019 despite the impact of stoppages and absenteeism due to COVID -19, unexpected and heavier-than-normal rains in the first half of the year, and geotechnical issues on the high-grade programmed stope. The Cuiabá complex’s production declined 7% lower than in 2019 due to geological modelling which reduced the thickness of the orebody at the lower levels of the mine.
At the Córrego do Sítio (CdS) complex, production increased by two percent22% to 840,000oz101,000oz compared with 2019. This increase was due to the higher tonnages and grades placed onto the heap leach and the higher tonnage treated in 2017, reflecting higher outputthe sulphide circuit. This improvement resulted from the strategy in place at CdS Mine 1 to increase development and production. Following consolidation
of the São Bento operation (CdS II), plant capacity increased and implementation of the improvement project to improve reliability of the sulphide plant was completed.
At Serra Grande, production declined 7% to 114,000oz, mainly resulting from lower grades due to geological model changes, grade control changes and operational delays at high grade stope areas, further impacted by absenteeism due to the COVID-19 pandemic.
Cost of sales in the Americas region decreased by 8% from $822m in 2019 to $764m in 2020. The region’s all-in-sustaining cost of $1,003/oz for 2020 was 3% lower than $1,032/oz in 2019, a consequence mainly of depreciation against the dollar in both the Brazilian and Argentinian operations drivencurrencies, changes in rehabilitation provisions (economic parameters) and, in Argentina, a higher silver by-product price that was partially offset by operational improvementslower gold production and aninflationary
pressures.
86
Total cash costs were down 2% for the region. In Brazil the decrease in total cash costs reflect the weaker exchange rate of the Brazilian real against the US dollar and the increase in stockpile inventories, coming in lower year-on-year despite lower gold
production and higher operational costs related to spare parts, rental equipment and mine contractors.
At Cerro Vanguardia in Argentina, total cash costs were 4% higher year-on-year, mainly as a result of increased inflation mainly relating to increments in salaries. Unfavourable stockpile movements due to lower tonnes treated.mined and treated and higher royalties on the back of the higher average gold price received also contributed to increased costs. These were partially offset by higher efficiencies derived from reduced consumption of energy, maintenance services and spare parts.
Regional capital expenditure of $217m was 11% higher than the previous year and was mainly on Ore Reserve development, exploration, enhanced TSF management and maintenance, mainly for the Brazilian operations. This expenditure included $49m for the Colombian projects, mainly in relation to the MCQ land capitalisation and completion of the technical feasibility studies and the bridging engineering phase, as well as the Gramalote drilling programme and activities to do with the completion of the feasibility studies.
The Brazilian operations maintained focus on Ore Reserve and Mineral Resource conversion to improve confidence levels, while
work is underway to convert the TSFs to dry stacking.
At Cerro Vanguardia, in Argentina, COVID-related stoppages resulted in reduced Ore Reserve development as fewer metres were developed. Capital expenditure for the year was spent mostly on the replacement of mine equipment. During 2020, the mine continued with its strategy to purchase larger trucks to increase hauling and loading capacity to further improve productivity and haulage volumes. Fleet renewal will continue in 2021.
The outlook for growth capital expenditure outflows for the region until 2024 relate mainly to the Gramalote and Quebradona projects in Colombia. Quebradona will enable the group to diversify into copper production at an attractive estimated copper all-in
sustaining cost margin of between 60% to 70%. Some increase in the capital outlay is also expected between 2021 to 2022 at AGA Mineração production increased four percent year-on-year, boosted by Córrego do Sítio’s strong performance, a resultin respect of improved geological modelling that assisted the recovery from the geotechnical challenges faced at the startOre Reserve development and exploration to increase orebody confidence and ongoing TSF conversion to dry-stacking. According to current estimates, capital expenditures in 2021 required to implement this conversion to dry stacking will be in excess of the year at the Córrego do Sitio complex. After a challenging start to 2017, various initiatives$70 million.
Safety
There were implemented at the Cuiabá complex to improve future performance. These initiatives included the appointment of a new management team and adoption of an integrated planning system. The operation saw a seven percent increase year-on-yearno fatalities in ore treated, an improvement which we believe to be sustainable. The challenges at Cuiabá were due to delays in development of infrastructure that hindered access to high-grade areas.
Ore Reserve
At the end of 2017,2020, the total attributable Ore Reserve for the Americas Region,region was 5.27.52 million ounces (2016: 3.1(2019: 7.2 million ounces). This is approximately ten25 percent of the group’s total Ore Reserve.
Growth and improvement
Despite a drop in productivity,production, the Cuiabá complex achieved a record 19,357m of development in the year, an increase of 17% from 2019 (16,563m), together with the region benefitting from ongoing asset optimisation work.processing of record volumes at the plant, 1.905Mt in 2020 versus 1.799Mt in 2019. These results are outcomes of an Operational Excellence strategy conducted in 2020. As part of the long-term growth strategy, the potential for new orebodies is being investigated in regional targets, along with plans for the deepening of the Cuiabá mine and the building of orebody knowledge at depth and related modelling of geological behaviour.
At Córrego do Sítio work is underway(CdS), the focus remains in advancing the exploration drilling campaign to enable reserve addition to support mine flexibility and support a future expansion. In the long term, replacement of the Lamego Ore Reserve will provide expansion opportunities at the CdS complex. In the short-to-medium term, exploration, evaluation and implementation of additional production sources are expected at both Cuiabá and CdS II.
At Serra Grande, exploration and Ore Reserve development will create options to further improve development productivity levels. Conversion rates of Mineral Resource to Ore Reserve are increasing and work is underway to improve recovery rates. Drilling campaigns continue to confirm the Ore Reserve that willscale-up production, extend the life of mine including work on a new open-pit (Córrego do Sítio III) and sustain higher margins. Exploration and Ore Reserve development will create options to increase production, extend mine life and improve margins. An exploration drill campaign has successfully confirmed the new underground mines at Mina II and São Bento Deep.
87
Table of the plant’s CIL leaching conversion and continuous efficiency improvement initiatives. The Palmeiras South negotiations, aimed at reaching agreement on possible accelerated exploration to confirm the area’s potential, are at an advanced stage.Contents
At Cerro Vanguardia, exploration during 2020 continued searching for new viable orebodies to extend the mine planlife. This included
successful channel sampling and diamond drilling. A total of 25,073m was executed on schedule, followingdrilled as part of a long-term programme to pursue the initiative launched in 2015 to accelerate open-pitextension of mineralisation along and underground operations to optimise economic performance over the remaining lifedown-dip of mine, and to potentially increase production. New projects and alternatives to extend life of mine will be assessed during 2018.
programme also targeted minor secondary veins and tested new targets several kilometres away from the main zone. Plans for 2021 include further diamond drilling to find new exploration site. targets and determine a new Inferred Mineral Resource as well as to convert the existing Inferred Mineral Resource into Ore Reserve, as well as additional trenching, channel sampling and ground magnetics surveys.
The grant of force majeure isQuebradona and Gramalote projects are expected to complete feasibility studies and be presented to the board for one year and will expireapproval in June 2018, after which such declaration will need to be extended. At Quebradona, following completion of a conceptual studythe second half in 2016, the focus in 2017 as the first phase progressed was on evaluating the alternatives to be considered during the prefeasibility phase, which2021. Once approved, construction at Gramalote is expected to be concludedtake about three years with production expected to start in 2018.2024. At Quebradona, construction is anticipated to take approximately four years, starting first with the underground access tunnel development, followed by orebody development and process plant construction.
In Brazil, starting from the second quarter of 2020, the Brazilian operations reviewed their portfolio to include new initiatives to create value in line with the Operational Excellence programme. Initiatives included operational and administrative efficiency gains across all sites and regional office. Increasing mine flexibility was a key focus in 2020. Operations set new records for development and processing, which helped offset negative impacts of geological model changes and other operational challenges faced throughout the year, including COVID-19.
In Argentina, the Operational Excellence initiatives related to different areas were implemented during 2020. The alternatives included mining methods,most significant savings resulted from the renegotiation of the natural gas contract.
88
AUSTRALIA
 |  | ||||
| Attributable gold production (000oz) | Average number of employees | ||||||||||
| Operations | |||||||||||
| Australia | |||||||||||
| 1. Sunrise Dam | 256 | 622 | |||||||||
| 2. Tropicana 70% | 298 | 608 | |||||||||
AngloGold Ashanti’s Australian assets comprise the wholly owned Sunrise Dam and the 70 percent-owned Tropicana Gold mine accesslocated in the north-eastern goldfields of the state of Western Australia.
89
Australia - Key Statistics
| Unit | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Operation | |||||||||||||||||||||||
| Tonnes treated/milled | Mt | 10.2 | 10.1 | 9.5 | |||||||||||||||||||
| Pay limit | oz/t | 0.06 | 0.06 | 0.07 | |||||||||||||||||||
| g/t | 1.95 | 1.95 | 2.10 | ||||||||||||||||||||
| Recovered grade | oz/t | 0.054 | 0.060 | 0.065 | |||||||||||||||||||
| g/t | 1.69 | 1.87 | 2.01 | ||||||||||||||||||||
| Gold production (attributable) | 000oz | 554 | 614 | 625 | |||||||||||||||||||
| Cost of sales | $m | 705 | 632 | 622 | |||||||||||||||||||
Total cash costs (1) | $/oz | 968 | 730 | 762 | |||||||||||||||||||
All-in sustaining costs (1) | $/oz | 1,225 | 990 | 1,038 | |||||||||||||||||||
| Capital expenditure | $m | 143 | 149 | 156 | |||||||||||||||||||
| Safety | |||||||||||||||||||||||
| Number of fatalities | 0 | 0 | 0 | ||||||||||||||||||||
| AIFR | Per million hours worked | 3.74 | 7.33 | 9.14 | |||||||||||||||||||
| People | |||||||||||||||||||||||
| Average no of employees: Total | 1,230 | 1,140 | 1,051 | ||||||||||||||||||||
| Permanent employees | 259 | 249 | 238 | ||||||||||||||||||||
| Contractors | 971 | 891 | 813 | ||||||||||||||||||||
(1)Total cash costs and project layout.all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A: Operating Results-Non-GAAP analysis”.
Production and costs
The Gramalote project,Australia region produced 554,000oz in 2020 compared to 614,000oz in 2019, as the completion of grade streaming and a joint venture between AngloGold Ashanti (51 percentlower proportion of open pit ore in the mill feed resulted in a 17% drop in year-on-year attributable production at Tropicana, in line with the mine plan.
At Sunrise Dam production was steady at 256,000oz as the mine focused on a strategy to fill the mill with the best quality ore through a programme of underground exploration and manager)development to build orebody knowledge and B2Gold (49 percent), declared its maidenadd to the Ore Reserve of 63.7Mt @ 0.86 g/t gold, at an attributable contained metal content of 1.8Moz. Gramalote represents a long-term option for AngloGold Ashanti, and all avenues to realise value from this important asset remain open. Work will continue to optimise all aspectsReserve. The strategy involves maximizing the extraction of the project during its feasibility phase,Vogue orebody, which is currently under way. the primary source of underground ore, and providing mining flexibility by developing an alternate mining area. Vogue will contribute 80% of underground ore over the next two years, with multiple ore sources making up the remaining 20% of mill feed. Mill throughput remained consistent at 4.1Mt for 2020 and metallurgical recovery is benefiting from the float ultra-fine grind circuit that was implemented in 2018.
Pre-stripping of the Golden Delicious open pit, 12km from the Sunrise Dam processing plant, began in the December quarter 2020. Ore production from Golden Delicious is scheduled to begin in the June quarter of 2021 and the open pit is expected to deliver approximately 136,000oz over a 2.7-year life of mine. From the second half of 2021, Golden Delicious ore will totally displace the low-grade stockpile mill feed, enabling grade streaming to be applied through 2022.
Tropicana produced 298,000oz (attributable) for the year compared to 360,000oz in 2019. Production was lower year-on-year as planned. Up until June 2020, ore production from the open pits exceeded plant capacity, allowing higher-grade ore to be preferentially treated, while lower-grade ore was accumulated on stockpiles. With the completion of the Tropicana pit and stage one of the Havana pit (Havana cutbacks 1, 2 and 3) mid-way through the year, this grade streaming process ceased, in line with the mine plan.
The enhanced prefeasibilityBoston Shaker underground mine started commercial production on time and on budget in September 2020. When the underground mine reaches its full production rate of 1.1 Mtpa in the second half of 2021, it will contribute 100,000oz annually to gold production. The mine will achieve payback in three years. Waste stripping for stage 2 of the Havana pit began in the second
half of 2020 and while waste stripping is underway, mill feed will be made up of ore from the Boston Shaker underground mine, the Boston Shaker open pit and stockpiles.
The Tropicana processing plant continued to perform well in 2020, with throughput and metallurgical recoveries higher than the previous year. Further efficiency improvements are planned for 2021 to increase throughput from 8.8Mtpa to 9Mtpa in the second half.
Cost of sales in the Australia region increased from $632m in 2019 to $705m in 2020. The region’s all-in sustaining cost was $1,225/oz in 2020 compared to $990/oz in 2019. This was largely due to a 41% increase in all-in sustaining cost at Tropicana
90
where lower production and unfavourable inventory movement had a negative impact. The all-in sustaining cost at Sunrise Dam increased by 6% due mainly to costs related to a higher volume of ore purchases from external sources (298,000t compared to 71,000t in 2019) in 2020. Costs were also impacted by additional unbudgeted COVID-19 expenditure.
Capital expenditure
The region’s capital expenditure of $142.6 million in 2020 remained in line with 2019 capital expenditure of $149.2 million. A total of $89.5 million was spent at Tropicana including $25.3 million of growth capital to complete the Boston Shaker underground project on time and on budget. Deferred waste and capitalised prestripping, representing 52% of the total in 2020, remains the focus at Tropicana.
At Sunrise Dam a total of $52.8 million was spent during 2020, which includes $3 million spent on the commencement of the Golden Delicious growth project. Golden Delicious will reach commercial production in the third quarter of 2021. Ore Reserve development capital expenditure at 42% of the total in 2020 remains the focus at Sunrise Dam to unlock future gold production.
Safety
There were no fatalities in the Australia region in 2020, continuing a positive safety trend since the commissioning of Tropicana in 2013. The site ended the year with the AIFR for the region dropping to 3.74. The regional LTIFR for 2020 was 0.79. Notably Tropicana has had three restricted work case injuries for two years and no lost time injuries for three years.
Ore Reserve
At the end of 2020, the total attributable Ore Reserve for the Australia region was 3.04 million ounces (2019: 3.2 million ounces). This is approximately 10 percent of the group’s total Ore Reserve.
Growth and improvement
At Sunrise Dam the substantial underground diamond-drilling programme that began in 2019 is generating encouraging results, discovering the Frankie orebody during 2020 and extending the Vogue and Carey Shear ore zones. Multiple ore zones remain open along strike and at depth.
Two major steep lodes have been defined at Frankie spanning in strike length and 400m in height. Frankie is close to existing underground infrastructure and based on results to date this area has the potential to deliver approximately 500,000t of ore per annum over a five-year period from 2023. A dedicated diamond drilling platform was established in early 2021 to better drill out this zone, and three diamond drill rigs were drilling from existing drives for strike extensions to the north and south.
Regional exploration continues to seek additional satellite ore sources within trucking distance of the Sunrise Dam processing plant. The aim is to deliver annual ore production of 3 Mtpa to displace lower grade surface stockpiles.
The company holds 880 square kilometres of tenements in this highly prospective district, some in the Butcher Well joint venture with Northern Star and some in its own right. Drilling will continue in 2021.
There is significant potential to unlock known extensions of mineralisation beneath the Tropicana and Havana open pits as well as extensions at depth in the Boston Shaker underground.
A study to look at the trade-off between mining deeper Havana mineralisation via a third cutback or by underground methods was initiated in 2020. This study will be completed in the first half of 2021.
Development of a 500m underground drill drive from the Boston Shaker decline to test beneath the Tropicana open pit was completed in September 2017. AngloGold Ashanti2020 and diamond drilling was underway early in 2021. The drill drive is currentlywell-positioned to provide production access to Tropicana underground mineralisation, should an Ore Reserve be defined. This drive could also be extended to cost-effectively explore the mineralised system beneath the open pits to the south and ultimately access the Havana underground mineralisation in discussions with its joint venture partner, B2Goldthe future.
Near-mine exploration continues to focus on howunderstanding the geology to the north and south of Tropicana, seeking strike extensions and offsets to the Tropicana orebody.
Satellite open pit opportunities are being assessed along the mineralised corridor to the north of the mine at Springbok and Angel Eyes, to the south at Rusty Nail and further progress the project.south at Madras and New Zebra.
91
SOUTH AFRICA
 |  | ||||
The project lies on the eastern flanksale of the Cordillera Central, nearSouth African assets to Harmony closed on 30 September 2020. As a result, the towns of Providencia and San Jose del Nusfigures in this section relate
to the nine months ended on 30 September 2020, unless the context indicates otherwise.
The discontinued operations in the municipalitySouth Africa region are:
West Wits: Mponeng
Surface operations
| Gold production (000oz) | Average number of employees | ||||||||||
| Operations | |||||||||||
| South Africa | |||||||||||
1. West Wits | |||||||||||
| Mponeng | 134 | 5,040 | |||||||||
2. Surface operations (1) | 107 | 2,254 | |||||||||
(1)Includes MWS for purposes of San Roque,this annual report. It is operated and managed as a separate cash-generating unit.
92
South Africa Key Statistics
| Unit | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Operation | |||||||||||||||||||||||
| Tonnes treated/milled | Mt | 0.4 | 35.1 | 34.9 | |||||||||||||||||||
Pay limit (1) | oz/t | 0.40 | 0.33 | 0.44 | |||||||||||||||||||
| g/t | 14.60 | 11.90 | 16.11 | ||||||||||||||||||||
Recovered grade (1) | oz/t | 0.120 | 0.183 | 0.219 | |||||||||||||||||||
| g/t | 3.75 | 5.69 | 6.82 | ||||||||||||||||||||
| Gold production | 000oz | 241 | 419 | 487 | |||||||||||||||||||
| Cost of sales | $m | 287 | 479 | 590 | |||||||||||||||||||
Total cash costs (2) | $/oz | 1,149 | 981 | 1,033 | |||||||||||||||||||
All-in sustaining costs (2) | $/oz | 1,296 | 1,132 | 1,178 | |||||||||||||||||||
| Capital expenditure | $m | 35 | 57 | 73 | |||||||||||||||||||
| Safety | |||||||||||||||||||||||
| Number of fatalities | 4 | 0 | 2 | ||||||||||||||||||||
| AIFR | Per million hours worked | 6.12 | 10.00 | 10.25 | |||||||||||||||||||
| People | |||||||||||||||||||||||
| Average no of employees: Total | 7,294 | 6,975 | 17,308 | ||||||||||||||||||||
| Permanent employees | 6,418 | 6,202 | 15,557 | ||||||||||||||||||||
| Contractors | 876 | 773 | 1,751 | ||||||||||||||||||||
(1)Refers to underground operations only.
(2)Total cash costs and all-in sustaining costs are non-GAAP measures. For further information on these non-GAAP measures, see “Item 5A: Operating Results-Non-GAAP analysis”.
Production and costs
The South Africa region’s operations produced 241,000oz at a total cash cost of $1,149/oz for the nine months to September 2020 compared to 307,000oz produced at a total cash cost of $1,003/oz for the same nine-month period in 2019. The decline in annual production was mainly due to the slow start to the year, a result of poor ground conditions; safety stoppages owing to seismic events and related fatalities; and the national COVID-related lockdown implemented at the end of March 2020.
Cost of sales in the northwestSouth Africa region decreased from $479m in 2019 to $287m in 2020. All-in-sustaining cost for the South Africa region for 2020 was $1,296/oz, versus $1,156/oz the prior year, with the increase due to lower gold production, higher royalties, inflationary cost increases for power, labour and consumables, higher hauling contractor costs and IT-related expenditure at surface operations. This was partially offset by favourable by-product contributions,
lower sustaining capital expenditure, and the weaker rand against the dollar.
Capital expenditure
Total capital spend in South Africa was $35m for the nine months ending September 2020 compared to $57m for the 2019 year.
Safety
Regrettably there were four fatalities in the South Africa region in 2020, which occurred at Mponeng mine, three resulting from a seismic fall of ground related incident and one a rail bound equipment related incident. The AIFR was 6.12 for the Antioquia Department. It is approximately 230km north-westyear, an improvement year-on-year.
93
EXPLORATION REVIEW
Our exploration is focused on two of our strategic focus areas: creating value by providing long-term optionality and improving the portfolio quality. TheOur exploration programme covers greenfields and brownfields exploration.
These strategic objectives are met by:
• Greenfields exploration, which aims to discover large, high-value Mineral Resource, thatwhich will eventually lead to the development of new gold mines. Our greenfields exploration team was recognised by a leading industry research group, in 2015 as the industry’s most successful in Mineral Resource discovery. The team has a proven track record that includes the discovery of world-class ore bodies at La Colosa, Gramalote, Tropicanamines; and Nuevo Chaquiro. These discoveries are attributed to our committed and professional team of geoscientists working on a portfolio of highly prospective and rigorously prioritised greenfields ground holdings.
• Brownfields exploration, which focuses on delivering value through incrementalaccretive additions to ourthe Ore Reserve inat existing mines as well as new discoveries in defined areas around existing operations. Brownfields exploration actively drives the creation of value by growing our Mineral Resource and Ore Reserve, our major assets. The brownfields exploration programme is based on innovative geological modelling and mine planning and continual optimisation of our asset portfolio.
Greenfields exploration
Australia
Laverton District – AGA (100%) and include ground positions in Argentina and Tanzania. Actual expenditure on greenfield exploration activities was $30.7m in 2017 and this included over 64km of diamond, reverse circulation and aircore drilling.
Aircore (AC), reverse circulation (RC) and along the western margin of Lake Careydiamond drilling (DD) was completed in the Laverton districtDistrict, with a total of Western Australia, including those hosting64,041m drilled in 2020. At the historically-mined Butcher WellBismarck prospect (70% AngloGold Ashanti), six DD holes were completed for 1,128m. The drilling intersected predominantly basaltic-andesite volcanic rocks with gold deposits.mineralisation hosted in narrow sulphidic breccias and associated stockwork quartz veins. At the Turing prospect (100% AngloGold Ashanti), 244 AC holes for 10,949m, 11 RC holes for 1,546m and 4 DD holes for 1,127m were completed. The AC drilling defined a greater than 2km long, NNW-trending zone of anomalous gold, which remains open along strike. Follow-up RC and DD returned mostly low-tenor gold intercepts, apart from isolated high-grade results associated with coarse visible gold in narrow quartz veins. At the Cleveland prospect (100% AngloGold Ashanti), 123 AC holes for 9,728m and 13 DD holes for 2,494m were completed. Several anomalous gold intercepts were received from AC drilling with results open from the southernmost drill line. The DD was designed to extend RC holes and test for down-plunge extensions to a 500m long, NNW-trending zone of gold mineralisation identified in the first half of 2020. Most of the DD holes intersected intervals of pyrite-chalcopyrite mineralisation within quartz-sericitepyrophyllite- chloritoid schist. AC drilling was also completed at the Vampire (1,393m), Pioneer (1,239m), Seguin (558m), Triton (11,844m), Argonaut (1,011m), Juno (17,790m) and Kraken (3,144m) prospects.
North Queensland (100% AngloGold Ashanti)
Field programmes consisting of mapping and soil sampling continue to be postponed due to travel restrictions related to the COVID-19 pandemic.
United States
Silicon (100% AngloGold Ashanti)
At Silicon, the Plan of Operations was approved during the third quarter of 2020, and earthworks started for the construction of pads and roads throughout the central Silicon project area. One RC hole was completed (360m) before drilling was stopped. Drilling was restarted in October, with a total of 9,728m of combined diamond and RC drilling completed during the second half in 2020. Core drilling also began at the Merlin target in the southern Silicon project area during the period. The final $2.4m payment of the Silicon Option Earn-in Agreement was paid to acquire 100% ownership of the Silicon project.
Rhyolite – AngloGold Ashanti can earn up to 70 percent(100% AngloGold Ashanti)
In the first half of the joint venture by spending A$15myear, RC drilling for 2,423m was completed with no significant results received. Additional prospecting work was carried out at Rhyolite in second half of the year.
Transvaal – AngloGold Ashanti (100% AngloGold Ashanti)
At Transvaal, drill target delineation was completed during the period based on detailed geological mapping and surface rock chip geochemical sampling from first half of 2020. IP lines were completed in the target area to refine drill targets developed in the fort half of 2020. A Notice of Intent permit was submitted and received for drill pad and access construction for the first targets.
Other
In Brazil, additional exploration licenses were granted at the WBC project.
In Argentina and West Africa, exploration focused on target generation activities.
Brownfields exploration
During 2020, brownfields exploration activities were undertaken across the globe. Brownfields exploration completed 1,409km of drilling with a total expenditure of $63.1m (capital) and $67.7m (expensed) for the year.
94
Africa
Tanzania
Capitalised (underground) and expensed (surface/underground) drilling programmes completed a total of 117,938m during the year at a cost of $27.2m.
Mineral Resource development drilling continued at the Nyamulilima deposit. Results confirmed the continuity of the ore zones within 48 monthsthe eastern and western mineralised domains and increased the Mineral Resource confidence within the optimised pit shells and allowed for the declaration of a maiden Ore Reserve. Results from start datethe Mineral Resource development drilling at Nyankanga Block3, Star & Comet Cut 3 and at Cut 2 confirmed the Mineral Resource model interpretations.
Sterilisation drilling for the waste dump was carried out and show no significant intersections.
Mineral Resource definition drilling was carried out at Nyankanga Block 1, returning results that confirmed the down-dip continuity of mineralisation at Block 1.
Reconnaissance drilling programmes into the footwall of the Nyankanga underground project returned low grade, erratic mineralisation hosted within these deep-seated structures. Reconnaissance drilling carried out at Star & Comet Cut 2 returned
results that confirmed the presence of the footwall structure.
Guinea
Capitalised and expensed drilling programmes completed a total of 85,119m during the year at a total cost of $10.9m.
At Block 1 infill drilling occurred at the Kami Saddle, Sintroko West, Sanu Tinti, Sokunu, Bidini, Bidini-Tubani-Kalamagna pushback, Sofore-Tubani, Bidini North, Kami and Seguelen PB2.
Reconnaissance drilling occurred at Kami North, Kami West and South, Solakoro North, Seguelen, the Carbonate Hills, Komatiguiya South East, Seguelen PB2, Sorofe-Tubani, Kossise and Balato NW. In Block 2, Saraya infill drilling occurred and sterilisation drilling was carried out at Foulata. At Saraya West E.L. and Foulata reconnaissance drilling was completed.
Assays results were received for Sokunu northwest infill drilling, Sintroko West reconnaissance drilling, Sintroko West infill drilling and Komatiguiya southeast reconnaissance drilling.
Mapping focused on improving the understanding of the geology of the Bidini, Sanu Tinti, Kalamagna, Kami and Tubani pits. field works was also conducted at Doko, Didid, Kossisem Kozan and Sokunu and there were encouraging observations.
Geometallurgical proxy data collection and interpretation were performed, and samples have been analysed respectively for pXRF, Terraspec and Equotip. At Saraya, metallurgical DD deeper hole drilling was completed, aimed at understanding Western intrusion.
Ghana
At Iduapriem, drilling totalled 47,164m at a cost of $6.4m.
During the year, exploration drilling principally focussed on Block 1 East and West, Efuanta, Badukrom and the Block 5 xtension projects.
The Block 1 exploration project involved mapping and Mineral Resource conversion drilling at Block 1 Central, Block 1 East and Block 1 West. Significant intersections were reported for Block 1 East.
At Efuanta, drilling was wrapped up with significant intersections reported. While at Badukrom, drilling commenced in the fourth quarter of 2020 and reported significant intersections.
One hole was drilled at Block 3 West to earn 51 percent and a further A$10m within 24 months thereafter to earn 70 percent. Work completedascertain the weathering profile down dip of the pit as part of the agreement in 2017 included 26.6kmreturn water dam feasibility studies.
Block 5 extension drilling via RC and DD returned significant intersections. Sampling of reverse circulationthe Mile 8 auger drilling project was completed, and diamond drilling, 20.4km of aircore drilling and 3,897 ground gravity stations. The work focused on Butcher Well, where drilling returned several very encouraging intercepts. In addition, aircore drilling at the nearby Mt Minnie project returned several encouraging results over 3km of strike extent and follow up reverse circulation and diamond drilling confirmed these results.
At Obuasi, drilling was completed during the year.
95
Exploration and infill drilling activities continued on 41 level in Block 10, and in stockpiles 12, 13 and 14 along the ODD 32 level in Block 8.
Grade control drilling continued in Block 8, 27 and 29 Level, Sansu 18 Level and 26 Level and 28 KRS in Block 10. Results from 41 Level north and south drilling confirmed the Mineral Resource models.
Results from the reconnaissance drilling from stockpiles 12, 13 and 14 along the ODD showed continuity in grade and structure within the Obuasi fissure.
Grade control drilling results at 27 L 312, at 28 L KRS 295 and at 26 L in Sansu 3 shows continuity of the Obuasi fissure but variability in width.
Democratic Republic of the Congo
Capitalised and Expensed drilling programmes completed a total of 17.845m during the year at a cost of $3.6m. The focus of exploration was on Mineral Resource replacement/addition and underground projects.
Drilling at KCD is in progress, with additional deep holes planned as the initial deep hole results were not encouraging, possibly clipping the edge of the payshoots.
Results returned from the Ikamva East and Kombokolo confirm the models. Two identified targets are to be tested with proposed
drilling in the first quarter of 2021 at Ikamva area.
At Madungu, the target shows some upside with possible plunge extent to the mineralisation and further holes are planned. At Oere, overall results from both drilling and trenching programmes support the current model.
While for the Kibali region, the KZ geological map was updated and four holes drilled at Mponeng’s Western Ultra Deep Levels (WUDLs). All these holes target the Ventersdorp Contact Reef.
Americas
Argentina
In Argentina, a total of 25,075m of drilling was completed at a cost of $4.4m.
A total of 0.93km of channels were carried out on the sites rehabilitated. PilotingCarmela, Dora, Teresa and Gabriela veins in the southern and central parts of surface drill hole UD63A and UD61the tenements Drilling was completed. Site establishment is underway andcarried out to test downdip extension of vein mineralisation at the foundations have been completed.
Drilling was also carried out to test the extension of mineralisation in poorly-drilled areasless well-defined veins outside the main district at Dora, El Trío, Oveja and Trinidad.
Brazil
In Brazil, at Cuiabá and Lamego a total 89,251m was drilled at a cost of Ariadna, El Palo, Gesica, Patricia, Patty, Teresa, Vanguardia E$9.6m.
At Cuiabá, Mineral Resource Conversion drilling on Levels 20 and 3W, Verónica, Goyo, Portero, Zorro veins.21 was completed at the beginning of the fourth quarter of 2020. The Claudia joint venture earn-inL20 FGS/SER (main orebodies) drilling campaign continues, and excellent results reported. A directional drilling programme started in March and focused on Fonte Grande South.
The intensive drilling/ mapping campaign within the quartz-vein satellite orebodies was concluded ahead of its first-year anniversary. A ground geophysics programme designedcompleted and the model has been updated. Several significant intercepts were also reported.
Drilling at secondary orebodies: Viana, Serrotinho and Galinheiro extensions (levels 04 and 05) returned good results confirming theorebodies potential to search for shallow blind structures is ongoingcreate mining flexibility at shallower levels.
In the regional programmes, at Descoberto a 2nd drill rig commenced drilling and willgood results continue to be reported. At Tinguá various exploration activities progressed well including mapping, soil sampling, and resulted in positive outcomes. The historical surface galleries surrounding or associated with Cuiabá Mine were scanned. At Matarelli, a geochemical soil survey was conducted, and the first half of 2018.results showed local gold anomalies.
96
At Lamego, drilling was done at Cabeça de Pedra and at Carruagem. The drilling was predominantly focused on the Carraguem SW orebody where drilling is being undertaken from a hangingwall drive. The results are promising, especially on the normal limb where the Carraguem ore body shows continuity along with Carraguem SW. Mineral Resource modelling is in progress.
during the year.
At CdS I, underground drilling focused on Cachorro Bravo, Laranjeiras and Carvoaria with 78 percent (41,903m)positive results from all targets. Surface drilling was carried out at Rosalino, Campinas and Mutuca and retuned positive results.
CdS II drilling was carried out at São Bento, Sangue de Boi and Pinta Bem Sul with positive results. Results are still pending for Pinta Bem Sul.
CdS III drilling continued at Jambeiro target and Anomalia as well as sterilisation drilling for the CdS III mining project. Most results are pending.
At Serra Grande, capitalised and expensed drilling programmes completed a total of 117,057m at a cost of $7.8m.
Drilling focused on completing the drilling programme at Ingá, Forquilha, Mangaba-Corpo IV, Angicão (D Tereza), Mangaba, Palmeiras South Mine, Superior Zone (Mine III), VQZ (deep mine) and Pequizão.
The Mineral Resource evaluation process has been finished with Ore Reserve additions of 343koz.
Colombia
In Colombia, at La Colosa, no exploration occurred.
At the Quebradona project, drilling to cover the vent shafts and the planned ore passes was completed, and all results have been reported. Grade control schedule activities were reviewed for the Quebradona Advanced Geology project. Operational Readiness final adjustments and FS chapters are expected to include the summary of these activities up the end of January 2021. The 2020 geotechnical drilling programme for infrastructure sites has been concluded. The geotechnical soils testing programme and rock test work is currently in progress.
Australia
Exploration field reconnaissance, grab sampling and mapping was performed.
At Sunrise Dam capitalised and expensed drilling programmes completed a total of 214,294m at a cost of $30.6m during the year.
Eleven underground rigs were used during the period, for infill, and reconnaissance drilling at Frankie, Frankie Extensions, Carey Shear, Porphyry Steeps, Cosmo East, MWS Steeps, Hammerhead South, Vogue South, Vogue East, Vogue Deeps, Elle, Western Ramps and Flamingo.
Exploration/reconnaissance drilling was conducted at Stella and Western Ramps. Regional surface exploration targeted Orchard,
Pink Lady, Sunrise North and Golden Delicious Significant intercepts were reported for Vogue, Frankie, Carey, Hammerhead South, Elle, Cosmo East, Western ramps and Porphyry Steeps.
At Tropicana, drilling completed 127,468m at a cost of $10.2m.
Mine Mineral Resource development drilling comprised of in-pit Mineral Resource Confidence drilling at BS03; Mineral Resource
confidence drilling at Crouching Tiger as part of the drilling being done underground in the CdSI and CdSII mines. The purpose of these drilling programmes was for Mineral Resource conversion to support the production plan. Surface exploration drilling (12,084m) had three distinct purposes, targeting Mineral Resource addition (3,463m), Mineral Resource conversion (8,515m) and new targets (106m).
diamond drilling at Tropicana underground.
Regional exploration AC drilling was carried out at Paradise, Madras, New Zebra, Husky, Sanpan, Phoenix North, Bushwacker and Snowball. RC and diamond drilling were completed at Madras/Masala, Springbok, Highball, Hat Trick, Phoenix, Voodoo Child, Wild Thing, Angel Eyes and Sazerac. The best assay results were achieved from the Mangaba target that increased the ore body’s grade confidence, while continuity of the inferior zone was confirmed at Flamboyant. Significant intersections were returned from the down-plunge extension of Orebody VI, confirming both grade and thickness, as well as from structures below Orebody VI. At Structure III and on Orebody A, significant intersections were obtained confirming that theory that layers were repeatedTropicana underground and the ore zones stacked as well as down-plunge projections.Sazerac regional target.
Projects
Colombia: The greenfields projects in Colombia: A total make a significant contribution to AngloGold Ashanti’s Mineral Resource with La Colosa, Quebradona and Gramalote collectively contributing 38.5Moz. Quebradona and Gramalote contribute 4.2Moz to the gold Ore Reserve. Quebradona also has a copper Ore Reserve of 3,724m were drilled3,105Mlbs. Both Quebradona and Gramalote are at various stages of feasibility study while the La Colosa project is currently under force majeure, pending the necessary environmental permits.
The Gramalote beforeproject, a joint venture between AngloGold Ashanti (50%) and B2Gold (50%), is located near the decision was made to stop drillingtowns of Providencia and San Jose del Nus within the municipality of San Roque, in the firstnorthwest of the Department of Antioquia. It is approximately 124km northeast of Medellín, the regional capital of the Antioquia Department. B2Gold became the project manager and operator from 2020.
97
Work on the feasibility study continued as planned in 2020 with drilling resuming in May 2020. An updated resource model completed by year end provided the information necessary to advance pit design and mining engineering studies. Feasibility stage metallurgical studies and process plant designs were also completed. Infrastructure design work continues. The results of the feasibility study are expected in the second quarter of 2021 which will be submitted for board approval. The decision on whether to proceed with development is expected shortly thereafter.
In December 2020, the Gramalote project received the “Sello Social de La Minería en Antioquia”, which is presented through the Ministry of Mines of Antioquia to large scale operations, recognising Gramalote for its commitment to community support.
The Quebradona deposit is situated in the Middle Cáuca region of Colombia, in the Department of Antioquia, 60km southwest
of Medellín within the Municipality of Jericó.. The project is 100% owned and managed by AngloGold Ashanti.
The feasibility study currently underway to determine the engineering activities is due to be completed early in 2021. During the second half of the year. Field-based exploration focused on rock chip sampling and soil sampling at the San Javier, Santa Barbara, and Encarnaciones targets to continue delineation2020, much of the quartz vein systems identifiedfocus was on responding to requests for additional information as part of the application process for the necessary mining and environmental licenses and related permits. Following completion of the feasibility study, the project will be submitted for board approval in those areas.the second quarter of 2021, following which will be the receipt of the environmental and mining licences to operate. The project is expected to treat 6.2Mt annually to produce 3 billion pounds of copper, 1.5Moz of gold and 21Moz of Silver over a potential 23-year life. First production is expected to start in the second half of 2025. Quebradona will be a copper mine with gold and silver as by-products. Simultaneously, work continued on incorporating all findings from peer reviews and promoting the ‘#Miningwithpurpose’ campaign, which seeks to highlight the integration of social, environmental and economic imperatives into the project and subsequent mining operations. Local stakeholder support from the Jericó community tends to be stable with the most recent survey conducted indicating that 68% of residents support the project.
The La Colosa project was formally placed on care and maintenanceis located approximately 150km west of Bogotá in the first quarterTolima Department. It is a very large porphyrystyle gold deposit discovered by the Colombia greenfields exploration team in 2006. The project is 100% owned and consequently all field activities camemanaged by AngloGold Ashanti and, it was halted and has been voluntarily suspended, since 2017, due to an end in April 2017. As partforce majeure recognised by the national mining authority, relating to environmental permits required to continue the project’s mining exploration activities.
98
4C. ORGANISATIONAL STRUCTURE
GROUP STRUCTURE
AngloGold Ashanti’s operations are divided into the following regions:
•South Africa – operations in Vaal River, West Wits and surface operations;operations (sold on 30 September 2020);
•Americas – operations in Argentina and Brazil.Brazil, and exploration projects in Colombia and the United States.
The above four regions also correspond to AngloGold Ashanti’s four business segments. The South Africa region is recognised for financial statement purposes as a discontinued operation.
Day-to-day management of the group is entrusted to AngloGold Ashanti’s executive management team, chaired by the Chief Executive Officer. See “Item 6: Directors, Senior Management and Employees”.
Support is provided to the executive management team in managing AngloGold Ashanti’s corporate activities at both the central and local levels.
SUBSIDIARIES
AngloGold Ashanti Limited has investments in principal subsidiaries and joint venture interests, see “Item 19: Exhibits – Exhibits—Exhibit 19.8 PrincipalList of AngloGold Ashanti Limited subsidiaries and operating entities”at 31 December 2020” for details.
99
4D. PROPERTY, PLANTS AND EQUIPMENT
For more information about AngloGold Ashanti’s mines, including as to the company’s mining rights and licences refer to “Item 4B: Business Overview—The regulatory environment enablingRegulatory Environment Enabling AngloGold Ashanti to mine”Mine”.
Mine, operation and business unit are used interchangeably. Percentages indicate the ownership interest held by AngloGold Ashanti. All operations are 100 percent owned unless otherwise indicated.
AngloGold Ashanti’s operating mines are all accessible by road.
AngloGold Ashanti has five mining operations within the Africa region. Mining is from both open pit and underground, with Obuasi (in Ghana) being an underground mine in a redevelopment phase, Iduapriem (in Ghana) and Siguiri (in Guinea) being open pit mines, and Kibali (in DRC) and Geita (in Tanzania) being a combination of open pit and underground mines. The Morila and Sadiola Mines were sold during 2020. The sale of the company’s interests in the Yatela mine (in Mali) to the Government of Mali, announced in 2019, is pending fulfilment or waiver of a number of conditions precedent.
DEMOCRATIC REPUBLIC OF THE CONGO (DRC)
Description
Kibali Gold Mine, located in the north-eastern part of the DRC near the international borders with Uganda and South Sudan,is the sole operation in the DRC.
DRC - Kibali
Description
The South Africa operations compriseKibali Gold Mine is a number of deep level underground mines as well as surface operation that are processing low grade stockpilesjoint venture between AngloGold Ashanti (45 percent), Barrick Gold Corporation (45 percent) and re-treating Tailings Storage Facilities. ForSociété Minière de Kilo-Moto (SOKIMO), a state-owned gold company owning the year ended 31 December 2017, it was comprised of Vaal River operations (Moab Khotsong and Kopanang), surface operations and West Wits operations (Mponeng).balance. Kibali is operated by Barrick Gold Corporation. The Vaal River operations were sold subsequent to year end.
West Gold Plant (1) | Noligwa Gold Plant (1) | Mispah Gold Plant (1) | Kopanang Gold Plant | ||||||||
| Gold plants | |||||||||||
| Capacity (000 tonnes/month) | 180 | 260 | 140 | 315 | |||||||
| Uranium plants | |||||||||||
| Capacity (000 tonnes/month) | — | 260 | — | — | |||||||
The operational area falls within the administrative territory of 35km2.Watsa in Haut Uélé province. The operation which startedcomprises both open pit and underground mining. First gold was poured in 1984, is west of neighbour Great Noligwa (now part of Moab Khotsong)September 2013 from the open pit operations. The underground mine has both a ramp and bound to the south by the Jersey Fault. Gold is the primary output, with uranium oxide as a by-product from a single underground shaft system, towith the shaft reaching a depth of 2,600740 metres.
| Mponeng Gold Plant | Savuka Gold Plant | ||||
| Capacity (000 tonnes/month) | 160 | 280 | |||
Geology
The Kibali Gold Mine is located within the Moto Greenstone Belt, which consists of Archean Kibalian volcano-sedimentary rocks and ironstone-chert horizons that have been metamorphosed to Mponeng.greenschist facies.
The known deposits of the Kibali project are hosted along a reactivated thrust plane that creates plunging lodes of mineralisation as exemplified by the KCD deposit. The majority of gold mineralisation identified to date is disseminated style, hosted within a sequence of coarse volcaniclastic and sedimentary rocks. The mineralisation is generally stratigraphically bound and associated with carbonate-silica-albite alteration with minor sulphide.
GHANA - Summary
Description
AngloGold Ashanti has two mines in Ghana: Obuasi, currently in a redevelopment phase, is an underground mine and Iduapriem is an open pit mine.
100
| Obuasi | Iduapriem | |||||||
Sulphide Treatment Plant | Alternate Ore Treatment Plant | Iduapriem Plant | ||||||
| Capacity (000 tonnes/month) | 180 | 90 | 418 | |||||
Ghana – Iduapriem
Description
Iduapriem, wholly owned by AngloGold Ashanti since September 2007, comprises the Iduapriem and Teberebie properties on a 105km2 concession. The mine, which began operations in 1992, is situated in the western region of Ghana, some 85 kilometres70km north of the coastal city of Takoradi and eight kilometresapproximately 10km southwest of the town of Tarkwa.
Iduapriem is an open-pita multiple open pit operation that currently sources ore from the Ajopa and Block 7 and 8 pits. The Iduapriem treatment plant has two semi-autogenous grinding mills and two ball mills which run in two parallel circuits, each with a semi-autogenous grinding mill and a ball mill. The carbon-in-pulp plant has a capacity of 5.1Mtpa. Power is supplied to the mine by the Volta River Authority (VRA) and its processing facilities includeGRIDCo.
Iduapriem comprises the Iduapriem, Ajopa, Ajopa South and Teberebie mining leases on a Carbon-in-pulp (CIP) plant.139.67km2 concession. The renewal of all four mining leases has been obtained and these leases are valid until February 2035.
Geology
The Iduapriem and Teberebie properties are located along the southern end of the Tarkwa basin. The mineralisation is contained in the Banket Series of quartz pebble conglomerates, breccia conglomerates and metasediments within the Proterozoic Tarkwaian System of Proterozoic age.System. The outcropping Banket Series of rocks in the mine area form prominent, arcuate ridges extending southwards from Tarkwa, westwards through Iduapriem and northwards towards Teberebie. The gold is hosted within the conglomerates.
Ghana - Obuasi
Description
Obuasi, wholly owned by AngloGold Ashanti since 2004, is currently in a care and maintenance phase and finalising a feasibility study to restart operations, it is located in the Ashanti Region of Ghana, some 320260 kilometres north-west of the capital Accra and approximately 60 kilometres south of Kumasi.
Mining operations are primarily underground, to a depth of 1.5 kilometres. Obuasi originally openedstarted production in 1897.1897, was placed on limited operations towards the end of 2014, and on care and maintenance from 2016. Some aspects of the mine continued under limited operational conditions, including the development of the underground decline. A favourable feasibility study was completed in 2017 and indicated a strong technical and economical case with an anticipated 20-year mine life. In 2018, the AngloGold Ashanti board approved a redevelopment project to establish Obuasi as a modern, efficient, mechanised, underground operation. The project commenced in late 2018 and the first gold was poured late in 2019.
Phase 1 of the project, which set up the plant to achieve a daily processing rate of 2,000t per day of ore, was completed as of 1 October 2020. The impact of COVID-19 caused some construction delays and continues to have a knock-on effect on Phase 2 of the project. Phase 2 construction was near complete as of December 2020. In the first half of 2021, Phase 2 will ramp up plant capacity to 4,000t per day of ore or 1.4Mtpa. Phase 1 and 2 works also consisted of underground development, hoisting shafts and associated infrastructure, power and water reticulation, workshops and company housing estates. Power is supplied to the minesmine by the Volta River AuthorityVRA and GRIDCo, although the company has completed additional emergency power generation capacity as part of Phase 1 and 2 construction works. In mid-2021, Phase 3 project works will move forward, concentrating on underground and surface underground infrastructure such as fans materials handling systems as part of ongoing capital works.
The Mineral Resource and Ore Reserve are covered by the Obuasi Concession comprising 152.6km2 and the transmission is doneBinsere Concession parts 1, 2 and 3 comprising 48.86km2. The mining concessions, which expire on 5 March 2054, are covered by a Development Agreement and Tax Concession Agreement with the GridCo Company.government of Ghana.
Geology
The gold deposits at Obuasi are part of a prominent gold belt of Proterozoic (Birimian) volcano-sedimentary and igneous formations which extend for a distance of approximately 300 kilometres in a north-east/south-west trend in south‑westernsouthwestern Ghana. Obuasi mineralisation is shear-zone related and there are three main structural trends hosting gold mineralisation: the Obuasi trend, the Gyabunsu trend and the Binsere trend.
Two main ore types are mined:
•quartz veins which consist mainly of quartz with free gold in association with lesser amounts of various metal sulphides such asof iron, zinc, lead and copper. The gold particles are generally coarse-grained and occasionally visible to the naked eye. This ore type is generally non-refractory; and
•sulphide ore which is characterised by the inclusion of gold in the crystal structure of a sulphide material. The gold in these ores is fine-grained and often locked in arsenopyrite. Higher gold grades tend to be associated with finer grained arsenopyrite crystals. Other prominent minerals include quartz, chlorite and sericite. Sulphide ore is generally refractory.
101
REPUBLIC OF GUINEA (GUINEA)
Description
Siguiri a multiple open-pit gold mine which opened in 1997,Gold Mine is AngloGold Ashanti’s sole operation in Guinea.
Guinea - Siguiri
Description
Siguiri Gold Mine is 85 percent owned and operated by AngloGold Ashanti and 15 percent by the Republicgovernment of Guinea. It is located in the district of Siguiri. The mineSiguiri is located approximately 520850 kilometres north-northeast of Conakry, 25 kilometres northwest of the town of Siguiri and 190220 kilometres southeastsouthwest of the Malian capital Bamako, near the Mali boarder. ConventionalMalian border.
Siguiri is currently a multi-pit fresh rock and oxide gold mining activities are performedoperation, operated by contractors in multiple open pits using conventional techniques. On surface, Siguiri’s golda contract miner. Processing of the ore is done by a hybrid carbon-in-leach (CIL) circuit processing plant treats about 981,000 tonnes per month.converted from carbon-in-pulp (CIP) in 2018. The plant is capable of treating 50% hard ore post the commissioning a new ball mill and 3 stage crushing plant in the first quarter of 2019. Power tofor the mine is self-generated.
Geology
•laterite mineralisation (CAP) which occurs as surficial aprons of colluvium or as palaeo‑channels of alluvial lateritic gravel adjacent to, and immediately above in-situ deposits; and
•in-situ quartz-vein related mineralisation hosted in meta-sediments with the better mineralisation associated with vein stockworks that occurs preferentially in the coarser, brittle siltstones and sandstones.
The mineralised rocks have been deeply weathered to below 100 metres in places to form saprolite mineralisation (oxide). With the percentage of available oxide ore decreasing, a feasibility study to considerinvestigate the exploitation of the fresh rock material was completed in December 2015. The CIL combination plant conversion project will upgrade the current plant and enable processing of a combination of oxides and fresh rock material.began in 2017. The plant throughputconversion will remain at 12Mtpa with a flexible design allowing upallow the mine to 6Mtpa freshtreat six million tonnes of hard rock to be processed. Targeted fresh rock pits include Kami, Bidini, Tubani, Sintroko, Seguelenore and Sokuno. The feasibility study has been approvedsix million tonnes of oxide ore. Construction was completed in March 2019 and the project is now concluded.
TANZANIA
Description
Geita Gold Mine is wholly owned by AngloGold Ashanti AGA has concluded successful negotiations with the Government of Guinea of the Convention de Base and access to the required areas has been received. The project is currently under construction and expected to commission towards the end of 2018.
Tanzania - Geita
Description
The Geita gold mineGold Mine is located in the Lake Victoria goldfields of the Mwanza region of Tanzania, about 120 kilometres west of Mwanza, and four kilometres away from the town of Geita.Geita and 910km from the Tanzanian commercial city of Dar es Salaam. It has been in operation since 1996.
The special mining licence (SML45/99) covers approximately 196.17km2 and expires on 26 August 2024. There are a further 120km2 of prospecting licences in the immediate vicinity to the special mining licence which do not contain any Ore Reserve. In March 2020, Geita Gold Mining Limited received the consent of the Minister of Minerals to change the mining method under its special mining license from open pit to underground method, subject to the requisite terms and conditions.
102
Geology
The terrain is Archaean in age and generally characterised by Greenschistgreenschist metamorphism, although amphibolitic metamorphism occurs in places. Ore zones are usually
associated with Banded Iron Formation (BIF) or other iron rich rocks and typically when they are in contact with intrusive rocks such as diorites. These contacts have been deformed and act as fluid pathways for the mineralising fluids. Gold mineralisation is associated with alteration that includes sulphides such as pyrite and arsenopyrite, whilst other minerals such as hematite, magnetite, quartz, calcite, dolomite, biotite and chlorite also occur.
The Kibali Gold Mine is a Joint venture between AngloGold Ashanti (45 percent), Randgold Resources Limited (45 percent) with Société Miniere de Kilo-Moto SA UNISARL (SOKIMO), a state-owned gold company owning the balance. Randgold Resources is the operator.
ARGENTINA
Description
Cerro Vanguardia, in which AngloGold Ashanti has a 92.5 percent intereststake, is our sole operation in Cerro Vanguardia withArgentina. Fomicruz, owninga state company, owns the remaining 7.5 percent. Located toThe operation is operated by AngloGold Ashanti.
Argentina - Cerro Vanguardia
Description
Cerro Vanguardia is located approximately 110 kilometres north-northwest of the northwestcoastal town of Puerto San Julian in the province of Santa Cruz,Cruz. Cerro Vanguardia consists ofis a gold-silver mine with multiple small open pits with high stripping ratios and multiple narrow-vein underground mines. Shallowmines, located at different parts of the property but mined simultaneously.
Cerro Vanguardia commenced as an open pit operation in 1998 and this was supplemented in 2010 with the start of shallow underground mining began in 2010 to access high-grade material and accounts for about 30 percent ofmaterial. To complement the mine’s production.already existing gold plant, a heap leach operation was started in 2012. The mine has been operated by AngloGold Ashanti since 1998. The orebodies comprise a series of hydrothermalepithermal vein deposits containing gold and large quantities of silver, which is mined as a by-product. Ore is processed at either theThe metallurgical plant which has a capacity of 3,450 dry tonnes per day and includes a cyanide recovery facility orfacility. Production capacity of the heap leach operationfacility, which startedwas commissioned in 2012 and processes lower-grade material, is around 1.5Mtpa at gold and silver grades of around 0.65g/t and 17g/t respectively. Eight natural gas power generators (two as a back-up) fed by a 40 kilometre long pipeline provide electricity to process the low grade material. Power foroperation.
The mining lease encompasses an area of approximately 543km2. The licence 402642/CV/97 covers the mine is self-generated but operated by an external contractor. The mine has been operated by AngloGold Ashanti since 1998.full Ore Reserve, was issued on 27 December 1996 and expires on 26 December 2036.
Geology
The oldest rocks in this part of Patagonia are metamorphics of the Precambrian-Cambrian age. These are overlain by Permian and Triassic continental clastic rocks which have been faulted into a series of horsts and grabens and are associated with both limited basaltic sills and dykes and with calc-alkaline granite and granodiorite intrusions. Thick andesite flows of Lower Jurassic age occur above these sedimentary units. A large volume of rhyolitic ignimbrites was emplaced during the Middle and Upper Jurassic age over an area of approximately 100,000 square kilometres. These volcanic rocks include the Chon Aike formation ignimbrite units that host the gold bearing veins at Cerro Vanguardia. Post-mineral units include Cretaceous and Tertiary rocks of both marine and continental origin, the Quaternary La Avenida formation, the Patagonia gravel and the overlying La Angelita basalt flows. These flows do not cover the area of the Cerro Vanguardia veins.
Gold and silver mineralisation at Cerro Vanguardia occurs within a vertical range of about 150 metres to 200 metres in a series of narrow, banded quartz veins that occupy structures within the Chon Aike ignimbrites. These veins form a typical structural pattern related to major north-south (Concepcion) and east-west (Vanguardia) shears. Two sets of veins have formed in response to this shearing.
The veins are typical of epithermal, low-temperature, adularia-sericite character and consist primarily of quartz in several forms: as massive quartz, banded chalcedonic quartz, and quartz-cemented breccias. Dark bands in the quartz are due to finely disseminated pyrite, now oxidised to limonite. The veins show sharp contacts with the surrounding ignimbrite which hosts narrow stockwork zones that are weakly mineralised and appear to have been cut by a sequence of north-east-trending faults that have southerly movement with no appreciable lateral displacement.
103
BRAZIL
Description
AngloGold Ashanti’s operations in Brazil comprise AngloGold Ashanti Córrego do Sítio Mineração (AGA Mineração) in the Quadrilátero Ferrífero, Minas Gerais state and Mineração Serra Grande (MSG) in Goiás state. All operations are wholly owned by AngloGold Ashanti. AngloGold Ashanti generates part of the power for its operations in Brazil at the Rio de Peixe hydroelectric plants and through its stake in the Igarapava consortium. The balance is purchased on the open market in long term contracts to secure supply.
Brazil - AngloGold Ashanti Córrego do Sítíotio Mineração (AGA Mineração)
S.A.
Description
AngloGold Ashanti Córrego do Sítíotio Mineração S.A. (AGA Mineração) comprises two operational units,, consists of several mining operations, namely the Cuiabá, Lamego and the Córrego do Sítío complexes.tio.
The Cuiabá complex includes the Cuiabá and Lamego mines and the Cuiabá and Queiroz plants. The Cuiabá and Lamego mines are located near Sabará, southeast and east respectively of the city of Belo Horizonte, the capital of Minas Gerais State,state, in the southeast of Brazil. The Cuiabá mine is a mix of cut-and-fill and long hole stopingstopes accessed by rampramps and a shaft. Lamego is a newnearby mine developed to mine an underground sulphide ore. The first stage of the processing of the ore from Cuiabá and Lamego mines is in the gold plant at the Cuiabá complex, where concentrate is produced. The material is then transported 15 kilometres by aerial ropeway to the Queiroz plant where milling, flotation, roasting, leaching, precipitationthe concentrate is roasted, and refining occur. Total capacitythe calcine proceeds to a carbon circuit for further refining. Sulphur gas is captured for processing through the acid plant. Approximately 230ktpa of sulphuric acid is produced as a by-product. Capacity of the complete circuit is 1.7 million tonnes per year and recoveries of 93 percent are achieved. Power for the mine is both self-generated and supplied by Cemig a state owned company.2.1Mtpa. The Cuiabá mine became operational in 1988 and the Lamego mine in 2009. Some of the older mines which are now closed have been operating since 1834.
Cuiabá is covered by a single concession granted by the Brazilian National Mining Agency (ANM), namely 000.323/1973 held by AGA Mineração, covering a total area of 3,662ha. Lamego is covered by three geographically contiguous ANM concessions granted to AGA Mineração, namely concession 830.720/1981, 831.554/1983 and 832.238/2003 covering a total area of 1,622.68ha. CdS is covered by Cemigfour ANM concessions, namely 930.556/2000; 930.181/2008; 830.129/1982 and 833.472/2003 covering a state owned company.total of 5,461.07ha. According to Brazilian mining laws, expiry of claims, licenses, and other tenure rights coincide with the depletion of Ore Reserves, cessation of mining operations and legally required post-operations activities (e.g. mine closure), provided all annual reports have been approved by the ANM.
| Córrego do Sítío Oxide | Córrego do Sítío Sulphide | Cuiabá | Serra Grande | ||||||||
Capacity (000 tonnes/month) | 50 | 58 | 150 | 115 | |||||||
Geology
The area in which AGA Mineração is located is known as the Iron Quadrangle and is host to historic and current gold mining operations, as well as a number of open-pit limestone and iron ore operations. The geology of the Iron Quadrangle is composed of Proterozoic and Archaean volcano‑sedimentary sequences and Pre‑Cambrian granitic complexes. The host to the gold mineralisation is the volcano-sedimentary Nova Lima Group (NLG) that occurs at the base of the Rio das Velhas SuperGroupSupergroup (RDVS). The upper sequence of the RDVS is the meta-sedimentary Maquiné Group. Cuiabá mine, located at Sabara Municipality, has gold mineralisation associated with sulphides and quartz veins in Banded Ironstone Formation (BIF) and volcanic sequences. At this mine, structural control and fluids flow ascension are the most important factors for gold mineralisation with a common association betweenwith large-scale shear zones and their associated structures. Where BIF is mineralised the ore appears strongly stratiform due to the selective sulphidation of the iron rich layers. Steeply plunging shear zones tend to control the ore shoots, which commonly plunge parallel to intersections between the shears and other structures.
The controlling mineralisation structures are the apparent intersection of thrust faults with tight isoclinal folds in a ductile environment. The host rocks at Brasil MineraçãoCuiabá are BIF, Lapa Seca and mafic volcanics (principally basaltic). Mineralisation is due to the interaction of low salinity carbon dioxide rich fluids with the high-iron BIF, basalts and carbonaceous graphitic schists. Sulphide mineralisation consists of pyrrhotite and pyrite with subordinate pyritearsenopyrite and chalcopyrite; the latter tends to occur as a late-stage fracture fill and is not associated with gold mineralisation. WallrockWall rock alteration is typically carbonate, potassic and silicic.
CdS is located in the eastern part of the lower to middle greenschist facies archean Rio das Velhas greenstone belt. The CdS I, II and III gold deposits and associated targets are located in a gold trend that extends for about 14km14 kilometres in a north-easterly direction, from Grota Funda (CdS I areas)I) in the south to Jambeiro (CdS III areas)III) in the north. CDSII AreaCdSII is the north portion of the Corrego do Sítio gold trend. The main gold targets and deposits are distributed over three trends, namely the CdS trend, the Donana Trend and the Cristina Trend. At CdSI, the main orebodies are Rosalino, Cachorro Bravo, Laranjeiras and
104
Carvoaria, which are currently under-productionproducing and are the most relevant mineralisationsdeposits at Mine I. At CdSII, the main orebodies are São Bento, Pinta Bem (both BIF hosted) and Sangue de Boi (metapellitic hosted). At CdSIII, Anomalia I and II represent the best informed orebodies with the highest level of information and potential so far (For(for formal declaration purposes, CDSIIICdSIII deposits are incorporated as CDSII)CdSII). CdS mineralisation occurs in a greenstone belt geological environment, where the gold content is associated towith quartz and sulphides (mainly very fine arsenopyrite acicular crystals) in a structurally controlled corridor of approximately 16 - 20km in20 kilometres on strike length and about 500m500 metres vertical extent, developed underin a compressional tectonic settings. setting.
Brazil - Mineração Serra Grande
(S.A.)
Description
Mineração Serra Grande (MSG or Serra Grande) is located in central Brazil, in the state of Goiás, about five kilometerskilometres from the city of Crixás. Serra Grande comprisess and 420km from the Brazilian capital, Brasilia. It operates three mechanised underground mines: Mina III (which includes orebody IV), Mina Nova (which includes the Pequizão orebody) and Palmeiras - and antwo open pit mines. Three mining methods used underground are: sub-level stoping (bottom-up and top-down), room and pillar. The metallurgical plant has the capacity of 1.5Mtpa and combines CIL and gravimetric circuits. The ore is blended to feed the crushing circuit with a capacity of 3,800tpd. There are two mills in operation, and 20 leaching tanks with capacity of 4,800m3 divided between preliming and cyanidation stages. About 58% free gold is captured in the outcrop of Mina III orebodies. A gold bearing quartz vein was identified just beneath Pequizão Orebody and a new decline is being developed from Mina III (orebody IV) to access and expose this new orebody named Ingá, which contains high grade ore. One dedicated metallurgical plant treats ore from these different sources.parallel gravity circuit. The annual capacityrest of the processing circuit, which has grinding, leaching, filtration, precipitation and smelting facilities,gold is 1.3 million tonnes. The power forrecovered by the mineCIL process to form the bullion that is supplied and purchased insent to the open market.Nova Lima refinery. The mine became operational in 1989 and has been operated by AngloGold Ashanti since 1999.
Serra Grande is covered by five ANM concessions, namely 002.286/1935, 960.658/1987, 860.746/2005, 862.103/1994 and 804.366/1975 covering a total area of 6,563.51ha. According to Brazilian mining law expiry of claims, licenses, and other tenure rights coincide with the depletion of Ore Reserves, cessation of mining operations and legally required post-operations activities (eg mine closure), provided all annual reports have been approved by the ANM.
Geology
The gold ore deposits are located in the Rio Vermelho and Ribeirão das Antas Formations of the Archaean Pilar de Goia’s Group which account together for a large proportion of the Crixás Greenstone Belt in central Brazil.
The stratigraphy of the belt is dominated by basics and ultrabasics inof the lower sequences with volcano sedimentary units forming the upper successions.
The gold deposits are hosted in a sequence of schists, meta volcanics and dolomites occurring in a typical greenstone belt structural setting. Gold mineralisation is associated with massive sulphides and vein quartz material associated with carbonaceous and sericitic schists and dolomites. The oreshoots plunge to the north-west with dipping between six6 and 35 degrees. The stratigraphy is overturned and thrusted towards the east, being recognized differentwith recognised shear and thrust structures that are stacked and controlsstacked. These control the mineralisation behavingand behave as frontal and lateral ramps and horses.
The greenstone belt lithologies are surrounded by the TTG suite of Archaean tonalitic gneissgneisses and granodiorites of TTG suite.granodiorites. The metamorphic sediments are primarily composed of quartz, chlorite, sericite, carbonaceous material and garnetiferousgarnet bearing schists. The carbonates have been metamorphosed to ferroan dolomite marble with development of siderite and ankerite veining in the surrounding wallrock, usually associated with quartz veins. The basalts are relatively unaltered but do show pronounced stretching with elongation of pillow structures being evident.
The Crixás greenstone belt comprises a series of Archaean to Palaeoproterozoic metavulcanics,metavolcanics, metasediments and basement granitoids stacked within a series of north to north-east transported thrust sheet. Thrusting (D1) was accompanied by significant F1 folding/foliation development and progressive alteration in a brittle-ductile regime. D1 thrusting was developed with irregular thrust ramp geometry, in part controlled by concealed early basin faults. The main Crixás orebodies are adjacent to a major north‑north‑northwest structural corridor and upjuxtaposed to the main fault ramp/corner toand become dispersed to the east and north in zones of foreland thrust flats. Fluid alteration also diminishedAlteration diminishes to the west away from the main fault corner. A series of concealed east-west to northwest‑northwest‑southeast basement block faults may have provided secondary fluid migration, and development of early anti‑anti‑formal warps in the thrust sheets; these structures probably define the quasi‑quasi‑regular spacing of significant mineralisation within the belt. The D1 thrust stack was gently folded by non‑non‑cylindrical folds. Gold mineralising fluids probably migrated during this event, with similar south‑south‑south‑south‑west to north‑north‑north‑north‑east migration, and focusing on bedding slip during folding. Gold mineralisation became minordecreases and disperseddisperses to the north and east along the formal thrust flat zone. Concentrations of gold alongwithin the case of quartz vein may be due to the damming of fluids migrating upward along layering.
COLOMBIA
Description
Colombia has two advanced Greenfields Projects with Ore Reserve declaration, Quebradona and Gramalote, and a third Greenfield project, La Colosa, voluntarily suspended since 2017 due to force majeure recognized by the Colombia national mining authority, relating to environmental permits required to continue the exploration activities.
105
Colombia - Gramalote
Description
The Gramalote Projectproject is a Joint Venturejoint arrangement between AGA (51 percent and manager)AngloGold Ashanti and B2Gold (49 percent)Corp (B2Gold). Since the beginning of 2020, B2Gold is responsible for the management of the Gramalote joint operation and AngloGold Ashanti and B2Gold now each hold 50 percent of the attributable shares in Gramalote Limited.
The property is located near the town of Providencia and San Jose del Nus within the municipality of San Roque in the, northwest of the Department of Antioquia, Colombia. It is approximately 230 km northwest of the Colombian capital of Bogota and 124 kmkilometres northeast of Medellin which is the regional capital of the Antioquia Department. The region encompassing Gramalote has a long history of artisanal gold mining. Gramalote itself has had small scale artisanal mining for several decades prior to exploration work and mineral discovery by AngloGold Ashanti. Drilling
Development of the Gramalote project commenced in 2006. In 2010, AngloGold Ashanti became the operator with a 51 percent share. Sufficientscoping study in 2009. Several studies followed, leading to submission of a prefeasibility study in late 2013, which did not meet investment hurdles. From 2014 to 2017 intensive work was completedundertaken by all technical disciplines to enable a Pre-Feasibility studyidentify ways to be completedimprove the project economics. The main changes were an improved orebody model, grade streaming to increase the feed grade in late 2013. This was then updated on the back of growthearly years and early treatment of the Mineral Resource, significant mineral processing opportunities identified byoxide ore that overlies the project team and ongoing capital and operating cost optimisation. Themain sulphide resource. An enhanced Pre-Feasibilityprefeasibility study was completed in September 2017, which supported the reporting of a maiden Ore Reserve. During 2020, for the feasibility study, an updated resource model was completed, providing information necessary for the pit design. Also in 2020 the process plant designs and approved by the mining engineering and metallurgical studies were completed; the Infrastructure design work continues in 2021. The results of the feasibility study are expected in the second quarter of 2021 which will be submitted for board approval.
Gramalote comprises one integrated exploitation concession and one exploration concession which was granted in November 2017.June 2019. The first, the 14292-concession totalling 8,720.71ha, expires on 3 April 2043 and contains the Gramalote and Monjas deposits. The second is the 4894 concession which covers 2,292.81ha and hosts the Trinidad deposit. In 2016, the project received its environmental and construction permits to operate for the life of mine. According to Colombian mining law the exploration phase begins as soon as the concession contract is registered in the National Mining Registry. The total period for the concession contract (exploration, installation and construction, and exploitation) is 30 years, which may be renewed for an additional 20-year period. Under Colombian mining law, producing mines are subject to a federal royalty of four percent on 80 percent of the value of gold and silver production. Thus the Gramalote net royalty is 3.2 percent on gold and silver production.
Geology
The Gramalote deposit is located in the northern portion of the Central Cordillera of Colombia. The terrain is mainly composed of a metamorphic basement complex and the Antioquia Batholith. The terrane of the Cajamarca-Valdivia basement consists of metamorphic rocks, volcanic rocks, oceanic ophiolites and intrusive rocks. The Antioquia Batholith, which is of Upper Cretaceous age, covers an area of 7221 km2km2 and constitutes the core of the Central Cordillera. About 92 percent of this intrusive corresponds to (normal phase) tonalite and granodiorite and eight percent to two subordinate types of rocks - granodiorite to quartz-monzonite and gabbro. From a structural point of view, the Antioquia Batholith has a history of uprising complex and lasting.uplift. Major lineaments affect the batholith, especially in its eastern sector where traces ofthey trend WNWwest northwest varying to NW, recordednorthwest, where they show rotation and sinistral shear sinistral movement. Westward dextral transpression dominates along the Romeral Fault System.
Gramalote is an intrusive-hosted structurally controlled stockwork gold and silver deposit. Mineralisation is controlled by north-east/south-west trending shear zones and north-northwest tonorth-northwest/ south-southeast trending shear extensional zones affecting the tonalites and granodiorites of the Antioquia Batholith. Gold mineralisation is associated with three overprinting and texture destructive alteration assemblages includingnamely: potassic, quartz-sericite and sericite carbonate. Within these alteration zones, anomalous gold mineralisation is associated with three specific types of stockwork quartz veining.vein stockworks. These include quartz veinlets with fine-grained pyrite, quartz-carbonate veinlets and quartz veinlets with granular pyrite.
Colombia - Quebradona
Description
The Quebradona project is situated in the Middle Cauca region of Colombia, in the Department of Antioquia, 60 kilometres south-west of Medellin. The Quebradona project is 100% owned and managed by AngloGold Ashanti, after B2Gold was diluted in 2019 and became entitled to receive a royalty which will be bound by the Terms of the Royalty Agreement. The project has completed a conceptual study in 2016, as well as a prefeasibility study in 2019, which supported the reporting of a maiden Ore Reserve.
The feasibility study currently underway is expected to be completed in early 2021. Following the completion of the feasibility study, the project will be submitted for board approval. If approved, the project will require receipt of environmental and mining licenses to start implementation.
Five main targets have been identified, namely Nuevo Chaquiro, Aurora, Tenedor, Isabela and La Sola. Nuevo Chaquiro is the most advanced of the targets. Nuevo Chaquiro, a significant copper-gold porphyry, is one of five known porphyry centres on the property and has been the focus of exploration activities since the beginning of 2011 with more than 75 kilometres of drilling completed. Nuevo Chaquiro was the sole deposit considered in the feasibility study.
106
Quebradona comprises one tenement (5881) which is the result of the integration of the five original tenements (5869, 6318, 6359, 7579 and 5881). Integrated tenement 5881 was issued on the 9 December 2016 and totals 7,593ha and is valid until May 2037.
Quebradona will be a copper mine with gold and silver as by-products. The project is close to existing highway, state and rural roads, and HV/MV power infrastructure. The planned mining method is sub level caving. The planned underground infrastructure consists of an adit to access the orebody and number of internal vertical ore passes that gravity feeds to the main ore transfer level. The material will be transferred to the main internal crusher by load and haul dump vehicles. Crushed material will then be transferred downhill to surface via a six kilometre conveyor, in a dedicated adit to a coarse ore stockpile. The project is expected to treat 6.2Mt annually to produce three billion pounds of copper and 1.5Moz of gold and 21Moz of Silver over a potential 23-year life.
Geology
The host rock geology of Nuevo Chaquiro comprises a volcaniclastic sequence of Miocene age (ash, tuffs, agglomerates and andesites) intruded by small dykes of diorite and quartz diorite, also of Miocene age. The intrusions are by various pulses of diorites with the primary intrusive being a fine to medium grained quartz diorite. Most of the intrusives do not outcrop. These intrusives are categorised into pre-mineral, early, intra-mineral and late, according to cross cutting relations, locality and copper-gold values. The developed alteration follows a well zoned porphyry type alteration system ranging from a high temperature, potassium silicate central zone (biotite, magnetite, chalcopyrite, and molybdenite), which trends into an overlying sericitic alteration zone (muscovite, chlorite, quartz, pyrite,+-tourmaline) surrounded by more distal propylitic alteration (chlorite, epidote, illite, carbonate). There is also an inner core of calcic-potassic alteration featuring biotite, actinolite, epidote, and anhydrite with lower copper, gold and molybdenum values. The mineralised zone is characterised by fine stock works, disseminations and veinlets of quartz, magnetite, pyrite, chalcopyrite and molybdenite.
AUSTRALIA
Description
The Australia Region operates two gold mines in Western Australia, Sunrise Dam, which is wholly owned, and Tropicana, a JV with IGO Limited (IGO). AngloGold has a 70% stake and is manager, and IGO holds 30%. Open pit and underground mining occur at both operations.
Australia - Sunrise Dam
Description
Sunrise Dam, which is wholly owned, is located 220 kilometres northeast of Kalgoorlie and 55 kilometres south of Laverton in Western Australia. Underground mining, which is conducted by a contract mining company, is the primary source of ore, with supplementary mill feed in 2020 provided by stockpiles. Development of a satellite open pit mine at Golden Delicious began in the fourth quarter of 2020 and from the third quarter of 2021 open pit ore will fully replace low-grade stockpiled ore in mill feed.
Open pit production began in 1997 and the pit was completed at a final depth of 500 metres below surface in 2014. Underground mining commenced in 2003 with a number of different mining methods being applied, depending on the style of mineralisation and grade of the geological domain. By 2014, the mine was wholly an underground mining operation with mill feed supplemented by stockpiles. The underground mining infrastructure has been upgraded with additional power feed installed in 2017 and a major ventilation fan upgrade completed in 2018.
Sunrise Dam operates within two mining leases covering over 7,800ha, which are in good standing with the expiry dates in 2038. All Mineral Resource, Ore Reserves and mine infrastructure are hosted within lease M39/1116 while lease M39/1117 hosts water extraction infrastructure used to supply the operation with water.
Mining is carried out by underground mining contractors and productivity improvements over the past few years has seen total underground tonnages mined reach a steady state of around 2.8Mtpa. This has been possible by the use of bulk mechanised sub-level open stoping using stabilising pillars and waste backfill where possible. Ore is treated in a conventional gravity and CIL process plant equipped with a fine grind and flotation circuit which was commissioned in the second half of 2018. The plant throughput rate for Sunrise dam is 4.1Mtpa. Power at Sunrise Dam is self-generated, and the mine uses natural gas supplied via an APA Operations (Pty) Limited pipeline. Pre-stripping of the Golden Delicious satellite pit, 12 km from the Sunrise Dam processing plant, began in the fourth quarter of 2020. Ore production from Golden Delicious is scheduled to being in the second quarter of 2021.
Geology
Gold ore at Sunrise Dam is structurally and lithologically controlled within gently dipping high strain shear zones and steeply dipping brittle-ductile low strain shear zones. Host rocks include andesitic volcanic rocks, volcanogenic sediments and magnetic shales.
107
Australia - Tropicana
Description
Tropicana, a joint venture between AngloGold Ashanti (70 percent and operator) and IGO Limited (30 percent), is located 200 kilometres east of Sunrise Dam and 330 kilometres east-northeast of Kalgoorlie Boulder, Western Australia. Open pit mining began during 2012 with first gold production occurring in September 2013. The operation features a large scale, modern processing plant which uses conventional carbon-in-leach technology and includes high-pressure grinding rolls for energy-efficient comminution. Open pit mining activities are carried out by a contract mining company and the plant is owner operated. The Boston Shaker underground mine at Tropicana started commercial production in September 2020.
Tropicana has security of tenure for all current exploration licenses and the mining lease that covers its future Ore Reserve. This lease is M39/1096 and is valid from 11 March 2015 to 10 March 2036 covering a total area of 27,228ha.
All surface infrastructure facilities are in place and operational. The processing plant and TSF are operating within design specifications. The infrastructure includes, but is not limited to, a dedicated gas and diesel power station, water supply, processing plant, mine, dewatering infrastructure, TSF, workshops, camp facilities and airstrips. Tropicana utilises a three-stage crushing circuit, inclusive of energy-efficient high-pressure grinding roll technology, followed by conventional ball mill grinding and a carbon-in-leach gold leach circuit. Throughput in 2020 was 8.83Mtpa. Power is supplied to the mine by an on-site gas and diesel power station, with natural gas supplied via an APA Operations (Pty) Limited pipeline.
Geology
Gold mineralisation at Tropicana occurs in high metamorphic grade gneissic rocks, which dip gently to the south east. Mineralisation is structurally controlled and occurs within a preferred host unit within the gneissic package. Post mineralisation faulting has separated the once continuous ore zone, with open pits developed on each of the fault bounded blocks.
108
ORE RESERVE
The combined Proven and Probable gold Ore Reserve of the group amounted to 49.629.5 million ounces (Moz) as at 31 December 2017.2020. The Probable copper Ore Reserve of the group amounted to 3,105 million pounds (Mlb) as at 31 December 2020 (amounts provided in Ore Reserve are attributable.)
Ore Reserve estimates are reported in accordance with the requirements of the SEC’s Industry Guide 7. Accordingly, as of the date of reporting, all Ore Reserve is planned to be mined out under the life-of-mine plans within the period of AngloGold Ashanti’s existing rights to mine, or within the renewal periods of AngloGold Ashanti’s rights to mine. In addition, as of the date of reporting, all Ore Reserve is covered by required mining permits or there is a high probability that these approvals will be secured.
AngloGold Ashanti has standard procedures for the estimation of Ore Reserve. These standard procedures are performed by experienced technical personnel at the mining operations and reviewed by regional and corporate Competent Persons.
In the case of open-pit mines the procedure is as follows: revenue and costs are calculated for each mining block within a three-dimensional model of the ore body using estimated values for gold price, operating costs and metallurgical recoveries. An optimization process is then applied to determine the combination of blocks within the model that make a positive contribution under these estimations. Block selection is within a shell whose limits are defined by the planned slope angles of the pit. Within this process, a cut-off grade is applied which determines the ore blocks to be treated and included in the Ore Reserve. These blocks are scheduled with consideration being given to practical mining constraints and limitations. Scheduled ore blocks that are classified as Proven or Probable constitute the Ore Reserve.
The gold price used for determining the 20172020 and 20162019 Ore Reserve are outlined in the following table:
| 2020 | 2020 | 2019 | Units | ||||||||||||||||||||
| (3 year average) | (Ore Reserve) | (3 year average) | |||||||||||||||||||||
| Ore Reserve Gold Price | 1,479 | 1,200 | 1,307 | $ per ounce | |||||||||||||||||||
| 2017 | 2017 | 2016 | Units | |||||||
(3 year average) | (Ore Reserve) | (3 year average) | ||||||||
| Ore Reserve Gold Price | 1,222 | 1,100 | 1,225 | US$ per ounce | ||||||
The Ore Reserve determined from the planning process was then tested for economic viability at the three-year historical average goldcopper price shown in the above tableused for determining the SEC compliant2020 and 2019 Ore Reserve. Reserve are outlined in the following table:
| 2020 | 2020 | 2019 | Units | ||||||||||||||||||||||||||||||||
| (3 year average) | (Ore Reserve) | (3 year average) | |||||||||||||||||||||||||||||||||
| Ore Reserve Copper Price | 2.82 | 2.65 | 2.83 | $ per pound | |||||||||||||||||||||||||||||||
The SEC test indicates the vast majorityall of the SAMREC/JORCSAMREC Ore Reserve, apart from the CVSA operation, is economically viableeconomic and meetmeets the requirements of the SEC. ThereforeThe CVSA SEC Reserve is 0.20Moz less than the SEC and SAMREC/JORCSAMREC Ore Reserve are all but identical except for Kopanang and AGA Mineraçãodue to the hyperinflation of the ARS rate where the three yearthree-year average exchange rate caused small changes.of 49.46 is much lower than the AGA planning exchange rate (based on the last year's rates only) of 99.69.
AngloGold Ashanti selects a conservative Ore Reserve price relative to its peers, in line with AngloGold Ashanti’s strategy of including a margin in the mine planning process. The resultant SEC compliant Proven and Probable Ore Reserveplan is shown in the following pages.then valued at a higher business planning price.
In Australia and South Africa, AngloGold Ashanti is legally required to publicly report Ore Reserve and Mineral Resource according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2012 edition) and the South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code, 2016 edition). The SEC’s Industry Guide 7 does not recognizerecognise Mineral Resource. Accordingly, AngloGold Ashanti does not report estimates of Mineral Resource in this annual report on Form 20-F.
109
Gold:
The AngloGold Ashanti Ore Reserve decreasedreduced from 50.0Moz43.8Moz in December 20162019 to 49.6Moz29.5Moz in December 2017.2020. This gross annual decrease of 0.4Moz14.3Moz includes depletion of 4.3Moz. The balance3.4Moz, and disposal of 3.9Mozassets in the South African region and Sadiola of 16.7Moz. This is offset partly by additions in Ore Reserve, results fromdue to exploration and modelling changes of 4.0Moz4.5Moz, changes in economic assumptions of 1.0Moz and other factors of 0.7Moz, whilst changes in economic assumptions resulted in a 0.8Moz reduction. 0.3Moz.The Ore Reserve has beenwas estimated using athe AngloGold Ashanti gold price of US$1,100/1,200/oz (2016:(2019: US$1,100/oz).
The principal changes in AngloGold Ashanti’s Ore Reserve as at 31 December 2017,2020, compared with those published as at 31 December 2016,2019, are as follows:
| ORE RESERVE - GOLD | Moz | |||||||||
| Ore Reserve as at 31 December | 43.8 | |||||||||
| Mponeng | ||||||||||
| Mine Waste Solutions | (1.9) | |||||||||
| (1.6) | ||||||||||
| Sub Total | 27 | |||||||||
| Depletions | (3.4) | |||||||||
| Sub Total | 23.6 | |||||||||
| Additions | Due To | |||||||||
| Obuasi | Updated Mineral Resource | |||||||||
1.8 | ||||||||||
1.4 | ||||||||||
| Exploration success. | 0.5 | |||||||||
| Iduapriem | Increased Ore Reserve price and operational improvements. | 0.5 | ||||||||
| AGA Mineração | Exploration and increased Ore Reserve price countered by geological model changes at VQZ and SER. | 0.4 | ||||||||
| Siguiri | Exploration success. | 0.4 | ||||||||
| Serra Grande | New exchange rate, gold price and cost reduction. | 0.4 | ||||||||
| CVSA | Exploration, methodology, price and cost countered by geotechnical changes. | 0.2 | ||||||||
| Sunrise Dam | Exploration success. | 0.3 | ||||||||
| Other | Additions less than 0.3Moz. | |||||||||
| Sub Total | 29.6 | |||||||||
| Reductions | ||||||||||
| Reductions less than 0.3Moz. | ||||||||||
| Ore Reserve as at 31 December | 29.5 | |||||||||
Copper:
The AngloGold Ashanti Ore Reserve increased from 1.39Mt (3,068Mlb) in December 2019 to 1.41Mt (3,105Mlb) in December 2020. This gross annual increase of 0.02Mt due to optimisation of the production levels. The Ore Reserve was estimated at the AngloGold Ashanti copper price of US$2.65/lb (2019: US$2.65/lb).
| ORE RESERVE - COPPER | Mt | Mlb | ||||||||||||
| Ore Reserve as at 31 December 2019 | 1.39 | 3,068 | ||||||||||||
| Additions | Due To | |||||||||||||
| Quebradona | Results of the Mineral Resource estimation and mine plan update for the Feasibility study. | 0.02 | 37 | |||||||||||
| Ore Reserve as at 31 December 2020 | 1.41 | 3,105 | ||||||||||||
AngloGold Ashanti strives to actively create value by growing its major asset - the Ore Reserve. This drive is based on a well-defined brownfields and greenfields exploration programme, innovation in both geological modelingmodelling and mine planning and optimization of its asset portfolio.
The Ore Reserve estimates in this document include the Ore Reserve below the current infrastructure of underground mines. These include mines in South Africa, Ghana, Australia, Brazil and Brazil.Colombia.
110
Sale of assets
AngloGold Ashanti announced on 19 October 2017 that it was sellingsold various assets in the Vaal River area of its South African region. The sales processes as at 31st December 2017 were still underway and therefore do not affect the stated Ore Reserve for 2017. However, with theMali during 2020. On conclusion of the sales and after depletions for that period of 2020 the final Mineral Resource and Ore Reserve at the endtime of February 2018, the following reductions in sale are shown below:
South Africa:
•Mponeng: Mineral Resource 45.65Moz
Ore Reserve will take place:10.94Moz
•Surface Operations: Mineral Resource 5.11Moz
•Sadiola: Mineral Resource 3.32Moz
Ore Reserve 4.87Moz1.58Moz
By-products
Several by-products arewill be recovered as a result of processing of the exploitation of gold Ore Reserve and copper Ore Reserve. The by-productsThese include 89.16 million pounds of uranium oxide from the South African operations, 0.41 million tonstonnes of sulfursulphur from Brazil, and 21.81 million ounces23.89Moz of silver from Argentina.Argentina and 26.19Moz of silver from Colombia. Molybdenum, at present, is not planned for recovery. The Quebradona process plant will be designed to treat approximately 6.2Mtpa underground ore to produce copper concentrate over a 23-year mine life with provision of space for a molybdenum plant in the future.
External reviews of Mineral Resource and Ore Reserve Statement
Due to the followingtravel restrictions around COVID-19 the internal reviews could not take place on site but were instead conducted as desk top reviews. The same restriction meant that the external audits could not take place either. With the scope of work for these audits requiring a site visit it was not possible to conduct them remotely. The internal policy requirement of auditing all operations were subject toon an external review in line with the policy that each operation/ project will be reviewed by an independent third party on average of once every three years:years will be met by an increased number of audits in 2021.
Numerous internal Mineral Resource and Ore Reserve at Mponeng
process reviews were completed by suitably qualified Competent Persons from within AngloGold Ashanti and no significant deficiencies were identified. The Mineral Resource and Ore Reserve at Tropicana
are underpinned by appropriate Mineral Resource Management processes and Ore Reserve at Gramalote
Competent Persons
The information in this report relating to theExploration Results, Mineral Resources and Ore ReserveReserves is based on information compiled by or under the supervision of the Competent Persons as defined in the JORC or SAMREC Codes.Code. All Competent Persons are employed by AngloGold Ashanti, unless stated otherwise,except for Kibali (which uses Barrick Competent Persons), and have sufficient experience relevant to the style of mineralizationmineralisation and type of deposit under consideration and to the activity which they are undertaking. The Competent Persons consent to the inclusion of Ore Reserve information in this report, in the form and context in which it appears. Details of the Competent Persons per operation are given in the Mineral Resource and Ore Reserve Report 2017, which is available on the corporate website. The legal tenure of each operation and project has been verified to the satisfaction of the accountable Competent Person and all Ore Reserve hasReserves have been confirmed to be covered by the required mining permits or there isexists a high probabilityrealistic expectation that these permits will be issued.
Accordingly, the Chairman of the Mineral Resource and Ore Reserve Steering Committee, VA Chamberlain, MSc (Mining Engineering), BSc (Hons) (Geology), MGSSA, FAusIMM, assumes responsibility for the Mineral Resource and Ore Reserve processes for AngloGold Ashanti and is satisfied that the Competent Persons have fulfilled their responsibilities. VA Chamberlain has 33 years’ experience in exploration and mining and is employed full-time by AngloGold Ashanti and can be contacted at the following address: 76 Rahima Moosa Street, Newtown, 2001, South Africa.
A detailed breakdown of Mineral Resource and Ore Reserve and backup detail iswill be provided on the AngloGold Ashanti website (www.anglogoldashanti.com)(www.anglogoldashanti.com) and www.aga-reports.com.www.aga-reports.com.
111
| Ore Reserve: Imperial | At 31 December 2017 | ||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | ||||||||||||||||||||||
Tons(5) | Grade | Gold Content | Tons (5) | Grade | Gold Content | Recovery Factor | Grade | (10) | |||||||||||||||||
| (million) | (oz/ton) | (Moz) | (million) | (oz/ton) | (Moz) | percent | (oz/ton) | ||||||||||||||||||
| South Africa | |||||||||||||||||||||||||
Vaal River (6) | |||||||||||||||||||||||||
| Kopanang | 1.10 | 0.158 | 0.17 | 1.04 | 0.156 | 0.16 | 95.6-95.7 | (4 | ) | 0.278 | |||||||||||||||
Moab Khotsong (2) | 2.22 | 0.278 | 0.62 | 17.21 | 0.247 | 4.25 | 93.9-97.1 | (4 | ) | 0.126-0.181 | (4) | ||||||||||||||
| West Wits | |||||||||||||||||||||||||
Mponeng (2) | 1.66 | 0.253 | 0.42 | 41.01 | 0.286 | 11.74 | 96.5-98.1 | (4 | ) | 0.122-0.199 | (4) | ||||||||||||||
TauTona (12) | 0.00 | 0.00 | 0.00 | 0.00 | 0.000 | 0.00 | |||||||||||||||||||
| Surface | |||||||||||||||||||||||||
Surface sources (6) (9) | 139.60 | 0.006 | 0.87 | 671.80 | 0.008 | 5.24 | 42.0-88.0 | (4 | ) | 0.006-0.013 | (4) | ||||||||||||||
| Continental Africa | |||||||||||||||||||||||||
| Democratic Republic of the Congo | |||||||||||||||||||||||||
Kibali (45 percent) (3) (11) | 9.42 | 0.119 | 1.12 | 23.35 | 0.119 | 2.79 | 84.5-88.9 | (4 | ) | 0.045-0.073 | (4) | ||||||||||||||
| Ghana | |||||||||||||||||||||||||
| Iduapriem | 3.25 | 0.023 | 0.07 | 42.23 | 0.042 | 1.78 | 92.0-95.6 | (4 | ) | 0.016-0.026 | (4) | ||||||||||||||
Obuasi (2) | — | — | — | 22.35 | 0.262 | 5.86 | 87.0 | 0.120-0.152 | (4) | ||||||||||||||||
| Guinea | |||||||||||||||||||||||||
Siguiri (85 percent) (3) | 26.67 | 0.019 | 0.51 | 69.64 | 0.025 | 1.74 | 88.0-93.0 | (4 | ) | 0.016-0.022 | (4) | ||||||||||||||
| Mali | |||||||||||||||||||||||||
Morila (40 percent) (3) (11) | — | — | — | 4.68 | 0.016 | 0.08 | 57.0-91.0 | (4 | ) | 0.014 | |||||||||||||||
Sadiola (41 percent) (3) | 0.11 | 0.063 | 0.01 | 31.23 | 0.054 | 1.69 | 75.0-94.0 | (4 | ) | 0.015-0.025 | (4) | ||||||||||||||
| Tanzania | |||||||||||||||||||||||||
| Geita | — | — | — | 9.42 | 0.133 | 1.25 | 76.0-92.0 | (4 | ) | 0.41-0.088 | (4) | ||||||||||||||
| Australasia | |||||||||||||||||||||||||
| Australia | �� | ||||||||||||||||||||||||
| Sunrise Dam | 12.00 | 0.029 | 0.34 | 9.08 | 0.094 | 0.85 | 85.0-86.0 | (4 | ) | 0.022-0.079 | (4) | ||||||||||||||
Tropicana (70 percent) (3) | 13.40 | 0.038 | 0.50 | 37.98 | 0.062 | 2.35 | 90.0 | 0.020 | |||||||||||||||||
| Americas | |||||||||||||||||||||||||
| Argentina | |||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (3) (7) | 5.09 | 0.049 | 0.25 | 6.12 | 0.108 | 0.66 | 64.4-95.7 | (4 | ) | 0.013-0.146 | (4) | ||||||||||||||
| Brazil | |||||||||||||||||||||||||
AGA Mineraçáo (2) (8) | 3.34 | 0.132 | 0.44 | 13.24 | 0.131 | 1.73 | 67.8-93.8 | (4 | ) | 0.018-0.106 | (4) | ||||||||||||||
Serra Grande (2) | 1.86 | 0.081 | 0.15 | 1.95 | 0.092 | 0.18 | 86.5-95.3 | (4 | ) | 0.019-0.053 | (4) | ||||||||||||||
| Colombia | |||||||||||||||||||||||||
Gramalote (51 percent) (3) | — | — | — | 70.23 | 0.025 | 1.76 | 83.9-95.0 | (4 | ) | 0.005-0.006 | (4) | ||||||||||||||
| Total | 219.72 | 0.025 | 5.48 | 1,072.57 | 0.041 | 44.11 | |||||||||||||||||||
| Ore Reserve: Imperial | At 31 December 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tons(5) | Grade | Gold Content | Tons (5) | Grade | Gold Content | Metallurgical Recovery Factor | Cut-off Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | (oz/ton) | (Moz) | (million) | (oz/ton) | (Moz) | percent | (oz/ton) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent) (3) (10) | 10.06 | 0.127 | 1.27 | 27.87 | 0.107 | 2.97 | 75.9-90.9 | (4) | 0.016-0.061 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Iduapriem | 8.45 | 0.034 | 0.29 | 42.11 | 0.038 | 1.62 | 93.0-95.9 | (4) | 0.016-0.026 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Obuasi (2) | — | — | — | 34.76 | 0.251 | 8.73 | 87.0 | 0.111-0.152 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent) (3) | 19.34 | 0.018 | 0.35 | 61.72 | 0.025 | 1.54 | 88.0 | (4) | 0.016-0.028 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent) (3)(8) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geita | — | — | — | 30.91 | 0.076 | 2.34 | 79.1-92.7 | (4) | 0.032-0.097 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng (8) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surface | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface Operations (8) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam (2) | 12.21 | 0.044 | 0.54 | 9.55 | 0.064 | 0.61 | 81.9-92.0 | (4) | 0.022-0.047 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent) (2)(3) | 16.91 | 0.033 | 0.55 | 21.00 | 0.064 | 1.33 | 88.1-90.0 | (4) | 0.020-0.079 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(6) | 3.74 | 0.061 | 0.23 | 7.92 | 0.066 | 0.53 | 66.9-95.2 | (4) | 0.008-0.197 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brazil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineração (2) (7) | 3.46 | 0.108 | 0.37 | 12.04 | 0.113 | 1.36 | 43.7-94.3 | (4) | 0.008-0.125 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande (2) | 2.98 | 0.080 | 0.24 | 4.73 | 0.082 | 0.39 | 89.5-96.4 | (4) | 0.016-0.043 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gramalote (50 percent) (3) | — | — | — | 68.85 | 0.025 | 1.72 | 83.9-95.0 | (4) | 0.005-0.006 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2)(6) | — | — | — | 124.25 | 0.020 | 2.49 | 58.6 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 77.15 | 0.050 | 3.84 | 445.71 | 0.058 | 25.63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Copper
| Ore Reserve: Imperial | At 31 December 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tons(5) | Grade | Copper Content | Tons (5) | Grade | Copper Content | Metallurgical Recovery Factor | Cut-off Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | percent | (Mlbs) | (million) | percent | (Mlbs) | percent | ($/t) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2)(6) | — | — | — | 124.25 | 1.25 | 3,105 | 93.6 | 30 | (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | — | 124.25 | 1.25 | 3,105 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
(2)Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows.
(3)Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.
(4)Recovery factor and cut-off grade vary according to ore type.
(5)Tons refers to a short ton, which is equivalent to 2000 pounds avoirdupois.
(6)The Ore Reserve contains 23.89 million ounces of silver for Cerro Vanguardia and 26.19 million ounces for Quebradona to be recovered as a by-product.
(7)The Ore Reserve contains 0.45 million tons of sulphur to be recovered as a by-product.
(8) No Ore Reserve is declared in 2020. Operation sold during 2020.
(9)In-situ cut-off grade.
(10)Ore Reserve is estimated by Competent Persons employed by Barrick Gold (Holdings) Limited.
(11)Copper ore cut-off Net Smelter Return (NSR).
Rounding may result in computational differences.
112
The 20172020 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
| Mine | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||||
| Moab Khotsong | 14.47 | 0.24 | 3.48 | |||||
| Mponeng | 31.04 | 0.27 | 8.50 | |||||
| Obuasi | 1.87 | 0.60 | 1.13 | |||||
| AGA Mineração | 3.89 | 0.16 | 0.62 | |||||
| Serra Grande | 1.33 | 0.10 | 0.14 | |||||
| Total | 52.59 | 0.26 | 13.86 | |||||
| Ore Reserve below infrastructure: Imperial | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||||||||||||||||||||||
| Obuasi | 2.98 | 0.580 | 1.73 | |||||||||||||||||||||||
| Sunrise Dam | 1.13 | 0.090 | 0.10 | |||||||||||||||||||||||
| Tropicana | 0.88 | 0.100 | 0.09 | |||||||||||||||||||||||
| AGA Mineração | 5.45 | 0.140 | 0.78 | |||||||||||||||||||||||
| Serra Grande | 5.41 | 0.080 | 0.44 | |||||||||||||||||||||||
| Quebradona | 124.25 | 0.020 | 2.49 | |||||||||||||||||||||||
| Total | 140.10 | 0.040 | 5.64 | |||||||||||||||||||||||
Copper
| Ore Reserve below infrastructure: Imperial | Tons (millions) | Grade (%) | Copper Content (million pounds) | |||||||||||||||||||||||
| Quebradona | 124.25 | 1.25 | 3,105 | |||||||||||||||||||||||
| Total | 124.25 | 1.25 | 3,105 | |||||||||||||||||||||||
The Ore Reserve has been determined based on completed economic studies.
113
| Ore Reserve: Imperial | At 31 December 2016 | |||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | |||||||||||||||||||||||
Tons(5) | Grade | Gold Content | Tons (5) | Grade | Gold Content | Recovery Factor | Grade | (10) | ||||||||||||||||||
| (million) | (oz/ton) | (Moz) | (million) | (oz/ton) | (Moz) | percent | (oz/ton) | |||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||
Vaal River (6) | ||||||||||||||||||||||||||
| Kopanang | 1.79 | 0.156 | 0.28 | 1.10 | 0.163 | 0.18 | 95.6-95.7 | (4 | ) | 0.278 | ||||||||||||||||
Moab Khotsong (2) | 2.93 | 0.249 | 0.73 | 15.50 | 0.276 | 4.27 | 95.6-96.4 | (4 | ) | 0.119-0.170 | (4) | |||||||||||||||
| West Wits | ||||||||||||||||||||||||||
Mponeng (2) | 1.34 | 0.278 | 0.37 | 41.47 | 0.292 | 12.11 | 97.4-98.0 | (4 | ) | 0.122-0.208 | (4) | |||||||||||||||
| TauTona | 0.55 | 0.323 | 0.18 | 2.28 | 0.243 | 0.55 | 96.7-97.0 | (4 | ) | 0.219-0.239 | (4) | |||||||||||||||
| Surface | ||||||||||||||||||||||||||
Surface sources (6) (9) | 146.21 | 0.006 | 0.92 | 698.63 | 0.008 | 5.48 | 42.0-92.0 | (4 | ) | 0.007-0.011 | (4) | |||||||||||||||
| Continental Africa | ||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||
Kibali (45 percent) (3) (11) | 2.13 | 0.055 | 0.12 | 32.98 | 0.122 | 4.01 | 84.5-88.9 | (4 | ) | 0.044-0.070 | (4) | |||||||||||||||
| Ghana | ||||||||||||||||||||||||||
| Iduapriem | 3.21 | 0.022 | 0.07 | 46.69 | 0.038 | 1.77 | 92.0-96.0 | (4 | ) | 0.015-0.026 | (4) | |||||||||||||||
Obuasi (2) | — | — | — | 23.49 | 0.234 | 5.49 | 89.0 | 0.128-0.152 | (4) | |||||||||||||||||
| Guinea | ||||||||||||||||||||||||||
Siguiri (85 percent) (3) | 28.11 | 0.019 | 0.53 | 76.07 | 0.025 | 1.92 | 88.0-93.0 | (4 | ) | 0.015-0.022 | (4) | |||||||||||||||
| Mali | ||||||||||||||||||||||||||
Morila (40 percent) (3) (11) | — | — | — | 6.81 | 0.016 | 0.11 | 57.0 | 0.014 | ||||||||||||||||||
Sadiola (41 percent) (3) | 0.01 | 0.069 | — | 34.85 | 0.052 | 1.80 | 75.0-94.0 | (4 | ) | 0.013-0.023 | (4) | |||||||||||||||
| Tanzania | ||||||||||||||||||||||||||
| Geita | — | — | — | 18.09 | 0.109 | 1.97 | 89.3-92.7 | (4 | ) | 0.028-0.131 | (4) | |||||||||||||||
| Australasia | ||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Sunrise Dam | 12.87 | 0.029 | 0.37 | 11.64 | 0.083 | 0.97 | 80.9-85.0 | (4 | ) | 0.018-0.036 | (4) | |||||||||||||||
Tropicana (70 percent) (3) | 12.10 | 0.043 | 0.52 | 34.27 | 0.062 | 2.14 | 90.0 | 0.020 | ||||||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (3) (7) | 6.58 | 0.043 | 0.28 | 4.70 | 0.141 | 0.66 | 61.8-95.9 | (4 | ) | 0.013-0.146 | (4) | |||||||||||||||
| Brazil | ||||||||||||||||||||||||||
AGA Mineraçáo (2) (8) | 3.88 | 0.140 | 0.55 | 7.68 | 0.152 | 1.16 | 70.0-93.3 | (4 | ) | 0.017-0.105 | (4) | |||||||||||||||
Serra Grande (2) | 2.66 | 0.073 | 0.19 | 3.53 | 0.080 | 0.28 | 88.5-94.7 | (4 | ) | 0.071 | ||||||||||||||||
| Total | 224.36 | 0.023 | 5.12 | 1,059.73 | 0.042 | 44.87 | ||||||||||||||||||||
Gold
| Ore Reserve: Imperial | At 31 December 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tons(5) | Grade | Gold Content | Tons (5) | Grade | Gold Content | Metallurgical Recovery Factor | Cut-off Grade | (9) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | (oz/ton) | (Moz) | (million) | (oz/ton) | (Moz) | percent | (oz/ton) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Democratic Republic of the Congo | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent) (3) (10) | 10.25 | 0.120 | 1.23 | 23.72 | 0.123 | 2.93 | 84.5-89.8 | (4) | 0.044-0.070 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ghana | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Iduapriem | 3.74 | 0.024 | 0.09 | 42.86 | 0.040 | 1.71 | 93.0-95.9 | (4) | 0.025-0.028 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obuasi (2) | — | — | — | 26.74 | 0.266 | 7.12 | 87.0 | 0.120-0.152 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guinea | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent) (3) | 20.07 | 0.019 | 0.37 | 59.66 | 0.023 | 1.39 | 88.0-93.0 | (4) | 0.015-0.022 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mali | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Morila (40 percent) (3) (10) (11) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent) (3) | — | — | — | 27.00 | 0.059 | 1.58 | 75.0-94.0 | (4) | 0.015-0.023 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tanzania | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geita | — | — | — | 14.81 | 0.102 | 1.51 | 77.8-92.7 | (4) | 0.036-0.115 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Africa | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Wits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng (2) | 1.14 | 0.235 | 0.27 | 38.75 | 0.280 | 10.83 | 97.1-97.9 | (4) | 0.167-0.239 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surface | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface sources (8) | 70.51 | 0.007 | 0.49 | 504.74 | 0.008 | 3.88 | 44.0-90.9 | (4) | 0.006-0.010 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam (2) | 12.29 | 0.040 | 0.49 | 7.32 | 0.083 | 0.61 | 84.5-85.0 | (4) | 0.020-0.046 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent) (2)(3) | 18.16 | 0.030 | 0.54 | 25.35 | 0.062 | 1.58 | 89.9-90.0 | (4) | 0.020-0.078 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Argentina | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent)(3)(6) | 4.52 | 0.037 | 0.17 | 6.50 | 0.081 | 0.52 | 65.8-95.8 | (4) | 0.010-0.159 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brazil | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineração (2) (7) | 2.48 | 0.123 | 0.31 | 10.68 | 0.136 | 1.46 | 53.0-94.3 | (4) | 0.010-0.155 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande (2) | 1.71 | 0.083 | 0.14 | 2.81 | 0.095 | 0.27 | 92.4-95.7 | (4) | 0.027-0.052 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gramalote (51 percent) (3) | — | — | — | 70.23 | 0.025 | 1.76 | 83.9-95.0 | (4) | 0.005-0.006 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (94.876 percent) (2)(3)(6) | — | — | — | 122.62 | 0.021 | 2.53 | 60.0 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 144.87 | 0.028 | 4.10 | 983.80 | 0.040 | 39.68 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Copper
| Ore Reserve: Imperial | At 31 December 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tons(5) | Grade | Copper Content | Tons (5) | Grade | Copper Content | Metallurgical Recovery Factor | Cut-off Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | percent | (Mlbs) | (million) | percent | (Mlbs) | percent | ($/t) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2)(6) | — | — | — | 122.62 | 1.25 | 3,068 | 95.8 | 25-45 | (12) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | — | 122.62 | 1.25 | 3,068 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
(2)Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows.
(3)Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.
(4)Recovery factor and cut-off grade vary according to ore type.
(5)Tons refers to a short ton, which is equivalent to 2000 pounds avoirdupois.
(6)The Ore Reserve contains 18.76 million ounces of silver for Cerro Vanguardia and 25.95 million ounces for Quebradona to be recovered as a by-product.
(7)The Ore Reserve contains 0.43 million tons of sulphur to be recovered as a by-product.
(8)Includes Mine Waste Solutions (MWS).
(9)In-situ cut-off grade.
(10)Ore Reserve is estimated by Competent Persons employed by Barrick Gold (Holdings) Limited.
(11)No Ore Reserve is declared, Morila is only treating tailings and the Ore Reserve has been written off.
(12)Copper ore cut-off Net Smelter Return (NSR).
Rounding may result in computational differences.
114
The 20162019 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
| Mine | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||||
| Moab Khotsong | 11.89 | 0.28 | 3.32 | |||||
| Mponeng | 30.35 | 0.28 | 8.56 | |||||
| Obuasi | 1.92 | 0.67 | 1.29 | |||||
| AGA Mineração | 1.97 | 0.18 | 0.35 | |||||
| Serra Grande | 1.18 | 0.09 | 0.10 | |||||
| Total | 47.31 | 0.29 | 13.63 | |||||
| Ore Reserve below infrastructure: Imperial | Tons (millions) | Grade (ounces/ton) | Gold Content (million ounces) | |||||||||||||||||||||||
| Mponeng | 30.67 | 0.270 | 8.17 | |||||||||||||||||||||||
| Obuasi | 3.08 | 0.560 | 1.72 | |||||||||||||||||||||||
| Sunrise Dam | 1.11 | 0.140 | 0.16 | |||||||||||||||||||||||
| Tropicana | 2.09 | 0.110 | 0.22 | |||||||||||||||||||||||
| AGA Mineração | 6.34 | 0.140 | 0.92 | |||||||||||||||||||||||
| Serra Grande | 2.18 | 0.100 | 0.22 | |||||||||||||||||||||||
| Quebradona | 122.62 | 0.020 | 2.53 | |||||||||||||||||||||||
| Total | 168.10 | 0.080 | 13.93 | |||||||||||||||||||||||
Copper
| Ore Reserve below infrastructure: Imperial | Tons (millions) | Grade (%) | Copper Content (million pounds) | |||||||||||||||||||||||
| Quebradona | 122.62 | 1.25 | 3,068 | |||||||||||||||||||||||
| Total | 122.62 | 1.25 | 3,068 | |||||||||||||||||||||||
The Ore Reserve has been determined based on completed economic studies.
115
| Ore Reserve: Metric | At 31 December 2017 | |||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | |||||||||||||||||||
Tonnes(5) | Grade | Gold Content | Tonnes (5) | Grade | Gold Content | Recovery Factor | Grade | (10) | ||||||||||||||
| (million) | (g/t) | (tonnes) | (million) | (g/t) | tonnes | percent | (g/t) | |||||||||||||||
| South Africa | ||||||||||||||||||||||
Vaal River (6) | ||||||||||||||||||||||
| Kopanang | 1.00 | 5.420 | 5.40 | 0.94 | 5.37 | 5.04 | 95.6-95.7 | (4 | ) | 9.52 | ||||||||||||
Moab Khotsong (2) | 2.02 | 9.550 | 19.26 | 15.62 | 8.47 | 132.31 | 93.9-97.1 | (4 | ) | 4.31-6.21 | (4) | |||||||||||
| West Wits | ||||||||||||||||||||||
Mponeng (2) | 1.50 | 8.670 | 13.03 | 37.21 | 9.82 | 365.25 | 96.5-98.1 | (4 | ) | 4.17-6.82 | (4) | |||||||||||
TauTona (12) | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||||
| Surface | ||||||||||||||||||||||
Surface sources (5) (9) | 126.64 | 0.21 | 27.11 | 609.45 | 0.27 | 162.99 | 42.0-88.0 | (4 | ) | 0.20-0.43 | (4) | |||||||||||
| Continental Africa | ||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||
Kibali (45 percent) (3) (11) | 8.54 | 4.07 | 34.78 | 21.18 | 4.10 | 86.76 | 84.5-88.9 | (4 | ) | 1.53-2.50 | (4) | |||||||||||
| Ghana | ||||||||||||||||||||||
| Iduapriem | 2.95 | 0.77 | 2.29 | 38.31 | 1.44 | 55.35 | 92.0-95.6 | (4 | ) | 0.55-0.90 | (4) | |||||||||||
Obuasi (2) | — | 0.00 | 0.00 | 20.28 | 9.00 | 182.40 | 87.0 | 4.10-5.20 | (4) | |||||||||||||
| Guinea | ||||||||||||||||||||||
Siguiri (85 percent) (3) | 24.19 | 0.65 | 15.78 | 63.18 | 0.85 | 53.97 | 88.0-93.0 | (4 | ) | 0.55-0.75 | (4) | |||||||||||
| Mali | ||||||||||||||||||||||
Morila (40 percent) (3) (11) | — | 0.00 | 0.00 | 4.25 | 0.56 | 2.38 | 57.0-91.0 | (4 | ) | 0.49 | ||||||||||||
Sadiola (41 percent) (3) | 0.10 | 2.14 | 0.22 | 28.33 | 1.86 | 52.59 | 75.0-94.0 | (4 | ) | 0.51-0.87 | (4) | |||||||||||
| Tanzania | ||||||||||||||||||||||
| Geita | — | 0.00 | 0.00 | 8.54 | 4.55 | 38.86 | 76.0-92.0 | (4 | ) | 1.40-3.02 | (4) | |||||||||||
| Australasia | ||||||||||||||||||||||
| Australia | ||||||||||||||||||||||
| Sunrise Dam | 10.88 | 0.98 | 10.64 | 8.24 | 3.22 | 26.50 | 85.0-86.0 | (4 | ) | 0.75-2.71 | (4) | |||||||||||
Tropicana (70 percent) (3) | 12.16 | 1.29 | 15.70 | 34.46 | 2.12 | 73.10 | 90.0 | 0.70 | ||||||||||||||
| Americas | ||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (3) (7) | 4.62 | 1.69 | 7.81 | 5.55 | 3.69 | 20.50 | 64.4-95.7 | (4 | ) | 0.45-5.00 | (4) | |||||||||||
| Brazil | ||||||||||||||||||||||
AGA Mineraçáo (2) (8) | 3.03 | 4.53 | 13.73 | 12.01 | 4.48 | 53.76 | 67.8-93.8 | (4 | ) | 0.61-3.63 | (4) | |||||||||||
Serra Grande (2) | 1.69 | 2.77 | 4.68 | 1.77 | 3.16 | 5.60 | 86.5-95.3 | (4 | ) | 0.66-1.80 | (4) | |||||||||||
| Colombia | ||||||||||||||||||||||
Gramalote (51 percent) (3) | — | 0.00 | 0.00 | 63.71 | 0.86 | 54.67 | 83.9-95.0 | (4 | ) | 0.16-0.22 | (4) | |||||||||||
| Total | 199.32 | 0.86 | 170.43 | 973.02 | 1.41 | 1,372.04 | ||||||||||||||||
Gold
| Ore Reserve: Metric | At 31 December 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tonnes(5) | Grade | Gold Content | Tonnes (5) | Grade | Gold Content | Metallurgical Recovery Factor | Cut-off Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | (g/t) | (tonnes) | (million) | (g/t) | tonnes | percent | (g/t) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent) (3) (10) | 9.12 | 4.34 | 39.58 | 25.28 | 3.66 | 92.51 | 75.9-90.9 | (4) | 0.54-2.09 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Iduapriem | 7.67 | 1.16 | 8.93 | 38.20 | 1.32 | 50.38 | 93.0-95.9 | (4) | 0.55-0.90 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obuasi (2) | — | — | — | 31.53 | 8.62 | 271.63 | 87.0 | 3.82-5.20 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent) (3) | 17.55 | 0.62 | 10.94 | 55.99 | 0.86 | 47.90 | 88.0 | 0.55-0.95 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent) (3) (8) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geita | — | — | — | 28.04 | 2.59 | 72.68 | 79.1-92.7 | (4) | 1.10-3.32 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng (8) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surface | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface sources (8) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam (2) | 11.08 | 1.52 | 16.88 | 8.67 | 2.18 | 18.89 | 81.9-92.0 | (4) | 0.75-1.60 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent) (2) (3) | 15.34 | 1.12 | 17.16 | 19.05 | 2.18 | 41.50 | 88.1-90.0 | (4) | 0.70-2.70 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (3) (6) | 3.39 | 2.10 | 7.13 | 7.18 | 2.28 | 16.34 | 66.9-95.2 | (4) | 0.27-6.76 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brazil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineraçáo (2) (7) | 3.13 | 3.69 | 11.58 | 10.92 | 3.88 | 42.35 | 49.7-94.3 | (4) | 0.29-4.29 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande (2) | 2.71 | 2.75 | 7.45 | 4.29 | 2.81 | 12.04 | 89.5-96.4 | (4) | 0.54-1.46 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gramalote (50 percent) (3) | — | — | — | 62.46 | 0.86 | 53.60 | 83.9-95.0 | (4) | 0.16-0.22 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2) (6) | — | — | — | 112.72 | 0.69 | 77.31 | 58.6 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 69.99 | 1.71 | 119.65 | 404.33 | 1.97 | 797.13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Copper
| Ore Reserve: Metric | At 31 December 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tonnes(5) | Grade | Copper Content | Tonnes (5) | Grade | Copper Content | Metallurgical Recovery Factor | Cut-off Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | percent | (tonnes million) | (million) | percent | (tonnes million) | percent | ($/t) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2)(6) | — | — | — | 112.72 | 1.25 | 1.41 | 93.6 | 30 | (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | — | 112.72 | 1.25 | 1.41 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
(2)Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows.
(3)Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.
(4)Recovery factor and cut-off grade vary according to ore type.
(5)Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.
(6)The Ore Reserve contains 743 tonnes of silver for Cerro Vanguardia and 814 tonnes for Quebradona to be recovered as a by-product.
(7)The Ore Reserve contains 0.41 million tonnes of sulphur to be recovered as a by-product.
(8) No Ore Reserve is declared in 2020. Operation sold during 2020.
(9)In-situ cut-off grade.
(10)Ore Reserve is estimated by Competent Persons employed by Barrick Gold (Holdings) Limited.
(11) Copper ore cut-off Net Smelter Return (NSR)
Rounding may result in computational differencesdifferences.
116
The 20172020 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
| Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||||
| Moab Khotsong | 13.12 | 8.24 | 108.14 | |||||
| Mponeng | 28.16 | 9.38 | 264.25 | |||||
| Obuasi | 1.70 | 20.68 | 35.15 | |||||
| AGA Mineração | 3.53 | 5.44 | 19.20 | |||||
| Serra Grande | 1.20 | 3.52 | 4.24 | |||||
| Total | 47.71 | 9.03 | 430.97 | |||||
| Ore Reserve below infrastructure: Metric | Tons (millions) | Grade (grams/tonne) | Gold Content (tonnes) | ||||||||||||||||||||||||||||||||
| Obuasi | 2.71 | 19.87 | 53.76 | ||||||||||||||||||||||||||||||||
| Sunrise Dam | 1.02 | 3.17 | 3.24 | ||||||||||||||||||||||||||||||||
| Tropicana | 0.80 | 3.59 | 2.86 | ||||||||||||||||||||||||||||||||
| AGA Mineração | 4.94 | 4.94 | 24.41 | ||||||||||||||||||||||||||||||||
| Serra Grande | 4.91 | 2.80 | 13.75 | ||||||||||||||||||||||||||||||||
| Quebradona | 112.72 | 0.69 | 77.31 | ||||||||||||||||||||||||||||||||
| Total | 127.10 | 1.38 | 175.33 | ||||||||||||||||||||||||||||||||
Copper
| Ore Reserve below infrastructure: Metric | Tons (millions) | Grade (%) | Copper Content (million tonnes) | |||||||||||||||||||||||||||||
| Quebradona | 112.72 | 1.25 | 1.41 | |||||||||||||||||||||||||||||
| Total | 112.72 | 1.25 | 1.41 | |||||||||||||||||||||||||||||
The Ore Reserve has been determined based on completed economic studies.
117
| Ore Reserve: Metric | At 31 December 2016 | |||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | |||||||||||||||||||||||
Tonnes(6) | Grade | Gold Content | Tonnes(6) | Grade | Gold Content | Recovery Factor | Grade (10) | |||||||||||||||||||
| (million) | (g/t) | (tonnes) | (million) | (g/t) | (tonnes) | percent | (g/t) | |||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||
Vaal River (5) | ||||||||||||||||||||||||||
| Kopanang | 1.62 | 5.360 | 8.70 | 1.00 | 5.570 | 5.55 | 95.6-95.7 | (4) | 9.520 | |||||||||||||||||
Moab Khotsong (2) | 2.66 | 8.550 | 22.73 | 14.06 | 9.450 | 132.81 | 95.6-96.4 | (4) | 4.07-5.83 | (4) | ||||||||||||||||
| West Wits | ||||||||||||||||||||||||||
Mponeng (2) | 1.21 | 9.540 | 11.57 | 37.62 | 10.010 | 376.64 | 97.4-98.0 | (4) | 4.17-7.14 | (4) | ||||||||||||||||
| TauTona | 0.50 | 11.070 | 5.57 | 2.06 | 8.320 | 17.17 | 96.7-97.0 | (4) | 7.50-8.18 | (4) | ||||||||||||||||
| Surface | ||||||||||||||||||||||||||
Surface sources (5) (9) | 132.64 | 0.220 | 28.58 | 633.79 | 0.270 | 170.42 | 42.0-92.0 | (4) | 0.24-0.38 | (4) | ||||||||||||||||
| Continental Africa | ||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||
Kibali (45 percent) (3) (11) | 1.94 | 1.900 | 3.67 | 29.92 | 4.170 | 124.73 | 84.5-88.9 | (4) | 1.52-2.40 | (4) | ||||||||||||||||
| Ghana | ||||||||||||||||||||||||||
| Iduapriem | 2.91 | 0.760 | 2.20 | 42.34 | 1.300 | 55.11 | 92.0-96.0 | (4) | 0.50-0.90 | (4) | ||||||||||||||||
Obuasi (2) | — | — | — | 21.31 | 8.010 | 170.74 | 89.0 | 4.40-5.20 | (4) | |||||||||||||||||
| Guinea | ||||||||||||||||||||||||||
Siguiri (85 percent) (3) | 25.50 | 0.640 | 16.42 | 69.01 | 0.860 | 59.57 | 88.0-93.0 | (4) | 0.53-0.75 | (4) | ||||||||||||||||
| Mali | ||||||||||||||||||||||||||
Morila (40 percent) (3) (11) | — | — | — | 6.81 | 0.550 | 3.37 | 57.0 | 0.470 | ||||||||||||||||||
Sadiola (41 percent) (3) | 0.01 | 2.370 | 0.02 | 31.62 | 1.770 | 55.90 | 75.0-94.0 | (4) | 0.45-0.80 | (4) | ||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||
| Geita | — | — | — | 16.41 | 3.730 | 61.17 | 89.3-92.7 | (4) | 0.95-4.50 | (4) | ||||||||||||||||
| Australasia | ||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Sunrise Dam | 11.67 | 1.000 | 11.65 | 10.56 | 2.860 | 30.15 | 80.9-85.0 | (4) | 0.60-1.23 | (4) | ||||||||||||||||
| Tropicana (70 percent) (3) | 10.98 | 1.480 | 16.22 | 31.09 | 2.140 | 66.48 | 90.0 | 0.700 | ||||||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (3) (7) | 5.97 | 1.470 | 8.78 | 4.26 | 4.850 | 20.65 | 61.8-95.9 | (4) | 0.46-5.00 | (4) | ||||||||||||||||
| Brazil | ||||||||||||||||||||||||||
AGA Mineraçáo (2) (8) | 3.52 | 4.810 | 16.96 | 6.97 | 5.200 | 36.21 | 70.0-93.3 | (4) | 0.58-3.61 | (4) | ||||||||||||||||
Serra Grande (2) | 2.41 | 2.510 | 6.05 | 3.20 | 2.750 | 8.81 | 88.5-94.7 | (4) | 2.450 | |||||||||||||||||
| Total | 203.54 | 0.78 | 159.11 | 961.37 | 1.45 | 1,395.49 | ||||||||||||||||||||
Gold
| Ore Reserve: Metric | At 31 December 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Metallurgical | Cut-off | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tonnes(5) | Grade | Gold Content | Tonnes (5) | Grade | Gold Content | Recovery Factor | Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | (g/t) | (tonnes) | (million) | (g/t) | tonnes | percent | (g/t) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kibali (45 percent) (3) (10) | 9.29 | 4.13 | 38.36 | 21.52 | 4.23 | 90.99 | 84.5-89.8 | (4) | 1.50-2.40 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Iduapriem | 3.40 | 0.84 | 2.85 | 38.88 | 1.36 | 53.05 | 93.0-95.9 | (4) | 0.85-0.95 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Obuasi (2) | — | — | — | 24.26 | 9.13 | 221.47 | 87.0 | 4.10-5.20 | (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Siguiri (85 percent) (3) | 18.20 | 0.63 | 11.55 | 54.12 | 0.80 | 43.27 | 88.0-93.0 | (4) | 0.50-0.75 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mali | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Morila (40 percent) (3) (10) (11) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sadiola (41 percent) (3) | — | — | — | 24.50 | 2.01 | 49.23 | 75.0-94.0 | (4) | 0.51-0.78 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Geita | — | — | — | 13.44 | 3.50 | 47.03 | 77.8-92.7 | (4) | 1.25-3.95 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West Wits | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mponeng (2) | 1.03 | 8.05 | 8.31 | 35.16 | 9.59 | 337.00 | 97.1-97.9 | (4) | 5.72-8.18 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Surface | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Surface sources (8) | 63.97 | 0.24 | 15.18 | 457.89 | 0.26 | 120.83 | 44.0-90.9 | (4) | 0.20-0.34 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunrise Dam (2) | 11.15 | 1.38 | 15.39 | 6.64 | 2.84 | 18.88 | 84.5-85.0 | (4) | 0.70-1.56 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tropicana (70 percent) (2) (3) | 16.48 | 1.02 | 16.89 | 22.99 | 2.13 | 49.07 | 89.9-90.0 | (4) | 0.70-2.69 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (3) (6) | 4.10 | 1.26 | 5.17 | 5.90 | 2.77 | 16.33 | 65.8-95.8 | (4) | 0.33-5.46 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brazil | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGA Mineraçáo (2) (7) | 2.25 | 4.23 | 9.50 | 9.69 | 4.68 | 45.33 | 53.0-94.3 | (4) | 0.33-5.31 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Serra Grande (2) | 1.55 | 2.83 | 4.40 | 2.55 | 3.27 | 8.32 | 92.4-95.7 | (4) | 0.92-1.77 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gramalote (51 percent) (3) | — | — | — | 63.71 | 0.86 | 54.67 | 83.9-95.0 | (4) | 0.16-0.22 | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2) (6) | — | — | — | 111.24 | 0.71 | 78.60 | 60.0 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 131.42 | 0.97 | 127.60 | 892.49 | 1.38 | 1,234.08 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Copper
| Ore Reserve: Metric | At 31 December 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proven Ore Reserve (1) (2) | Probable Ore Reserve (1) (2) | Cut-off | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Tonnes(5) | Grade | Copper Content | Tonnes (5) | Grade | Copper Content | Recovery Factor | Grade | (9) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (million) | percent | (tonnes million) | (million) | percent | (tonnes million) | percent | ($/t) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quebradona (2) (6) | — | — | — | 111.24 | 1.25 | 1.39 | 95.80 | 25-45 | (12) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | — | — | — | 111.24 | 1.25 | 1.39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Ore Reserve includes marginally economic and diluting materials delivered for treatment and allow for losses that may occur during mining.
(2)Proven and/or Probable Ore Reserve includes Ore Reserve below infrastructure. See table that follows.
(3)Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.
(4)Recovery factor and cut-off grade vary according to ore type.
(5)Tonnes refers to a metric tonne which is equivalent to 1000 kilograms.
(6)The Ore Reserve contains 583 tonnes of silver for Cerro Vanguardia and 807 tonnes for Quebradona to be recovered as a by-product.
(7)The Ore Reserve contains 0.39 million tonnes of sulphur to be recovered as a by-product.
(8)Includes Mine Waste Solutions (MWS).
(9)In-situ cut-off grade.
(10)Ore Reserve is estimated by Competent Persons employed by Barrick Gold (Holdings) Limited.
(11) No Ore Reserve is declared as the Ore Reserve has been written off.
(12) Copper ore cut-off Net Smelter Return (NSR).
Rounding may result in computational differences.differences
118
The 20162019 Proven and Probable Ore Reserve includes Ore Reserve below infrastructure in the case of the following underground mines currently in production:
| Mine | Tonnes (millions) | Grade (grams/tonne) | Gold Content (tonnes) | |||||
| Moab Khotsong | 10.79 | 9.59 | 103.41 | |||||
| Mponeng | 27.53 | 9.67 | 266.21 | |||||
| Obuasi | 1.74 | 23.11 | 40.26 | |||||
| AGA Mineração | 1.79 | 6.03 | 10.79 | |||||
| Serra Grande | 1.07 | 3.03 | 3.24 | |||||
| Total | 42.92 | 9.88 | 423.90 | |||||
| Ore Reserve below infrastructure: Metric | Tons (millions) | Grade (grams/tonne) | Gold Content (tonnes) | ||||||||||||||||||||||||||||||||
| Mponeng | 27.83 | 9.13 | 254.02 | ||||||||||||||||||||||||||||||||
| Obuasi | 2.80 | 19.14 | 53.54 | ||||||||||||||||||||||||||||||||
| Sunrise Dam | 1.01 | 4.92 | 4.97 | ||||||||||||||||||||||||||||||||
| Tropicana | 1.89 | 3.60 | 6.82 | ||||||||||||||||||||||||||||||||
| AGA Mineração | 5.75 | 4.96 | 28.49 | ||||||||||||||||||||||||||||||||
| Serra Grande | 1.98 | 3.40 | 6.73 | ||||||||||||||||||||||||||||||||
| Quebradona | 111.24 | 0.71 | 78.60 | ||||||||||||||||||||||||||||||||
| Total | 152.50 | 2.84 | 433.17 | ||||||||||||||||||||||||||||||||
Copper
| Ore Reserve below infrastructure: Metric | Tons (millions) | Grade (%) | Copper Content (million tonnes) | |||||||||||||||||||||||||||||
| Quebradona | 111.24 | 1.25 | 1.39 | |||||||||||||||||||||||||||||
| Total | 111.24 | 1.25 | 1.39 | |||||||||||||||||||||||||||||
The Ore Reserve has been determined based on completed economic studies.
119
Stockpiles: Imperial
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
| Ore Reserve: Imperial | At 31 December 2020 | |||||||||||||||||||||||||
| Stockpiles | Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | |||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||
Kibali (45 percent) (1) | 0.72 | 0.044 | 0.03 | |||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||
| Iduapriem | 17.54 | 0.022 | 0.38 | |||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||
Siguiri (85 percent) (1) (2) | 54.57 | 0.017 | 0.91 | |||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||
| Geita | 8.94 | 0.046 | 0.41 | |||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Sunrise Dam | 8.05 | 0.027 | 0.22 | |||||||||||||||||||||||
Tropicana (70 percent) (1) | 13.89 | 0.025 | 0.35 | |||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (1) | 7.00 | 0.012 | 0.08 | |||||||||||||||||||||||
| Stockpiles | At 31 December 2017 | |||||||
| Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | ||||||
| South Africa | ||||||||
Surface sources (2) | 811.40 | 0.008 | 6.11 | |||||
| Continental Africa | ||||||||
| Ghana | ||||||||
| Iduapriem | 12.88 | 0.021 | 0.27 | |||||
| Guinea | ||||||||
Siguiri (85 percent) (1) (3) | 61.89 | 0.017 | 1.06 | |||||
| Mali | ||||||||
Morila (40 percent) (1) | 4.55 | 0.016 | 0.07 | |||||
Sadiola (41 percent) (1) | 5.14 | 0.037 | 0.19 | |||||
| Tanzania | ||||||||
| Geita | 2.79 | 0.041 | 0.12 | |||||
| Australasia | ||||||||
| Australia | ||||||||
| Sunrise Dam | 12.00 | 0.029 | 0.34 | |||||
Tropicana (70 percent) (1) | 8.19 | 0.027 | 0.22 | |||||
| Americas | ||||||||
| Argentina | ||||||||
Cerro Vanguardia (92.5 percent) (1) | 7.05 | 0.019 | 0.13 | |||||
| Brazil | ||||||||
| Serra Grande | 0.03 | 0.050 | 0.00 | |||||
(1) Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. (2) Spent heap included in Ore Reserve. |
Rounding may result in computational differences.
120
Stockpiles: Imperial
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
| Ore Reserve: Imperial | At 31 December 2019 | |||||||||||||||||||||||||
| Stockpiles | Tons (million) | Grade (ounces/ ton) | Gold content (million ounces) | |||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||
Kibali (45 percent) (1) | 1.09 | 0.050 | 0.05 | |||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||
| Iduapriem | 16.41 | 0.021 | 0.35 | |||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||
Siguiri (85 percent) (1) (3) | 55.29 | 0.017 | 0.93 | |||||||||||||||||||||||
| Mali | ||||||||||||||||||||||||||
Sadiola (41 percent) (1) | 1.46 | 0.068 | 0.10 | |||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||
| Geita | 4.50 | 0.046 | 0.20 | |||||||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||
Surface sources (2) | 575.26 | 0.008 | 4.37 | |||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Sunrise Dam | 9.40 | 0.028 | 0.26 | |||||||||||||||||||||||
Tropicana (70 percent) (1) | 16.97 | 0.028 | 0.47 | |||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (1) | 6.58 | 0.013 | 0.08 | |||||||||||||||||||||||
| Brazil | ||||||||||||||||||||||||||
| Serra Grande | 0.01 | 0.058 | 0.00 | |||||||||||||||||||||||
| Stockpiles | At 31 December 2016 | |||||||
| Tons (million) | Grade (ounces/ton) | Gold content (million ounces) | ||||||
| South Africa | ||||||||
Surface sources (2) | 844.84 | 0.008 | 6.40 | |||||
| Continental Africa | ||||||||
| Ghana | ||||||||
| Iduapriem | 12.83 | 0.021 | 0.27 | |||||
| Guinea | ||||||||
Siguiri (85 percent) (1) (3) | 63.33 | 0.017 | 1.08 | |||||
| Mali | ||||||||
Morila (40 percent) (1) | 6.81 | 0.016 | 0.11 | |||||
Sadiola (41 percent) (1) | 5.80 | 0.033 | 0.19 | |||||
| Tanzania | ||||||||
| Geita | 4.35 | 0.039 | 0.17 | |||||
| Australasia | ||||||||
| Australia | ||||||||
| Sunrise Dam | 12.87 | 0.029 | 0.37 | |||||
Tropicana (70 percent) (1) | 7.09 | 0.027 | 0.19 | |||||
| Americas | ||||||||
| Argentina | ||||||||
Cerro Vanguardia (92.5 percent) (1) | 7.24 | 0.019 | 0.14 | |||||
| Brazil | ||||||||
| Serra Grande | 0.07 | 0.058 | 0.00 | |||||
(1) Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown. (2) Centralised operations treating material on surface that was previously generated by several underground operations, includes tailings material. (3) Spent heap included in Ore Reserve. |
Rounding may result in computational differences.
121
Stockpiles: Metric
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
| Ore Reserve: Metric | At 31 December 2020 | |||||||||||||||||||||||||
| Stockpiles | Tonnes (million) | Grade (grams/ tonne) | Gold content (tonnes) | |||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||
Kibali (45 percent) (1) | 0.65 | 1.50 | 0.98 | |||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||
| Iduapriem | 15.91 | 0.75 | 11.96 | |||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||
Siguiri (85 percent) (1) (2) | 49.50 | 0.57 | 28.24 | |||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||
| Geita | 8.11 | 1.57 | 12.76 | |||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Sunrise Dam | 7.31 | 0.93 | 6.81 | |||||||||||||||||||||||
Tropicana (70 percent) (1) | 12.60 | 0.87 | 11.01 | |||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (1) | 6.35 | 0.41 | 2.61 | |||||||||||||||||||||||
| Stockpiles | At 31 December 2017 | |||||||
| Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | ||||||
| South Africa | ||||||||
Surface sources (2) | 736.09 | 0.26 | 190.10 | |||||
| Continental Africa | ||||||||
| Ghana | ||||||||
| Iduapriem | 11.68 | 0.72 | 8.46 | |||||
| Guinea | ||||||||
Siguiri (85 percent) (1) (3) | 56.15 | 0.59 | 33.07 | |||||
| Mali | ||||||||
Morila (40 percent) (1) | 4.13 | 0.54 | 2.22 | |||||
Sadiola (41 percent) (1) | 4.66 | 1.27 | 5.93 | |||||
| Tanzania | ||||||||
| Geita | 2.53 | 1.42 | 3.59 | |||||
| Australasia | ||||||||
| Australia | ||||||||
| Sunrise Dam | 10.88 | 0.98 | 10.64 | |||||
Tropicana (70 percent) (1) | 7.43 | 0.94 | 6.97 | |||||
| Americas | ||||||||
| Argentina | ||||||||
Cerro Vanguardia (92.5 percent) (1) | 6.40 | 0.64 | 4.09 | |||||
| Brazil | ||||||||
| Serra Grande | 0.02 | 1.70 | 0.04 | |||||
(1) Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.
(2) Spent heap included in Ore Reserve. |
Rounding may result in computational differences.
122
Stockpiles: Metric
Stockpiles are previously mined ore scheduled for future process plant feed. The Proven and Probable Ore Reserve includes the following stockpile material:
| Ore Reserve: Metric | At 31 December 2019 | |||||||||||||||||||||||||
| Stockpiles | Tonnes (million) | Grade (grams /tonne) | Gold content (tonnes) | |||||||||||||||||||||||
| Africa | ||||||||||||||||||||||||||
| Democratic Republic of the Congo | ||||||||||||||||||||||||||
Kibali (45 percent) (1) | 0.99 | 1.72 | 1.70 | |||||||||||||||||||||||
| Ghana | ||||||||||||||||||||||||||
| Iduapriem | 14.89 | 0.73 | 10.90 | |||||||||||||||||||||||
| Guinea | ||||||||||||||||||||||||||
Siguiri (85 percent) (1) (3) | 50.16 | 0.58 | 28.84 | |||||||||||||||||||||||
| Mali | ||||||||||||||||||||||||||
Sadiola (41 percent) (1) | 1.32 | 2.31 | 3.07 | |||||||||||||||||||||||
| Tanzania | ||||||||||||||||||||||||||
| Geita | 4.08 | 1.56 | 6.37 | |||||||||||||||||||||||
| South Africa | ||||||||||||||||||||||||||
Surface sources (2) | 521.86 | 0.26 | 136.01 | |||||||||||||||||||||||
| Australia | ||||||||||||||||||||||||||
| Sunrise Dam | 8.53 | 0.94 | 8.05 | |||||||||||||||||||||||
Tropicana (70 percent) (1) | 15.40 | 0.94 | 14.52 | |||||||||||||||||||||||
| Americas | ||||||||||||||||||||||||||
| Argentina | ||||||||||||||||||||||||||
Cerro Vanguardia (92.5 percent) (1) | 5.97 | 0.44 | 2.64 | |||||||||||||||||||||||
| Brazil | ||||||||||||||||||||||||||
| Serra Grande | 0.01 | 2.00 | 0.02 | |||||||||||||||||||||||
| Stockpiles | At 31 December 2016 | |||||||
| Tonnes (million) | Grade (grams/tonne) | Gold content (tonnes) | ||||||
| South Africa | ||||||||
Surface sources (2) | 766.42 | 0.26 | 199.00 | |||||
| Continental Africa | ||||||||
| Ghana | ||||||||
| Iduapriem | 11.64 | 0.72 | 8.37 | |||||
| Guinea | ||||||||
Siguiri (85 percent) (1) (3) | 57.45 | 0.59 | 33.71 | |||||
| Mali | ||||||||
Morila (40 percent) (1) | 6.18 | 0.55 | 3.37 | |||||
Sadiola (41 percent) (1) | 5.26 | 1.13 | 5.94 | |||||
| Tanzania | ||||||||
| Geita | 3.95 | 1.35 | 5.33 | |||||
| Australasia | ||||||||
| Australia | ||||||||
| Sunrise Dam | 11.67 | 1.00 | 11.65 | |||||
Tropicana (70 percent) (1) | 6.43 | 0.92 | 5.95 | |||||
| Americas | ||||||||
| Argentina | ||||||||
Cerro Vanguardia (92.5 percent) (1) | 6.57 | 0.65 | 4.26 | |||||
| Brazil | ||||||||
| Serra Grande | 0.06 | 2.00 | 0.12 | |||||
(1) Ore Reserve attributable to AngloGold Ashanti’s percentage interest shown.
(2) Centralised operations treating material on surface that was previously generated by several underground operations, includes tailings material. (3) Spent heap included in Ore Reserve. |
Rounding may result in computational differences.
123
Drill hole spacing: Imperial
In determining the Proven and Probable Ore Reserve, AngloGold Ashanti applied the following drill hole spacing:
| Drill Hole Spacing | ||||||||
| Proven Ore Reserve | Probable Ore Reserve | |||||||
| Democratic Republic of the Congo | ||||||||
| Kibali | 16 x 33 feet, | 98 x 131 feet, 131 x 131 feet | ||||||
| Ghana | ||||||||
| Iduapriem | 66 x 49 feet | |||||||
| Obuasi | 66 x 66 feet | 197 x 197 feet | ||||||
| Guinea | ||||||||
| Siguiri | 66 x 131 feet, 82 x 82 feet | |||||||
| 33 | ||||||||
33 x 33 feet, 66 x 66 feet, 82 x 49 feet, 82 x 131 feet, 131 x 66 feet, 131 x 131 feet | ||||||||
| Australia | ||||||||
| Sunrise Dam | 33 x 33 feet, 82 x 82 feet | 131 x 66 feet, 131 x 131 feet | ||||||
| Tropicana | 39 x 39 feet, 82 x 82 feet | 164 x 82 feet, 164 x 164 feet | ||||||
| Americas | ||||||||
| Argentina | ||||||||
| Cerro Vanguardia | 20 x 66 feet, 39 x 16 feet | 131 x 131 feet | ||||||
| Brazil | ||||||||
| AGA Mineração | 33 x 66 feet, 66 x 33 feet, 66 x 98 feet, 82 x 82 feet, 98 x 98 feet | 66 x 131 feet, 131 x 197 feet, 164 x 164 feet, 197 x 131 feet, 197 x 197 | ||||||
| Serra Grande | 33 x 33 feet, 33 x 66 feet | 82 x 82 feet, 131 x 66 feet, 131 x 131 feet, | ||||||
| Gramalote | None | 164 x 164 feet | ||||||
124
Drill hole spacing: Metric
In determining the Proven and Probable Ore Reserve, AngloGold Ashanti applied the following table of drill hole spacing:
| Drill Hole Spacing | ||||||||
| Proven Ore Reserve | Probable Ore Reserve | |||||||
| Democratic Republic of the Congo | ||||||||
| Kibali | 5 x 10 metre, | 30 x 40 metre, 40 x 40 metre | ||||||
| Ghana | ||||||||
| Iduapriem | 20 x 15 metre | |||||||
| Obuasi | 20 x 20 metre | 60 x 60 metre | ||||||
| Guinea | ||||||||
| Siguiri | 20 x 40 metre, 25 x 25 metre | |||||||
| 10 | ||||||||
10 x 10 metre, 20 x 20 metre, 25 x 15 metre, 25 x 40 metre, 40 x 20 metre, 40 x 40 metre | ||||||||
| Australia | ||||||||
| Sunrise Dam | 10 x 10 metre, 25 x 25 metre | 40 x 20 metre, 40 x 40 metre | ||||||
| Tropicana | 12 x 12 metre, 25 x 25 metre | 50 x 25 metre, 50 x 50 metre | ||||||
| Americas | ||||||||
| Argentina | ||||||||
| Cerro Vanguardia | 6 x 20 metre, 12 x 5 metre | 40 x 40 metre | ||||||
| Brazil | ||||||||
| AGA Mineração | 10 x 20 metre, 20 x 10 metre, 25 x 25 metre, 20 x 30 metre, 30 x 30 metre | 20 x 40 metre, 40 x 60 metre, 50 x 50 metre, 60 x 40 metre, 60 x 60 metre | ||||||
| Serra Grande | 10 x 10 metre, 10 x 20 metre | 25 x 25 metre, 40 x 20 metre, 40 x 40 metre, | ||||||
| Gramalote | None | 50 x 50 metre | ||||||
125
ITEM 4A: UNRESOLVED STAFF COMMENTS
Not applicable.
126
ITEM 5: OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of AngloGold Ashanti Limited under IFRS for the three years ended and as at 31 December 2017, 20162020, 2019 and 2015.2018. The discussion of operating and financial results in this “Item 5: Operating and Financial Review and Prospects” relates to the company’s continuing operations (unless the context indicates otherwise).
On 12 February 2020, AngloGold Ashanti announced that it had reached an agreement to sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited (Harmony). Following receipt of all regulatory approvals, the transaction closed on 30 September 2020, with Harmony taking effective control of these producing assets and liabilities on 1 October 2020. While the South African mining rights were passed to Harmony as between the parties at that time, the registration and consolidation of such mining rights is still pending. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—South Africa”. The South African producing assets and related liabilities sold to Harmony are treated as a discontinued operation for the year ended and as at 31 December 2020. See “Item 18: Financial Statements—Note 9— Discontinued operations and assets and liabilities held for sale” for further details.
On 10 November 2020, AngloGold Ashanti together with its joint venture partner Barrick Gold Corporation (Barrick) completed the sale of their entire interests in Société des Mines de Morila S.A., the company operating the Morila gold mine in Mali, to Firefinch Limited (previously named Mali Lithium Limited). On 30 December 2020, AngloGold Ashanti together with its joint venture partner IAMGOLD Corporation (IAMGOLD) completed the sale of their entire interests in Société d’Exploitation des Mines d’Or de Sadiola S.A., the company operating the Sadiola gold mine in Mali, to Allied Gold Corp. (Allied Gold). See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Mali”.
This item should be read in conjunction with the company’s consolidated financial statements and the notes thereto which are included under Item 18 of this annual report.
Overview
AngloGold Ashanti is a global gold mining company headquartered in Johannesburg, South Africa. AngloGold Ashanti’s main product is gold. As part of extracting gold the company also produces silver uranium oxide and sulphuric acid as by-products. Revenue fromThe company no longer produces uranium oxide as a by-product following the sale of by-products is recognised as a reduction of cost of sales in the consolidated statement of income.its Vaal River operations, effective 28 February 2018. By-product revenue from continuing operations amounted to $154$105 million in 2017 (2016: $1382020 (2019: $86 million; 2015: $1272018: $133 million) out of total revenue from product sales from continuing operations of $4,543$4,427 million in 2017 (2016: $4,2542020 (2019: $3,525 million; 2015: $4,1742018: $3,336 million). See “Note 3 - Revenue” to the consolidated financial statements“Item 18: Financial Statements—Note 3—Revenue from product sales” for additional information. The company sells its products on world markets.
AngloGold Ashanti conducts gold-mining operations in the following regions, which represent its business segments:
•Australia; and
•Americas (comprising Argentina, Brazil and projects in Colombia and in the United States of America (sold August 2015))States).
As at 31 December 20172020, the company reported, on an attributable basis, Proven and Probable Ore Reserve for gold of approximately 42.125.2 million ounces in subsidiaries and 7.54.2 million ounces in equity accounted joint ventures. For the year ended 31 December 2017,2020, AngloGold Ashanti reported an attributable gold production of approximately 3.42.44 million ounces from subsidiaries, and 0.40.36 million ounces from equity accounted joint ventures.ventures and 0.24 million ounces from discontinued operations. As at 31 December 2020, the company reported an attributable Proven and Probable Ore Reserve for copper of 3,105Mlbs.
AngloGold Ashanti’s costs and expenses consist primarily of total cash costs, amortisation, corporate administration, and other expenses, and exploration and evaluation costs. Total cash costs include cash operating costs (which include salaries and wages, stores, explosives, timber, reagents, fuel, power, water and contractors’ costs), royalties and other consumables (which include explosives, timber and reagents amongst others), fuel, power and water, contractors’ costs and royalties.cash costs. The company’s mining operations consist of deep-level underground mines as well as open-pit operations, both of which are labour intensive, therefore salaries and wages are a significant component of total cash costs.
127
The year 2020 was marked by a number of factors, risksdevelopments that were historically unprecedented. With respect to the COVID-19 pandemic, there was the speed at which the pandemic escalated globally, the extent and uncertainties, someseverity of which are beyondrelated lockdowns in certain countries, and the company's control, includingsize of the government stimulus measures globally. At the same time, global equity markets have gained 14 percent over the course of 2020. The year also demonstrated the incredible resilience of people, institutions, and financial markets. Following the US elections and the ongoing roll-out of vaccines, investors have become increasingly bullish, pushing the global equity markets to record highs.
As the pandemic unfolded and uncertainty increased, investors’ risk averseness navigated them towards gold. This influx into the gold market drove the market spot gold price up 25 percent year-on-year from approximately $1,517/oz (at 1 January 2020) to approximately $1,896/oz (at 31 December 2020). As a result, market spot gold price volatility skyrocketed, recording the variance between the highest ($2,064/oz) and lowest ($1,469/oz) market spot gold prices exchange rate fluctuations, inflation, as well as political, mining and other risks. In particular, our production outlook is subject to, among other things, labour disruptions, unplanned stoppages and safety-related interventions,during 2020 at 40 percent. 2020 also included a new all-time high for the stability and availability of power as well as other operational risks. Certain of these risks, uncertainties and other factors are described in “Item 3D: Risk factors”. See also “Note regarding forward-looking statements”. Furthermore,market spot gold price. The average market spot gold price was recorded at $1,772 per ounce for the forecast assumes no changesfull year 2020.
According to the asset portfolio/operating mines.
On the US dollarother hand, higher gold prices and weak local currencies drove the domestic price of gold was up 13to historical highs, negatively impacting the demand for jewellery. In addition, the restriction on social gatherings further exacerbated the decrease in the demand for jewellery. Total annual jewellery demand dropped to 1,411.6 tonnes (34 percent forlower year-on-year), the year, its biggestlowest in the recorded history of the WGC annual gain since 2010, outperforming all major asset classes other than stocks. Supporting the pricedata series.
Official reserves showed a mixed picture of gold were, a weakening US dollarbuying and elevated price/earnings ratios and valuations.selling during 2020. In light of these circumstances, gold was likely seen as a means of managing these market risks. The geopolitical instability further heightened investor uncertainty and fuelled flows into gold.
Management uses the market spot gold price to a half percent from a quarter percent prior. The European Central Bank (ECB) claimed victory over deflation in March 2017 and signalled that its monetary policy would become gradually less expansionary.
Restatement of 36 percent in aggregate during quarter four of 2017 adding 132 tonnes. For 2017, the official sector remained an important source of demand for gold and net purchases were up 123 tonnes (48 percent) to 381 tonnes compared to 2016 (258 tonnes).prior year disclosures
The restatement has no impact on reported totals in the Statement of comprehensive income of profit (loss) for the new ownersperiod; other comprehensive income (loss) for the period, net of tax; total comprehensive income (loss) for the period, net of tax; or on earnings per share or headline earnings per share for the period.
Identification and classification of discontinued operations
During 2019, the decision to conclude an agreement with AngloGold Ashanti andsell the employees’ organised labour representatives to determine the number of existing employees who would continue to work at theremaining South African operations after the change in ownership becomes effective. This agreement was concluded on 16 November 2017. Of the total workforce of 3,638 employees, 3,054 employees transferred to the new owner Heaven-Sent. AngloGold Ashanti is honoring its undertaking to pay accrued severance packages to all affected employees at Kopanang immediately following the conclusionmade, judgement was applied regarding classification of the disposal group as held for sale transaction. The Kopanang sale transaction became unconditional on 28 February 2018.
128
discontinued operation. The sale was announced on 12 February 2020. Refer to “Item 18: Financial Statements—Note 9—Discontinued operations that will continue to be treated through the Kopanang gold plant, which will also be retained by AngloGold Ashanti. These two operations in the Vaal River region, together with the long-life Mponeng mine in the West Wits region, will form AngloGold Ashanti’s operating base in South Africa and contribute 13 percent of the group’s production on a proforma basis.
Key factors affecting results
Gold prices
AngloGold Ashanti’s operating results are directly related to the market spot gold price, of gold, which can fluctuate widely and is affected by numerous factors beyond its control, including investment, jewellery and industrial demand (particularly in China and India), expectations with respect to the rate of inflation, the strength of the US dollar (the currency in which the price of gold is generally quoted) and of other currencies, interest rates, actual or expected gold sales and purchases by central banks and the International Monetary Fund (IMF), global or regional political or economic events or conditions, the impact of global health crises and pandemics such as COVID-19, and production and cost levels in major gold-producing regions.
The current demand for and supply of gold may affect gold prices, but not necessarily in the same manner as current supply and demand affects the prices of other commodities. The supply of gold consists of a combination of new production and fabricated gold held by governments, public and private financial institutions, industrial organisations and private individuals. As the global gold production in any single year constitutes a small portion of the total potential supply of gold, short termshort-term variations in current production do not necessarily have a significant impact on the supply of gold or on its price.
The market for gold bullion bar, the company’s primary product, is generally limited to the bullion banks. The number of these banks has declined over the last few years.decade. Additionally, due to the diversity and depth of the total gold market, the bullion banks do not possess significant pricing power.
The price of gold is often subject to sharp, short-term changes. The shift in gold demand from physical demand to investment and speculative demand may exacerbate the volatility of gold prices.
Yearly average gold prices received per ounce have changed during the three years under review as follows:
The average ofgold price received per ounce increased by $384 per ounce, or 28 percent, from $1,394 per ounce for the year ended 31 December 2019 to $1,778 per ounce for the year ended 31 December 2020. The average market spot gold price increased by $378 per ounce, or 27 percent, from $1,394 per ounce for the year ended 31 December 2019 to $1,772 per ounce for the year ended 31 December 2020.
The market spot gold price has been highly volatile in 2020. After an initial increase in the beginning of the year, the market spot gold price decreased from a high of $1,687 per ounce on 6 March 2020 to a low of $1,470 per ounce on 19 March 2020 in the midst of a wider market dislocation related to the COVID-19 pandemic prompting the US Federal Reserve to cut interest rates to zero and announce significant economic stimuli. During the following three months the market spot gold price increased 22 percent to $1,781 per ounce by 30 June 2020. The market spot gold price continued to rise and recorded a high of $2,064 per ounce on 6 August 2020 before stabilising at around $1,900 per ounce. The market spot gold price at closing on 31 December 2020 was $1,896 per ounce compared to $1,517 per ounce the prior year. Between 1 January 2018 to2021 and 19 March 2018 was $1,3292021, the market spot gold price traded between a low of $1,681.24 per ounce and a high of $1,949.35 per ounce. On 19 March 2018,2021, the afternoon price for gold on the London Bullion Market was $1,317$1,744.74 per ounce.
If income from gold sales falls for an extended period below the company’s total cash costs at its operations, AngloGold Ashanti could determine that it is not economically feasible to continue production at some or all of its operations. Declining gold prices may also force a reassessment of the feasibility of a particular exploration or development project or projects, and could lead to the curtailment or suspension of such projects. A sustained decrease in gold prices may force the company to change its dividend payment policies, reduce expenditures and undertake measures to address its cost base. In addition, the use of lower gold prices in Ore Reserve estimates and life-of-mine plans could result in material write-downs of the company’s investment in mining properties and increase amortisation, environmental rehabilitation and mine closure charges.
On 22 and 28 January 2020, the company entered into Asian style zero-cost collars in respect of its Argentinean operations (CVSA) for a total of 130,900 ounces (70 percent of CVSA’s annual gold production) for the period February 2020 to December 2020. The strike prices were as follows: $1,500 per ounce on the floor and an average price of $1,701.34 per ounce on the cap. At 31 December 2020, the group had no commitments against future production potentially settled in cash. At 31 December 2020, a realised loss of $14 million was incurred in respect of these gold derivatives.
129
Production levels
In addition to gold prices, AngloGold Ashanti’s gold income in any year is also influenced by its level of gold production. Production levels are in turn influenced by grades, tonnages mined and processed through the plant, and metallurgical recoveries. Attributable gold production (including joint ventures) increasedremained fairly consistent between 2018 - 2020 from 3.632.91 million ounces in 2016 to 3.762018, 2.86 million ounces in 2017. The increase2019 to 2.81 million ounces in production levels is due to a variety of factors, as follows:2020. For more information on the company’s business and operations, see “Item 4B: Business Overview”.
In addition to the closureimpact of TauTona, lower volumesthe COVID-19 pandemic on the gold price discussed under the caption “—Gold Prices”, the COVID-19 pandemic has the potential to have a significant adverse impact on our operations by causing supply chain delays and grades mined.
AngloGold Ashanti continues to respond to the evolving COVID-19 pandemic while contributing to the global effort to stop the spread of the virus and provide public health and economic relief to local communities. AngloGold Ashanti has taken a number of proactive steps to protect employees, host communities and the business itself. For example, AngloGold Ashanti continues to conduct increased screening and surveillance of employees, and only essential travel is permitted for company employees. The company has implemented hygiene awareness campaigns, enhanced protocols for disinfection of equipment, working environments and infrastructure and social distancing, prohibitions on gatherings, and remote work arrangements where feasible. AngloGold Ashanti ensured that no employee lost salaries or benefits because of pandemic-related lockdowns. In addition, a multidisciplinary committee was established at the outset of the outbreak to implement a crisis management strategy. The centrepiece of this strategy was our five-phase preparedness and response plan, based on lessons learned during the 2014 to 2016 Ebola outbreak in Guinea, and associated risk monitoring system. Our teams also worked closely with community leadership around our mines and governments in our operating jurisdictions to provide support for efforts to ‘flatten the curve’, cushion the economic impact of the pandemic and help bolster their responses to the outbreak. These steps have been in line with the company’s values, the requirements of the countries in which we operate, and guidelines provided by the World Health Organization (WHO). The health and wellbeing of our employees and our host communities remains our key priority.
The extent to which the COVID-19 pandemic will impact the company’s results will depend on the scale, duration and geographic reach of future developments, which are highly uncertain and cannot be predicted, including notably the possibility of a recurrence or “multiple waves” of the outbreak and new variants.
The impact on revenue from product sales is estimated at $94 million due to lower gold produced of 59,000 ounces from continuing operations. The impact on cost of sales is estimated at $19 million and its impact on all-in sustaining costs was estimated at $35 per ounce, or eight percentabout three percent. Consumable inventory levels were increased at certain operations to mitigate potential supply chain challenges resulting from the pandemic.
As of 26 March 2021, all of AngloGold Ashanti’s mines are operating normally subject to updated COVID-19-related protocols and various travel restrictions, except Cerro Vanguardia which is currently running at between 60% to 80% mining capacity due to continuing inter-provincial travel restrictions in Argentina, which prevent certain employees from getting to the site.
As of 31 December 2020, second waves of the outbreak were being experienced in several of our operating jurisdictions, coinciding with the spread of new, more contagious variants of the virus. As with the first waves, the increase in production primarily duecases triggered government-imposed movement restrictions, including mandatory isolation and quarantine measures. We continue to increased grades, improved metallurgical recoveriesobserve strict health protocols and improved mill throughput.to exercise vigilance in relation to business continuity including supply chain. We remain mindful that the COVID-19 pandemic, its impacts on communities and economies, and the actions authorities may take in response to it, are subject to change in response to current and future conditions.
Climate change and other environmental factors
Rising temperatures, changing rainfall patterns and extreme weather conditions believed to be caused by climate change remain growing concerns for businesses, investors, broader society and governments. This has led to growing pressure on companies, including those in the mining sector, to reduce greenhouse gas emissions consistent with national commitments
130
under the Paris Agreement, to promote responsible corporate practices and to increase transparency about the risks and opportunities of transitioning to a low-carbon economy. Pressure from governments, investors and broader society for mining companies to improve environmental stewardship and reduce greenhouse gas emissions, both absolutely and in production primarily dueterms of consumption rates per tonne mined, is likely to higher tonnages mined, coupledintensify in the future.
Limiting average global temperature increases to less than 1.5 degrees Celsius by 2050, in line with improved plant performance at AGA Mineraçãothe goals of the Paris Agreement, is believed to require global emissions to decline by 8% to 10% annually between 2020 and 2050. In 2008, AngloGold Ashanti set emissions intensity reduction targets to achieve a 30% reduction in Brazil.GHG emissions per tonne processed, by 2022, as compared to 2007. This target was met in 2018. Work is underway during 2021 to set new medium-term targets, and to begin working toward charting a pathway to net zero emissions. In 2020, the company has established a Climate Change Working Group to focus on the related strategy and transition processes, to develop metrics and targets, and to oversee implementation of our strategy.
AngloGold Ashanti also aims to align our reporting on climate-related impacts with the guidelines and recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) beginning in our annual reports for the fiscal year ending 31 December 2021. In addition, the company will continue reporting in line with standards and guidelines of the ICMM, the Principles for Responsible Investment (PRI) supported by the UN, the United Nations Global Compact and the World Gold Council’s Responsible Gold Mining Principles, among others.
Foreign exchange fluctuations
Total cash costs in all business segments are for local procurement largely incurred in local currency where the relevant operation is located. US dollar denominated total cash costs and net income tend to be adversely impacted by local currency strength and favourably impacted by local currency weakness, assuming there are no other offsetting factors. AngloGold Ashanti’s financial results can be influenced significantly by the fluctuations in the South African Rand, Brazilian Real,real, Australian Dollar,dollar, and, to a lesser extent, the Argentinian Peso, Ghanaian Cedipeso and other local currencies. As set out below, during the year ended 31 December 2017,2020, the Argentinean Peso weakenedArgentinian peso, Brazilian real and the South African Rand, Australian dollar and Brazilian Real strengthened,weakened, which collectively had a favourable impact on AngloGold Ashanti’s US dollar denominated total cash costs.
| Average annual exchange rates to the US dollar | 2020 | 2019 | 2018 | ||||||||||||||
| Brazilian real | 5.15 | 3.94 | 3.66 | ||||||||||||||
| Australian dollar | 1.45 | 1.44 | 1.34 | ||||||||||||||
| Argentinian peso | 70.71 | 48.29 | 28.14 | ||||||||||||||
| Average annual exchange rates to the US dollar | 2017 | 2016 | 2015 | |||||
| South African Rand | 13.30 | 14.68 | 12.77 | |||||
| Brazilian Real | 3.19 | 3.48 | 3.33 | |||||
| Australian Dollar | 1.30 | 1.35 | 1.33 | |||||
| Argentinian Peso | 16.57 | 14.78 | 9.26 | |||||
In 2017,2020, the company derived 6752 percent (61(45 percent including joint ventures) of its revenues from South Africa,continuing operations from Brazil, Australia and Argentina, and incurred 7153 percent (64(48 percent including joint ventures) of its total cash costs from continuing operations in South Africa, Brazil, Australia and Argentina. A one percent strengthening of these local currencies against the US dollar will result in an increase in total cash costs incurred of about $21$12 million or $6$4 per ounce.
Certain exchange controls were in force in emerging markets in which the company operates during the period under review, including, for example South Africa and Argentina. In the case of South Africa,Argentina, although the exchange rate of the randArgentinian peso is primarily market determined, its value at any time may not be considered a true reflection of the underlying value while exchange controls exist. The government has indicated its intention to relax exchange controls over time. As exchange controls are relaxed, rand exchange rates will be more closely tied to market forces. It is not possible to predict whether or when this will occur or the future value of the rand. For a detailed discussion of these exchange controls, see “Item 10D: Exchange controls”.Argentinian peso.
Total cash costs and effects of inflation
Total cash costs include cash operating costs (which include salaries and wages, stores, explosives, timber, reagents, fuel, power, water and contractors’ costs), royalties and other consumables (which include explosives, timber and reagents among others), fuel, power and water, contractors’ costs and royalties.cash costs. The mining industry continues to experience price inflation for costs of inputs used in the production of gold, which leads to higher total cash costs reported by many gold producers.
AngloGold Ashanti is unable to control the prices at which it sells its gold. Accordingly, in the event of significant inflation in South Africa or, to a lesser extent, Brazil, Argentina or Australia, without a concurrent devaluation of the local currency or an increase in the price of gold, there could be a material adverse effect upon the company’s results and financial condition. See “Item 3D—Risk Factors—Inflation may have a material adverse effect on results of operations”.
At 31 December 2020, AngloGold Ashanti employs over 51,00028,000 people globally, most of whom are members of trade unions, particularly in South Africa, Continental Africa and the Americas. Salaries and wages account for a significant component of local total cash costs and are impacted by annual wage increases.
Energy costs, comprising power, fuel and lubricants, are another material component of total cash costs. Due to the remote location of some of its mines in Continental Africa, AngloGold Ashanti uses fuel to generate power and uses fuel and lubricants at its mines to run its fleet and processing plants. The price of Brent crude oil has fluctuated between $54 anddecreased from $71 per barrel in 2018, $65 per barrel of Brent crude in 2017.2019 to $42 per barrel in 2020, a 41 percent decrease over the three-year period. AngloGold Ashanti estimates that for each $1 per barrel rise in the oil price, other factors remaining equal, the average total cash costs of all its operations increases by
131
about $3$2 million or $0.8$0.7 per ounce, with the total cash costs of certain of the
company’s mines, particularly Siguiri (Guinea), Iduapriem (Ghana), Geita Siguiri, Sadiola(Tanzania) and Kibali,Tropicana (Australia) which are more dependent on fuel, being more sensitive to changes in the price of oil. Energy costs, even
In February 2020, AngloGold Ashanti entered into Asian style zero-cost collars for a total of approximately 342,000 barrels of Brent crude oil for the period February 2020 to December 2020. The average strike prices were $45 per barrel on the floor and an average price of $65 per barrel on the cap. The same month, AngloGold Ashanti entered into Asian style zero-cost collars for a total of approximately 622,000 barrels of Brent crude oil for the period March 2020 to December 2020. The average strike prices were $44.50 per barrel on the floor and an average price of $65 per barrel on the cap. At 31 December 2020 the group had no commitments potentially settled in business segments which are supported by grid power, like South Africa, have increased considerably over the three year period, with price increases from Eskom (South Africa’s power utility) that exceeded average inflation. These increases have adversely impacted total cash costs.cash. At 31 December 2020, a realised loss of $5 million was incurred in respect of these oil derivatives.
AngloGold Ashanti has no influence over the cost of most consumables, many of which are linked to some degree to the price of oil and steel and in a number of cases have exceeded inflation.consumables. Furthermore, there has also been volatility recently in the price of steel, used in the manufacture of most forms of fixed and mobile mining equipment, which is a relatively large contributor to the operating costs and capital expenditure of a mine. Fluctuations in oil and steel prices have a significant impact on operating costs and capital expenditure.
Royalties (excluding joint ventures), which are generally calculated as a percentage of revenue, varied over the past three years from $100 million incurred in 2015 to $105 million incurred in 2016 and $116$133 million in 2017,2018 to $137 million in 2019 and $181 million in 2020, a 36 percent increase over the three-year period, primarily due to the variations in the gold prices received, production and royalty rate increases. At Geita in Tanzania, despite the dispute over the legal basis for the increased royalty rate, from four percent to six percent, and the imposition of one percent clearing fee for the export of gold. Our subsidiaries in Tanzania are paying the new levies under protest. As a result, the additional royalty of $11 million paid has been expensed and accounted for as a special item.
Royalties are likely to continue to vary in the coming years asdue to the variations in the gold prices and the fact that in a number of jurisdictions host governments increasingly seek to obtain a higher share of revenue by increasing the royalty rates for gold mines.
Total provisions for decommissioning and for environmental restoration activities (excluding joint ventures) totalled $705ventures and discontinued operations) totaled $637 million in 2016 and $6952018, $634 million in 2017. The change2019 and $674 million in 2020. During 2019, $96 million was transferred to liabilities related to assets held for sale. During 2020, the provisions for decommissioning and restoration increased by $40 million due to several changes in calculating estimates isthat are attributable to changes in discount rates due to changes in global economic assumptions, and changes in mine plans resulting in a change in cash flows, and changes in design of tailings storage facilities in Brazil due to new requirements enacted or formalized in 2020 and changes in methodology following requestsfor calculating such estimates, in response to comments from the environmental regulatory authoritiesauthorities. See also “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine”, “Item 4B: Business Overview—Mine Site Rehabilitation and royalty rate increases. During 2017 $23 million for restorationClosure” and decommissioning was transferred to assets held for sale.“Item 4B: Business Overview—Environmental, Health and Safety Matters”.
Amortisation of tangible assets
Amortisation of tangible assets increaseddecreased during the 20152018 - 20172020 period, from $737$553 million to $817$521 million, largely due to increasedlower deferred stripping at Tropicana, open pit ore being depleted at Geita and lower production at Geita, Siguiri and Cerro Vanguardia. The increase in amortisation was partly offset by the impairment of assets at Kopanang and Tau Tona and the reclassification of the assets and liabilities of Moab Khotsong and Kopanang, to non-current assets and liabilities held for sale during October 2017, at which stage, amortisation of these assets ceased.
Exploration and evaluation costs
The company has expensed exploration expenditure during the years ended 31 December 2015, 20162018, 2019 and 20172020 in order to replenish depleting Ore Reserve and bring new ore bodies into pre-feasibility or feasibility. The expensed exploration costs incurred over the last three fiscal years amounted to $132$98 million in 2015, $1332018, $112 million in 20162019 and $114$124 million in 2017.2020. Exploration expenditure reducedincreased during 2017, with a reduction2020 mainly due to an increase in greenfieldsbrownfields exploration as well as lower spend on prefeasibility studies.and pre-feasibility studies in Colombia.
Corporate administration, marketing and other expenses
The corporate administration, marketing and other expenses incurred amounted to $78$76 million in 2015, $612018, $82 million in 20162019 and $64$68 million in 2017.2020. The costs were higherdecrease in 20172020 is mainly due to the stronger rand.exchange rate impact of weaker local currency and lower labour costs (cash shares costs and equity share costs) and lower overseas travel costs partly offset by higher audit fees and insurance costs.
AngloGold Ashanti reviews and tests the carrying value of its assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. AngloGold Ashanti values individual mining assets at the lowest level for which cash flows are identifiable as independent of cash flows of other mining assets and liabilities.
If there are indications that impairment may have occurred, AngloGold Ashanti prepares estimates of expected future cash flows for each group of assets. Expected future cash flows are inherently uncertain, and could materially change over time. They are significantly affected by Ore Reserve and production estimates, together with economic factors, such as market spot and forward gold prices, discount rates, currency exchange rates, estimates of costs to produce Ore ReservesReserve and future
132
capital expenditures. Alternatively, should any of these factors reverse, then AngloGold Ashanti may have to reverse previously recognised impairments.
When reviewing goodwill and other tangible assets for impairment, AngloGold Ashanti'sAshanti’s assumption on gold price represents its best estimate of the future price of gold. In arriving at the estimated long-term real gold price, AngloGold Ashanti considers all available market information including current prices, historical averages, and forward pricing information and data. The long termlong-term real gold price of $1,240$1,450 per ounce in 20172020 and $1,212$1,300 per ounce in 2016,2019, were based on a range of economic and market conditions, which were, at that time, expected to exist over the remaining useful life of the assets.
AngloGold Ashanti considers the long-term fundamentals that provide support to the gold price assumption. These include, amongst other things, gold as a long-term store of value, hedge against inflation, safe haven status, strong physical demand from emerging markets, central bank purchases, quantitative easing and devaluation of paper currency, falling global mine production and rising costs of producing gold, all of which represent significant and enduring trends supportive of AngloGold Ashanti'sAshanti’s gold price assumption.
The actual market spot gold price averaged $1,257$1,772 per ounce in 20172020 and $1,248$1,394 per ounce in 2016.2019. The market spot gold price in 20182020 has been subject to volatile short term swingsshort-term swings. Between 1 January 2021 and has averaged $1,32919 March 2021, the market spot gold price traded between a low of $1,681.24 per ounce from 1 January 2018 toand a high of $1,949.35 per ounce. On 19 March 2021, the afternoon price for gold on the London Bullion Market was $1,744.74 per ounce.
Other expenses
Other expenses incurred over the last three fiscal years amounted to $79 million in 2018, $83 million in 2019 and closed$57 million in 2020. The decrease during 2020 is largely due to ceasing care and maintenance activities at $1,317 per ounce on 19 March 2018.Obuasi as the redevelopment project progressed to commercial level of production in 2020, partly offset by increased value added tax (VAT) and other duties expensed and the Brazilian power utility legal settlement in 2019 which was not repeated in 2020.
Taxation decreasedincreased over the period 20152018 - 20172020 from an expense of $211$212 million in 20152018 to an expense of $108$625 million in 2017. Reduction2020. Increase in taxation over the period 20152018 - 20172020 is largely due to a lower deferred taxation ratehigher earnings in South Africa in carry forward lossesTanzania, Brazil, Australia, and in Brazil due to the effect of exchange rate movements as well as lower current and withholding taxes related to Tanzanian operations.Ghana.
Taxation is likely to continue to be volatile in the coming years, as host governments in a number of jurisdictions increasingly seek to obtain a higher share of revenue by increasing rates of existing taxes and introducing new taxes on gold mines.
Production in 20172020
For the year ended 31 December 2017,2020, AngloGold Ashanti’s total attributable gold production of 3.762.806 million ounces was 130,00056,000 ounces, or fourtwo percent, higherlower than the 20162019 production of 3.632.862 million ounces.
Production decreased by ten percent, or 60,000 ounces in 2020, as compared to 2019, in the Australia region. The decrease is mainly due to planned lower ore sourced from open pit and completion of grade streaming activities while moving into a waste stripping phase at Tropicana during 2020. Steady performance was achieved by Sunrise Dam.
In the Americas region, production decreased by nine percent, or 61,000 ounces in 2020, as compared to 2019. Lower production at Cerro Vanguardia was due to the effect of lower planned grades aligned to the current life-of-mine plan and due to lower tonnes treated as a result of the orderly closureimpact of TauTona. Lower productionthe COVID-19 pandemic. Production was also lower at Mponeng wasSerra Grande due to lower grades as a result of geological model changes, grade control changes and operational delays at high grade stope areas, further impacted by absenteeism due to the COVID-19 pandemic. Production was maintained at AGA Mineração despite the impact of stoppages and absenteeism due to COVID-19, unexpected heavier-than-normal rains in the first half of the year, as well as geotechnical issues on the high-grade areas.
133
Production in 2019
For the year ended 31 December 2019, AngloGold Ashanti’s total attributable gold production of 2.86 million ounces was 50,000 ounces, or two percent, lower reef values andthan the planned move from2018 production of 2.91 million ounces.
Production increased by two percent, or 26,000 ounces, in 2019 as compared to 2018, in the Africa region. The increase was mainly due to the transition to predominantly underground operations which resulted in higher grade areas. Lowermaterial and increased tonnes treated at Geita and improved production at Vaal River Surface Operations wasIduapriem due to low mill availabilitythe Operational Excellence programme which focused on improved grade control practices. The increase in production was partially offset by a decrease at Siguiri due to the Kopanang Gold Plant and the suspensionintegration of the processingCarbon-in-Leach (CIL) combination plant that was completed during the year with a slower ramp-up than anticipated and lower production from both Sadiola and Morila as these two operations near the end of Kopanang marginal ore dumps.their mining activities.
Production decreased by two percent, or 11,000 ounces, in 2019 as compared to 2018, in the Australia region. The decrease resulted from lower mill feed grades due to lower underground mined volume combined with lower mined grade at Sunrise Dam. The decrease in production was partially offset by higher productionan increase at Moab Khotsong due to improved production efficiencies and fewer safety stoppages. Higher production was also recorded at Mine Waste Solutions due to the increase in feed grades due to higher grades from the Sulphur pay and the East tailing storage facilities, coupled with improvements in recoveries.
In the Americas region, production increased by two percent, or 20,000 ounces in 2017 as compared to 2016. The increase was mainly due to higher production from CDS Operation with higher tonnes from the Sulphide mine and grade from both the Oxide and Sulphide mines at AGA Mineração in Brazil.
Comparison of financial performance in 2017, 20162020, 2019 and 20152018
| Financial performance of AngloGold Ashanti | Year ended 31 December | ||||||||||||||||
| (in $ millions) | 2020 | 2019 | 2018 | ||||||||||||||
| Continuing operations | |||||||||||||||||
| Revenue from product sales | 4,427 | 3,525 | 3,336 | ||||||||||||||
| Cost of sales | (2,699) | (2,626) | (2,584) | ||||||||||||||
| Total of all other (expenses) income | (417) | (448) | (429) | ||||||||||||||
| Share of associates and joint ventures’ profit (loss) | 278 | 168 | 122 | ||||||||||||||
| Taxation | (625) | (250) | (212) | ||||||||||||||
| Discontinued operations | |||||||||||||||||
| Profit (loss) from discontinued operations | 7 | (376) | (83) | ||||||||||||||
| Net profit (loss) attributable to equity shareholders | |||||||||||||||||
| - Continuing operations | 946 | 364 | 216 | ||||||||||||||
| - Discontinued operations | 7 | (376) | (83) | ||||||||||||||
| Net profit (loss) attributable to non-controlling interests | |||||||||||||||||
| - Continuing operations | 18 | 5 | 17 | ||||||||||||||
| Financial performance of AngloGold Ashanti | Year ended 31 December | |||||||
| (in millions) | 2017 | 2016 | 2015 | |||||
| Gold income | 4,356 | 4,085 | 4,015 | |||||
| Cost of sales | (3,582 | ) | (3,263 | ) | (3,294 | ) | ||
| Other expenses | (859 | ) | (564 | ) | (552 | ) | ||
| Share of associates and joint ventures’ profit | 22 | 11 | 88 | |||||
| Taxation expense | (108 | ) | (189 | ) | (211 | ) | ||
| Net profit attributable to non-controlling interests | 20 | 17 | 15 | |||||
| Net (loss) profit attributable to equity shareholders – Continuing operations | (191 | ) | 63 | 31 | ||||
| Net (loss) profit attributable to equity shareholders – Discontinued operations | — | — | (116 | ) | ||||
Comparison of total cost of sales in 2017, 20162020, 2019 and 2015
2018
The following table presents cost of sales from continuing operations for the AngloGold Ashanti group for the three-year period ended 31 December 2017:2020:
| Cost of sales for AngloGold Ashanti | Year ended 31 December | ||||||||||||||||
| (in $ millions) | 2020 | 2019 | 2018 | ||||||||||||||
| Total cost of sales | 2,699 | 2,626 | 2,584 | ||||||||||||||
| Inventory change | (21) | (5) | (9) | ||||||||||||||
| Amortisation of tangible assets | (521) | (538) | (553) | ||||||||||||||
| Amortisation of intangible assets | (2) | (3) | (5) | ||||||||||||||
| Amortisation of right of use assets | (47) | (42) | — | ||||||||||||||
| Retrenchment costs | (2) | (4) | (4) | ||||||||||||||
| Rehabilitation and other non-cash costs | (32) | (53) | (17) | ||||||||||||||
| Total cash costs | 2,074 | 1,981 | 1,996 | ||||||||||||||
134
| Cost of sales for AngloGold Ashanti | Year ended December 31 | |||||||
| 2017 | 2016 | 2015(1) | ||||||
| Total cost of sales | 3,582 | 3,263 | 3,294 | |||||
| Inventory change | (15 | ) | 38 | (23 | ) | |||
| Amortisation of tangible assets | (817 | ) | (789 | ) | (737 | ) | ||
| Amortisation of intangible assets | (6 | ) | (20 | ) | (40 | ) | ||
| Retrenchment costs | (6 | ) | (14 | ) | (11 | ) | ||
| Rehabilitation and other non-cash costs | (29 | ) | (43 | ) | 10 | |||
| Total cash costs | 2,709 | 2,435 | 2,493 | |||||
| Royalties | (116 | ) | (105 | ) | (100 | ) | ||
| Other cash costs | (19 | ) | (24 | ) | (27 | ) | ||
| 2,574 | 2,306 | 2,366 | ||||||
| By-products revenue | 154 | 138 | 127 | |||||
| Cash operating costs | 2,728 | 2,444 | 2,493 | |||||
Comparison of financial performance in 20172020 with 20162019
Our gold income is materially impacted by price and volume variances. All of our costs are impacted by the consequences of average exchange rate movements.
Exchange fluctuations in and the average exchange rates for the South African Rand,rand, Brazilian Real,real, Australian Dollardollar and the Argentinean PesoArgentinian peso have effects on the various components that make up our costs based on the level of local procurement of each of these costs. For a discussion of the effect of foreign exchange fluctuations on our financial results, see “Item 5A-Foreign5A: Operating Results—Key factors affecting results—Foreign exchange fluctuations”.
Revenue from product sales from Australia increased by $138 million, or 16 percent, from $854 million in 2019 to $992 million in 2020. The increase in the average gold price received resulted in an increase in gold income of $9$213 million.
Gold income from Australia increased by $63 million, or 10 percent, from $646 million in 2016 to $709 million in 2017. The increase wasproduction decreased mainly due to the increaseplanned lower ore sourced from open pit and completion of 43,000 ouncesgrade streaming activities while moving into a waste stripping phase at Tropicana during 2020. Steady production performance was achieved by Sunrise Dam. The decrease in gold ounces sold in 2017, which resulted in an increasea decrease in gold income of $59 million. Gold production increased at Sunrise Dam due to increased grades and improved metallurgical recoveries and improved mill throughput resulted in higher production at Tropicana. The increase in the gold price received resulted in an increase in gold income of $4$75 million.
Cost of sales
Cost of sales increased from $3,263$2,626 million in 20162019 to $3,582$2,699 million in 2017,2020, which represents a $319$73 million, or 10three percent, increase. The increase was primarily due to $284 million, or 12 percent,an increase in cash operating costs by $50 million, or three percent, to $1,881 million from $2,444$1,831 million in 20162019 and an increase in royalties paid by $44 million, or 32 percent, to $2,728$181 million from $137 million in 2017.2019, partly offset by a decrease in environmental rehabilitation and other non-cash costs by $21 million, or 40 percent, to $32 million in 2020 from $53 million in 2019. The increase in cash operating costs was due to the strengthening of local currencies against the US dollarhigher labour and inflationary increases in labourcontractor costs, consumable stores, COVID-19 pandemic related spend, services and consumable costs,other charges, partly offset by lower fuel and power costs and contractor costs. The increase in royalties of $11 million is due to the increase in revenue from the higher gold price, production achieved and increased royalty rates in 2017 compared to 2016. The additional royalty paid at Geita of $11 million was accounted for as a special item (refer to explanation above under total cash costs and impacts of inflation). Total amortisation increased by $14 million from $809 million in 2016 to $823 million in 2017. There was a $53 million inventory change from negative $38 million to positive $15 million due to a decrease in gold on hand. The increase in costs was partially offset by a $16 million increase in by-product revenue due to higher silver volumes sold. Rehabilitationrehabilitation and other non-cash costs decreased by $14 million from $43 million in 2016 to $29 million in 2017. This decrease arose from the changes to restoration provision cash flows, inflation rates and discount rates compared to 2016. Retrenchment costs decreased by $8 million from $14 million in 2016 to $6 million in 2017.2019.
135
In South Africa, cost of sales increased from $1,041$1,173 million in 20162019 to $1,114$1,232 million in 2017,2020, which represents a $73$59 million, or seven percent increase. The increase was mainly due to the increase in labour costs, stores and consumable costs, fuel and power costs, service related costs and the strengthening of the local currency against the US dollar. The increase was partially offset by a decrease in amortisation of tangible assets and retrenchment costs.
In AustralasiaAustralia, cost of sales increased from $540$632 million in 20162019 to $550$705 million in 2017,2020, which represents a $10 million increase. The increase was mainly due to the strengthening of the local currency against the US dollar, amortisation of tangible assets and inventory change.
In the Americas, cost of sales decreased from silver sales from $99$822 million in 20162019 to $122$764 million in 2017. Silver sold2020, which represents a $58 million, or seven percent, decrease. The decrease was mainly due to the weakening of the local currencies against the US dollar, decrease in rehabilitation and other non-cash costs and lower fuel costs. The Argentinian peso weakened by 46 percent and the Brazilian real by 31 percent, against the US dollar. Such decrease was partly offset by an increase in contractor costs.
Total cash costs
Total cash costs increased from 5.4$1,981 million ounces in 20162019 to 6.6$2,074 million ounces in 2017.2020, which represents a $93 million, or five percent, increase. The increase was mainly at Cerro Vanguardia.primarily due to an increase in cash operating costs and an increase in royalties paid. Total cash costs include cash operating costs (which include salaries and wages, stores, explosives, timber, reagents, fuel, power, water and contractors’ costs), royalties and other cash costs. The increase in total cash costs was partially offset by an $8the weakening of local currencies against the US dollar and lower fuel and power costs.
Cash operating costs increased by $50 million, decreaseor three percent, to $1,881 million in uranium revenue2020 from $1,831 million in South Africa at Kopanang2019, primarily due to the higher labour and Moab Khotsong.contractor costs, consumable stores, services and other charges, partly offset by the weakening of local currencies against the US dollar and lower fuel and power costs. Cash operating costs includes salaries and wages, stores, explosives, timber, reagents, fuel, power, water and contractors’ costs.
Royalties,, which are generally calculated as a percentage of revenue, increased from $105$137 million in 20162019 to $116$181 million in 2017,2020, which represents a $44 million, or 32 percent, increase. The increase was primarily due to an increase in the spot gold prices and an increase in production at Geita, Siguiri Cerro Vanguardia,and Obuasi (which are generally subject to higher royalty rates), partially offset by a decrease in production at Tropicana and Geita.Serra Grande (which are generally subject to lower royalty rates).
Retrenchment costs
Retrenchment costs included in cost of sales decreased by $2 million, or 50 percent, from $14$4 million in 20162019 to $6$2 million in 2017,2020.
Rehabilitation and other non-cash costs
Environmental rehabilitation and other non-cash costs decreased from $53 million in 2019 to $32 million in 2020, which represents an $8a $21 million, or 57a 40 percent, decrease. TheThis decrease as compared to 2019 was mainlyprimarily due to retrenchment coststhe weakening of local currencies against the US dollar, a change in discount rates due to changes in global economic assumptions, changes in mine plans resulting in a change in cash flows, changes in design of tailings storage facilities in Brazil due to new requirements enacted or formalized in 2020, and changes in the South African region being includedmethodology used to calculate such estimates in special items. Thisresponse to comments from environmental regulatory authorities.
Amortisation of tangible, intangible and right of use assets
Amortisation of tangible, intangible and right of use assets expense decreased from $583 million in 2019 to $570 million in 2020, which represents a $13 million, or two percent, decrease. Amortisation of tangible assets decreased by $17 million, or three percent, from $538 million in 2019 to $521 million in 2020, largely due to lower production at Cerro Vanguardia, lower depreciation on the waste stripping asset at Tropicana due to lower ore sourced from open pit while moving into a waste stripping phase and lower amortisation at Serra Grande and Geita. The decrease was partially offset by an increase in retrenchment costsamortisation at Iduapriem due to higher depreciation on the waste stripping asset and commencing amortisation at Obuasi following its commissioning.
Amortisation relating to right of use assets increased by $5 million, or 12 percent, from the South American region.
Inventory change
Inventory increased from $5 million in 2019 to $21 million in 2020, which represents a $16 million, decrease. The change in estimates is attributableor 320 percent increase, largely due to changes in discount rates following changes in global economic assumptions and changes in mine plans. These changes have resulted in changes in cash flows, the designinventory movements at Cerro Vanguardia which drew down on stockpiles.
136
Other expenses
Other expenses decreased from the environmental regulatory authorities.
Finance costs and unwinding of obligations
Finance costs decreased by $16$5 million, or 10three percent, to $142$138 million in 2017,2020, compared to $158$143 million in 2016. The decrease of $16 million was2019, mainly due to the reduction in interest arising on the settlement of the $1.25 billion bond during August 2016 and settlement of the R750 million bond during December 2016 partially offset by higher interest paid on the banking facilities in South Africa of $12 million.lower finance costs from borrowings. Unwinding of obligations expense of $27increased by $10 million, was recordedor 34 percent, to $39 million in 20172020 compared with $22$29 million in 2016.2019, mainly due to an increase in unwinding of other indirect taxes at Geita.
Share of associates and joint ventures'ventures’ profit
Share of associates and joint ventures'ventures’ profit increased by $110 million, or 65 percent, to a profit of $22$278 million in 20172020, compared to a profit $11of $168 million in 2016,2019, mainly as a result of an increase in net impairment reversalsequity earnings of $95 million at Kibali and $7 million at Rand Refinery. On 10 November 2020, AngloGold Ashanti together with its joint venture partner Barrick completed the sale of the Morila gold mine in Mali to Firefinch Limited. On 30 December 2020, AngloGold Ashanti together with its joint venture partner IAMGOLD completed the sale of the Sadiola gold mine in Mali to Allied Gold. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Mali”.
Investments in associates and joint ventures increased by $70 million, or four percent, from $6$1,581 million in 20162019 to $15$1,651 million in 2017.2020, largely due to the cash repatriation from the Kibali joint venture located in the Democratic Republic of the Congo (DRC), which continues to be slow. Cumulative cash receipts from the DRC in 2020 totaled $140 million, which included dividends of $49 million received from Kibali (Jersey) Limited in the fourth quarter of 2020. At 31 December 2020, AngloGold Ashanti’s attributable share of the outstanding cash balances awaiting repatriation from the DRC amounted to $424 million. Barrick, the operator of the Kibali joint venture, continues to engage with the DRC Government regarding the 2018 Mining Code and the cash repatriation. Since the third quarter of 2020, VAT offsets and refunds have also been impacted by the COVID-19 pandemic in the DRC. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Democratic Republic of the Congo (DRC)”.
Taxation
A taxation expense of $108$625 million was recorded in 2017,2020, compared to an expense of $189$250 million in 2016.2019, which represents a $375 million, or 150 percent, increase. Charges for current tax in 20172020 amounted to $176$562 million, compared to $ 234$298 million in 2016.2019, which represents a $264 million, or 89 percent, increase. The decreaseincrease in current tax is mainly due to lowerhigher earnings in BrazilAustralia, Ghana, Tanzania and Tanzania, elimination of withholding tax on dividends in 2017 in Argentina and credits due to changes in tax legislation substantially enacted in North America in late December 2017.Argentina. Charges for deferred tax in 20172020 amounted to a net deferred tax benefitexpense of $68$63 million, compared to a net deferred tax benefit of $45$48 million in 2016.2019, which represents a $111 million, or 231 percent, increase. The increase in the deferred taxation benefit is largely dueexpense mainly relates to higher tax losses,the derecognition of deferred tax credits booked on impairments, retrenchment and silicosis provisionsassets in South Africa during the fourth quarter of 2020.
Discontinued operations
A profit from discontinued operations of $7 million was recorded in 2020, compared to a loss of $376 million in 2019, which were partially offset by therepresents a $383 million increase. The profit of $7 million consists of an operating loss after tax of $9 million and an impairment reversal of certain capital uplift allowances at First Uranium (in$16 million. The South Africa) relatingAfrican operations have been accounted for as discontinued operations. Refer to prior years.“Item 18: Financial Statements—Note 9—Discontinued operations and assets and liabilities held for sale” for further details.
Comparison of financial performance in 20162019 with 20152018
Our gold income is only materially impacted by price and volume variances. All of our costs are impacted by the consequences of average exchange rate movements.
Revenue from product sales increased by $189 million, or six percent, from $3,336 million in 2018 to $3,525 million in 2019, mainly as a result of the increase in the average gold price received of $128 per ounce. Gold income increased by $70$236 million, or twoseven percent, from $4,015$3,203 million in 20152018 to $4,085$3,439 million in 2016. This increase was2019, due to the increase in the average gold price received partially offset by the decrease in gold sold. Gold sold decreased by 50,000 ounces, or two percent, from 2.46 million
137
ounces in 2018 to 2.41 million ounces in 2019. The average gold price received increased by $128 per ounce, or eightten percent, from $1,158$1,266 per ounce during 20152018 to $1,249$1,394 per ounce in 2016. The increase in the price of gold2019, which resulted in an increase in gold income of $299$316 million. By-product revenue decreased by $47 million, or 35 percent, to $86 million from $133 million in 2018, mainly due to a decrease in revenue from silver.
Revenue from product sales from the Africa operations increased by $185 million, or 13 percent, to $1,590 million in 2019 from $1,405 million in 2018, mainly as a result of the increase in the average gold price received, which resulted in an increase of gold income of $140 million. The increase in gold ounces sold resulted in an increase in gold income of $47 million. The increase was mainly due to the transition to predominantly underground operations which resulted in higher grade material and increased tonnes treated at Geita and improved production at Iduapriem due to the Operational Excellence programme which focused on improved grade control practices. The increase in production was partially
offset by a 270,000 ouncedecrease at Siguiri due to the integration of the CIL combination plant that was completed during the year and a slower ramp-up than anticipated.
Revenue from product sales from Australia increased by $72 million, or nine percent, from $782 million in 2018 to $854 million in 2019. The increase in the average gold price received resulted in an increase in gold income of $78 million. Gold production decreased as a result of lower mill feed grades due to lower underground mined volume combined with lower mined grade at Sunrise Dam. The decrease in production was partially offset by an increase at Tropicana as a result of higher mill throughput and tonnes mined. The decrease in gold ounces sold resulted in a decrease in gold income of $8 million.
Revenue from continuingproduct sales from the Americas operations decreased by $68 million, or six percent, from $1,149 million in 2018 to $1,081 million in 2019. Gold income decreased by $21 million, or two percent, from $1,021 million in 2018 to $1,000 million in 2019.The decrease was due to a decrease of 78,000 ounces in gold sold in 2019, which resulted in a decrease in gold income of $229$113 million.
Gold income from the South African operations in 2016 increasedproduction primarily decreased at Cerro Vanguardia mainly due to development and infrastructure constraints, coupled with lower grades. The decrease was partially offset by $41 million, or four percent, to $1,173 million from $1,132 million in 2015, mainly as a result of thean increase in the average gold price received which resulted in an increase in gold income of $87$92 million. The increase was partially offsetBy-product revenue decreased by $47 million, or 37 percent, to $81 million from $128 million in 2018, mainly due to a decrease in gold soldrevenue from silver.
Cost of 40,000 ounces, primarily assales
Cost of sales increased from $2,584 million in 2018 to $2,626 million in 2019, which represents a result of safety stoppages and lower grades at Tau Tona and Kopanang, which accounted for $46 million of the decrease.
In Africa, cost of sales increased from $1,127 million in 2018 to $1,173 million in 2019, which represents a $46 million, or four percent, increase. The $49increase was mainly due to an increase in royalties, rehabilitation and other non-cash costs, amortisation and inventory change.
In Australia, cost of sales increased from $622 million decrease in cash operating costs from $2,4932018 to $632 million in 2019, which represents a $10 million, or two percent, increase. The increase was mainly due to $2,444 million, was primarily due the weaknessan increase in local currenciesamortisation and inventory change. The increase was partially offset by inflationary increases. By-product revenue increased due to higher volumes sold as well as higher average prices received for silver.a decrease in service-related costs and the weakening of the Australian dollar against the US dollar.
In South Africathe Americas, cost of sales decreased from $1,083$838 million in 20152018 to $1,041$822 million in 2016,2019, which represents a $42$16 million, or fourtwo percent, decrease. The decrease was mainly due to the weakening of the rand, which was partially offsetlocal currencies, the Argentinian peso by an increase in production72 percent and the Brazilian real by eight percent, against the US dollar.
Total cash costs in the local currency.
Royalties,, which are generally calculated as a percentage of revenue, increased from $100$133 million in 20152018 to $105$137 million in 2016,2019, which represents a $4 million, or three percent, increase, primarily due to an increase in the spot gold prices and an increase in production at Geita and Iduapriem partially offset by a decrease in production.production in Argentina.
Retrenchment costs
Retrenchment costs included in cost of sales remained unchanged in 2019 at $4 million as in 2018.
138
Rehabilitation and other non-cash costs
Environmental rehabilitation and other non-cash costs increased from $11$17 million in 20152018 to $14$53 million in 2016,2019, which represents a $3$36 million increase. This increase as compared to 2018 was primarily due to a change in discount rates due to changes in global economic assumptions, changes in mine plans resulting in a change in cash flows, changes in design of tailings storage facilities in Brazil due to new requirements being considered and enacted or formalized in 2019, and changes in the methodology used to calculate such estimates in response to comments from environmental regulatory authorities.
Amortisation of tangible, intangible and right of use assets
Amortisation of tangible, intangible and right of use assets expense increased from $558 million in 2018 to $583 million in 2019, which represents a $25 million, or 27four percent, increase. Retrenchment costs recorded forAmortisation of tangible assets decreased by $15 million, or three percent, from $553 million in 2018 to $538 million in 2019, largely due to lower production at Cerro Vanguardia, lower depreciation on the year ended 31 December 2016 resulted fromwaste stripping asset as the rationalisationopen pit ore is being depleted, lower depreciation on the mining fleet due to a change in fleet management strategy at Geita and lower production at Serra Grande. The decrease was partially offset by an increase in amortisation at Iduapriem due to completion of operationsthe stripping activities in the South African region2019.
Amortisation relating to right of use assets as recognised in accordance with IFRS 16 Leases (effective from 1 January 2019) was $42 million in 2019. Amortisation relating to right of use assets was $18 million at Geita, $16 million at the Australian operations and $6 million at Córrego do Sítio.
Inventory change
Inventory decreased from $9 million in 2018 to $5 million in 2019, which represents a $4 million, or 44 percent decrease.
Other expenses
Other expenses increased from $79 million in 2018 to $83 million in 2019, which represents a $4 million, or five percent, increase. The increase was largely due to an increase in government fiscal claims, cost of tailing operations and other expenses, care and maintenance costs and the public infrastructure contribution in Guinea. The increase was partially offset by a decrease in the South American region.corporate retrenchments and power grid refunds in Brazil.
Finance costs and unwinding of obligations
Finance costs decreasedincreased by $65$3 million, or 29two percent, to $158$143 million in 2016,2019, compared to $223$140 million in 2015. The decrease was2018 mainly due to a reductionthe effect of $65 million of interest attributable to the redeemed $1.25 billion 8.5 percent bond issued in July 2013.IFRS 16 Leases (effective from1 January 2019) on finance costs partially offset by lower finance costs from borrowings. Unwinding of obligations expense of $22$29 million was recorded in 20162019 compared with $22$28 million in 2015.2018.
Share of associates and joint ventures'ventures’ profit
Share of associates and joint ventures'ventures’ profit decreasedincreased by $46 million, or 38 percent, to $11a profit of $168 million in 20162019, compared to $88a profit of $122 million in 2015,2018, mainly as a result of the decrease in operating profits due to an increase in operating costs and a decrease in revenue due to lower production partially offset by an increase in the gold price received. Net impairments reversals decreased to $6equity earnings of $39 million in 2016 from $24 million in 2015.at Kibali.
Taxation
A taxation expense of $189$250 million was recorded in 2016,2019, compared to an expense of $211$212 million in 2015.2018, which represents a $38 million, or 18 percent, increase. Charges for current tax in 20162019 amounted to $234$298 million, compared to $192$242 million in 2015.2018, which represents a $56 million, or 23 percent, increase. The increase in current tax is mainly due to higher current taxearnings in Argentina, GhanaAustralia, Tanzania and Guinea based on higher earnings.Ghana. Charges for deferred tax in 20162019 amounted to a net deferred tax benefit of $45$48 million, compared to a net deferred tax expensebenefit of $19$30 million in 2015.2018, which represents a $18 million, or 60 percent, increase. The decreaseincrease in the deferred taxation is largely duebenefit mainly relates to foreign exchange effects on the translation of non-monetary itemshigher capital expenditure in BrazilTanzania and Argentina and adjustments on taxable items in North America and Australia, partly offset by an increase inhigher estimated deferred tax resets in Guinea (related to a tax holiday agreement from 2020).
Discontinued operations
A loss from discontinued operations of $376 million was recorded in 2019, compared to a loss of $83 million in 2018, which represents a $293 million increase. The loss of $376 million consists of an operating profit after tax of $9 million and an impairment loss of $385 million. The South Africa.African operations have been accounted for as discontinued operations. Refer to “Item 18: Financial Statements—Note 9—Discontinued operations and assets and liabilities held for sale” for further details.
The following table presents capital expenditure data from continuing operations for the AngloGold Ashanti group for the three-year period ended 31 December 2017:2020:
139
| Capital expenditure data for AngloGold Ashanti | Year ended December 31 | Capital expenditure data for AngloGold Ashanti | Year ended 31 December | ||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | |||||||||||||||||||||||||||
| Capital expenditure (million US dollars) | 953 | 811 | 857 | ||||||||||||||||||||||||||
| (in $ millions) | (in $ millions) | 2020 | 2019 | 2018 | |||||||||||||||||||||||||
| Capital expenditure | Capital expenditure | 757 | 754 | 645 | |||||||||||||||||||||||||
| - Consolidated entities | 830 | 711 | 726 | - Consolidated entities | 701 | 703 | 576 | ||||||||||||||||||||||
| - Equity accounted joint ventures | 123 | 100 | 131 | - Equity accounted joint ventures | 56 | 51 | 69 | ||||||||||||||||||||||
Total capital expenditure was $953$757 million in 20172020, compared to $811$754 million in 2016.2019. This represents a $142$3 million increase from 2019. This increase is due to increased expenditure on existing operations ($9 million) and partly offset by reduced capital expenditure on project capital ($6 million). Capital expenditure increased at Iduapriem in Ghana by $44 million from $16 million in 2019 to $60 million in 2020 due to higher pre-stripping activities and stay-in-business capital. Capital expenditure increased at Siguiri in Guinea by $8 million from $22 million in 2019 to $30 million in 2020 to resolve the current recovery and throughput challenges of the newly commissioned plant. Capital expenditure increased at Geita in Tanzania by $12 million from $75 million in 2019 to $87 million in 2020 mainly due to increased Ore Reserve development expenditure due to more underground activities and more exploration work done in 2020. Capital expenditure increased at Sunrise Dam in Australia by $10 million from $43 million in 2019 to $53 million in 2020, mainly due to increased Ore Reserve development expenditure in new mining areas, asset integrity and start of the Golden Delicious open pit growth project. Capital expenditure increased at AGA Mineração in Brazil by $12 million from $91 million in 2019 to $103 million in 2020, mainly due to increased Ore Reserve development expenditure and spend on tailings storage facilities. Capital expenditure increased by $4 million at Quebradona in Colombia from $36 million in 2019 to $40 million in 2020, due to increased capitalisation of land for the growth project. Capital expenditure increased by $8 million at Gramalote in Colombia from $1 million in 2019 to $9 million in 2020, due to increased spend on feasibility study costs of the growth project. Capital expenditure decreased by $78 million at Obuasi in Ghana from $246 million in 2019 to $168 million in 2020, due to the commissioning of phase 1 of the redevelopment project on 1 October 2020, capitalisation of pre-production gold revenue against the project and delays as a result of COVID-19. Capital expenditure decreased by $17 million at Tropicana from $106 million in 2019 to $89 million in 2020, due to lower deferred stripping, partly offset by higher pre-stripping capital and spend on the Boston Shaker growth project.
Total capital expenditure was $754 million in 2019, compared to $645 million in 2018. This represents a $109 million, or 1817 percent, increase from 2016.2018. This increase is due to increased capital expenditure on existing operations ($134 million) and on growth related projects ($8161 million) partially offset by decreased expenditure on existing operations ($52 million). Capital expenditure increased by $198 million at IduapriemObuasi in Ghana from $48 million in 2018 to $246 million in 2019, due to significant project ramp up in 2019 compared to 2018 in the areas of mining fleet acquisition and underground mining development related costs, processing plant refurbishment and upgrade, surface and underground infrastructure, project team and owner cost and pre-production capital. Capital expenditure increased by $43$30 million at Tropicana in Australia from $76 million in 2018 to $106 million in 2019, due to pre-stripping andexpenditure at Tropicana’s Boston Shaker 4 due to a shift in mining activity. Capital expenditure increased by $29 million at Quebradona in Colombia from $7 million in 2018 to $36 million in 2019, due to feasibility study costs of the plant recovery improvement project. Capital expenditure increased by $16 million at Geita by $38in Tanzania from $59 million duein 2018 to establishment of underground and ore reserve development partially offset by stripping due to pit depletion. Capital expenditure increased at Sunrise Dam,$75 million in Australia, by $30 million due to continued underground ore reserve development. Capital expenditure increased at Siguiri by $23 million due to the combination plant, infill drilling and overland land conveyor belt replacement. Capital expenditure increased at Kibali, in the DRC, by $18 million due to plant upgrade with four ultra-fine grind mills and Hydro power plant and increased stripping. Capital expenditure increased at Tropicana, in Australia, by $15 million2019, due to an increase in deferred waste stripping. Capital expenditure increased by $14 million at Córrego do Sítío due to the raising of the tailings dam, an increase in stay in business spendingOre Reserve development capital, underground infrastructure development, and exploration. The strengthening of local currencies against the US dollar also resulted in an increase ofhigher other sustaining capital expenditure.as underground activities ramp up. The increase in capital expenditure was partially offset by a decrease of $32decreased expenditure at Siguiri in Guinea by $74 million from $96 million in South Africa2018 to $22 million in 2019, due to the completion and commissioning of the CIL combination plant in early 2019. Capital expenditure on Kopanang, Tau Tona, West gold plant, ATIC and directly associated services projects, expenseddecreased at Sunrise Dam in Australia by $36 million from July 2017 and capital rationing and postponement of Mponeng Mine Life Extension.
140
Table of the local currency against the US dollar. Capital expenditure increased by $10 million at Serra Grande due to increased ore reserve development and the conversion of the leaching process, partially offsetContents
Comparison of financialoperating performance on a segment basis for 2017, 20162020, 2019 and 20152018
The company produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments. Therefore, information regarding separate geographic segments is provided.
Gold income
| (in millions) | Year ended 31 December | ||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||
| $ | percent | $ | percent | $ | percent | ||||||||||||||||||||||||||||||
| Geographical analysis of gold income by origin is as follows: | |||||||||||||||||||||||||||||||||||
| Africa | 2,769 | 58 | 2,203 | 55 | 1,983 | 52 | |||||||||||||||||||||||||||||
| Australia | 989 | 21 | 851 | 21 | 780 | 20 | |||||||||||||||||||||||||||||
| Americas | 1,211 | 26 | 1,000 | 25 | 1,021 | 27 | |||||||||||||||||||||||||||||
| 4,969 | 4,054 | 3,784 | |||||||||||||||||||||||||||||||||
| Less : Associates and equity-accounted joint ventures included above | (647) | (14) | (615) | (15) | (581) | (15) | |||||||||||||||||||||||||||||
| Continuing operations | 4,322 | 3,439 | 3,203 | ||||||||||||||||||||||||||||||||
| Discontinued operations | 408 | 9 | 554 | 14 | 602 | 16 | |||||||||||||||||||||||||||||
| 4,730 | 100 | 3,993 | 100 | 3,805 | 100 | ||||||||||||||||||||||||||||||
| (in millions) | Year ended 31 December | ||||||||||||||||
| 2017 | 2016 | 2015 | |||||||||||||||
| $ | percent | $ | percent | $ | percent | ||||||||||||
| Geographical analysis of gold income by origin is as follows: | |||||||||||||||||
| South Africa | 1,101 | 25 | 1,173 | 29 | 1,132 | 27 | |||||||||||
| Continental Africa | 1,895 | 44 | 1,663 | 41 | 1,724 | 42 | |||||||||||
| Australasia | 709 | 16 | 646 | 16 | 666 | 16 | |||||||||||
| Americas | 1,104 | 25 | 1,036 | 25 | 967 | 23 | |||||||||||
| 4,809 | 4,518 | 4,489 | |||||||||||||||
| Less : Associates and equity accounted joint ventures included above | (453 | ) | (10 | ) | (433 | ) | (11 | ) | (474 | ) | (11 | ) | |||||
| Continuing operations | 4,356 | 4,085 | 4,015 | ||||||||||||||
| Discontinued operations | — | — | — | — | 137 | 3 | |||||||||||
| 4,356 | 100 | 4,085 | 100 | 4,152 | 100 | ||||||||||||
Assets
| (in millions) | Year ended 31 December | ||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||
| $ | percent | $ | percent | $ | percent | ||||||||||||||||||||||||||||||
| Geographical analysis of assets by origin is as follows: | |||||||||||||||||||||||||||||||||||
| South Africa | — | — | 697 | 10 | 1,106 | 17 | |||||||||||||||||||||||||||||
| Africa | 3,956 | 51 | 3,514 | 51 | 3,135 | 47 | |||||||||||||||||||||||||||||
| Australia | 1,044 | 14 | 972 | 14 | 888 | 13 | |||||||||||||||||||||||||||||
| Americas | 1,626 | 21 | 1,427 | 21 | 1,286 | 19 | |||||||||||||||||||||||||||||
| Other, including non-gold producing subsidiaries | 1,046 | 14 | 253 | 4 | 228 | 4 | |||||||||||||||||||||||||||||
| Total assets | 7,672 | 100 | 6,863 | 100 | 6,643 | 100 | |||||||||||||||||||||||||||||
| (in millions) | Year ended 31 December | |||||||||||||
| 2017 | 2016 | 2015 | ||||||||||||
| $ | percent | $ | percent | $ | percent | |||||||||
| Geographical analysis of assets by origin is as follows: | ||||||||||||||
| South Africa | 1,734 | 24 | 1,818 | 26 | 1,629 | 22 | ||||||||
| Continental Africa | 3,153 | 44 | 3,090 | 43 | 3,121 | 43 | ||||||||
| Australasia | 929 | 13 | 804 | 11 | 837 | 12 | ||||||||
| Americas | 1,258 | 17 | 1,273 | 18 | 1,341 | 18 | ||||||||
| Other, including non-gold producing subsidiaries | 145 | 2 | 168 | 2 | 356 | 5 | ||||||||
| Total assets | 7,219 | 100 | 7,153 | 100 | 7,284 | 100 | ||||||||
At 31 December 2017, 242020, none of AngloGold Ashanti’s total assets were located in South Africa compared with ten percent at the end of 2019 due to the South African producing assets and related liabilities being sold to Harmony. The remaining operations collectively accounted for approximately 100 percent of AngloGold Ashanti’s total assets at 31 December 2020 compared to 90 percent at the end of the same period in 2019.
At 31 December 2019, ten percent of AngloGold Ashanti’s total assets were located in South Africa compared with 2617 percent at the end of 2016.2018. The remaining operations collectively accounted for approximately 7690 percent of AngloGold Ashanti’s total assets at 31 December 20172019 compared to 7483 percent at the end of the same period in 2016.2018.
Non-GAAP analysis
During June 2013,2018, the World Gold Council (WGC), an industry body, published aan updated Guidance Note on “all-in sustaining costs” and “all-in costs” metrics, which gold mining companies can use to supplement their overall non-GAAP disclosure. The WGC worked closely with its members (including AngloGold Ashanti) to develop these non-GAAP measures which are intended to provide further transparency into the full cost associated with producing gold. It is expected that these metrics, in particular, the “all-in sustaining cost” and “all-in cost” metrics which AngloGold Ashanti provides in this annual report on Form 20-F, will be helpful to investors, governments, local communities and other stakeholders in understanding the economics of gold mining. “All-in sustaining costs” is a non-GAAP measure which is an extension of the existing “total cash cost”costs net of by-product revenue” metric and incorporates all costs related to sustaining production and in particular, recognises the sustaining capital expenditures associated with developing and maintaining gold mines. In addition, this metric includes the cost associated with Corporate Office structures that support these operations, the community and environmental rehabilitation costs attendant with responsible mining and any exploration and evaluation cost associated with sustaining current operations. “All-in sustaining costs per ounce” is arrived at by dividing the dollar value of the sum of thesethis cost metrics,metric by the ounces of gold sold. “All-in cost” includes
141
costs” is a non-GAAP measure comprising “all-in sustaining costs” including additional costs which reflect the varying costs of producing gold over the life-cycle of a mine including costs incurred at new operations and costs related to major projects at existing operations, which are expected to increase production. “All-in costcosts per ounce” is arrived at by dividing the dollar value of the sum of thesethis cost metrics,metric by the ounces of gold sold.
Total cash costs arenet of by-product revenue
“Total cash costs net of by-product revenue” is calculated in accordance with the guidelines of the Gold Institute industry standard and industry practice and areis a non-GAAP measures.measure. The Gold Institute, which has been incorporated into the National Mining Association, is a non-profit international association of miners, refiners, bullion suppliers and manufacturers of gold products, which developed a uniform format for reporting total cash costs on a per ounce basis. The guidance was first adopted in 1996 and revised in November 1999.
“Total cash costs net of by-product revenue” as calculated and reported by AngloGold Ashanti include costs for all mining, processing, onsite administration costs, royalties and production taxes, as well as contributions from by-products, but exclusive of amortisation of tangible, intangible and intangibleright of use assets, rehabilitation costs and other non-cash costs, retrenchment costs, corporate administration, marketing and other costs, capital costs and exploration costs. Total“Total cash costs per ounce areounce” is calculated by dividing attributable total cash costs net of by-product revenue by attributable ounces of gold produced.
Average gold price received per ounce
“Average gold price received per ounce” is a non-GAAP measure which gives an indication of revenue earned per unit of gold sold and includes gold income and realised non-hedge derivatives in its calculation and serves as a benchmark of performance against the market spot price of gold. This metric is calculated by dividing attributable gold income (price received) by attributable ounces of gold sold.
“All-in sustaining costs, all-incosts”, “all-in sustaining costs per ounce, all-in costs, all-inounce”, “all-in costs”, “all-in costs per ounce, totalounce”, “total cash costs and totalnet of by-product revenue”, “total cash costs per ounceounce” and “average gold price received per ounce” should not be considered by investors in isolation or as alternatives to cost of sales, profit/(loss) applicable to equity shareholders, profit/(loss) before taxation, cash flows from operating activities or any other measure of financial performance presented in accordance with IFRS or as an indicator of the company’s performance. While the WGC has published guidance on how to define all-in“all-in sustaining costscosts” and all-in costs“all-in costs” and the Gold Institute has provided definitions for the calculation of total“total cash costs per ounce”, the calculation of these metrics may vary significantly among gold mining companies, and by themselves do not necessarily provide a basis for comparison with other gold mining companies.
However, AngloGold Ashanti believes that all-in“all-in sustaining costs, all-in costscosts”, “all-in costs” and total“total cash costs net of by-product revenue” in total by mine and per ounce by mine as well as “average gold price received per ounce”, are useful indicators to investors and management as they provide:
•an indication of profitability, efficiency and cash flows;
•the trend in costs as the mining operations mature over time on a consistent basis; and
•an internal benchmark of performance to allow for comparison against other mines, both within the AngloGold Ashanti group and at other gold mining companies.
Reconciliations
A reconciliation of gold income as included in the company’s audited financial statements to “average gold price received per ounce” for each of the three years in the period ended 31 December 2020 is presented on a total basis in the table below.
| Average gold price received per ounce for AngloGold Ashanti | Year ended 31 December | ||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Gold income (million US dollars) | 4,322 | 3,439 | 3,203 | ||||||||||||||
| Adjusted for non-controlling interests (million US dollars) | (95) | (77) | (84) | ||||||||||||||
| 4,227 | 3,362 | 3,119 | |||||||||||||||
| Associates and joint ventures' share of gold income including realised non-hedge derivatives (million US dollars) | 647 | 615 | 581 | ||||||||||||||
| Attributable gold income (million US dollars) | 4,874 | 3,977 | 3,700 | ||||||||||||||
| Attributable gold sold excluding pre-production ounces - oz (000) | 2,741 | 2,852 | 2,922 | ||||||||||||||
| Average gold price received per ounce ($/oz) | 1,778 | 1,394 | 1,266 | ||||||||||||||
142
A reconciliation of both cost of sales and total cash costs as included in the company’s audited financial statements to all-in“all-in sustaining costs”, “all-in sustaining costs all-inper ounce”, “all-in costs”, “all-in costs and totalper ounce”, “total cash costs net of by-product revenue” and “total cash costs per ounce” for each of the three years in the period ended 31 December 20172020 is presented on a total and segment basis in the tables below. In addition, the company has provided below detail of the attributable ounces of gold produced and sold by mine for each of those periods.periods below.
The following table presents selected total operating data from continuing operations for the AngloGold Ashanti group for the three-year period ended 31 December 2017:2020
| Operating data for AngloGold Ashanti | Year ended December 31 | |||||||
| 2017 | 2016 | 2015 | ||||||
Total cash costs (million US dollars) – per financial statements(1) | 2,709 | 2,435 | 2,493 | |||||
All-in sustaining costs ($/oz) - Subsidiaries(2) | 1,050 | 990 | 935 | |||||
All-in sustaining costs ($/oz) - Joint Ventures(2) | 1,087 | 955 | 704 | |||||
All-in costs ($/oz) - Subsidiaries(2) | 1,119 | 1,063 | 1,003 | |||||
All-in costs ($/oz) - Joint Ventures(2) | 1,186 | 1,141 | 989 | |||||
Total cash costs ($/oz) - Subsidiaries(2) | 789 | 737 | 719 | |||||
Total cash costs ($/oz) - Joint Ventures(2) | 819 | 812 | 655 | |||||
| Operating data for AngloGold Ashanti operations - Total | Year ended 31 December | ||||||||||||||||
(continuing operations) | 2020 | 2019 | 2018 | ||||||||||||||
| Cost of sales (million US dollars) - Subsidiaries | 2,699 | 2,626 | 2,584 | ||||||||||||||
| Cost of sales (million US dollars) - Joint Ventures | 340 | 428 | 480 | ||||||||||||||
All-in sustaining costs per ounce ($/oz) - Subsidiaries(1) | 1,072 | 1,017 | 970 | ||||||||||||||
All-in sustaining costs per ounce ($/oz) - Joint Ventures(1) | 810 | 767 | 820 | ||||||||||||||
All-in costs per ounce ($/oz) - Subsidiaries(1) | 1,240 | 1,218 | 1,075 | ||||||||||||||
All-in costs per ounce ($/oz) - Joint Ventures(1) | 824 | 785 | 846 | ||||||||||||||
Total cash costs per ounce ($/oz) - Subsidiaries(1) | 815 | 763 | 743 | ||||||||||||||
Total cash costs per ounce ($/oz) - Joint Ventures(1) | 629 | 657 | 680 | ||||||||||||||
per ounce” are non-GAAP measures. For a detailed reconciliation of all-in“all-in sustaining costs all-inper ounce”, “all-in costs per ounce” and total“total cash costs see “Operations” tables.per ounce” for the company’s total operations for each of the three years in the period ended 31 December 2020, refer to the relevant “AngloGold Ashanti operations - Total” tables below.
Comparison of all-in sustainingoperating performance on a segment basis in 2020 with 2019
Cost of sales
In Africa - Subsidiaries, cost of sales increased by $59 million, or five percent, to $1,232 million in 2020 from $1,173 million in 2019. The increase was mainly due to an increase in labour and contractor costs, consumable stores, COVID-19 pandemic related spend, royalties, amortisation, and services and other charges, partly offset by lower fuel costs and ore stockpile adjustments. In Guinea, at Siguiri, cost of sales increased by $62 million, or 20 percent, to $377 million in 20172020 from $315 million in 2019. In Ghana, at Obuasi, the Obuasi redevelopment project was commissioned during 2020 incurring cost of sales of $34 million in 2020, from $nil in 2019. In Tanzania, at Geita, cost of sales decreased by $29 million, or five percent, to $542 million in 2019 from $571 million in 2019. In Ghana, at Iduapriem, cost of sales decreased by $8 million, or three percent, to $280 million in 2020 from $288 million in 2019.
In Africa - Joint Ventures, cost of sales decreased by $88 million, or 21 percent, to $340 million in 2020 from $428 million in 2019. The decrease was mainly due to the Sadiola and Morila operations reaching the end of their operating lives and the incurrence of $90 million cost of sales during 2019 which was not repeated in 2020. On 10 November 2020, AngloGold Ashanti together with 2016its joint venture partner Barrick completed the sale of the Morila gold mine in Mali to Firefinch Limited. On 30 December 2020, AngloGold Ashanti together with its joint venture partner IAMGOLD completed the sale of the Sadiola gold mine in Mali to Allied Gold. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Mali”. In the DRC, at Kibali, cost of sales increased by $2 million, or 0.5 percent, to $340 million in 2020 from $338 million in 2019.
In the Americas, cost of sales decreased by $58 million, or seven percent, to $764 million in 2020 from $822 million in 2019. The decrease was mainly due to the weakening of the local currencies against the US dollar, decrease in rehabilitation and other non-cash costs and lower fuel costs, partly offset by increase in contractor costs and COVID-19 pandemic related spend. The Argentinian peso weakened by 46 percent and the Brazilian real weakened by 31 percent, against the US dollar. In Brazil, at AngloGold Ashanti Córrego do Sítio Mineração, cost of sales decreased by $26 million, or six percent, to $391 million in 2020 from $417 million in 2019. At Serra Grande, cost of sales decreased by $28 million, or 22 percent, to $102 million in 2020 from $130 million in 2019. In Argentina, at Cerro Vanguardia, cost of sales decreased by $5 million, or two percent, to $269 million in 2020 from $274 million in 2019. In the Americas other segment, cost of sales increased by $1 million, or 100 percent, to $2 million in 2020 from $1 million in 2019.
In Australia, cost of sales increased by $73 million, or 12 percent, to $705 million in 2020 from $632 million in 2019. The increase was mainly due to an increase in labour and contractor costs, consumable stores, royalties, COVID-19 pandemic related spend, services and other charges, and ore stockpile adjustments, partly offset by lower fuel costs, amortisation and the weakening of the Australian dollar against the US dollar. At Sunrise Dam, cost of sales increased by $24 million, or eight percent, to $342 million in 2020 from $318 million in 2019. At Tropicana, cost of sales increased by $41 million, or 14 percent, to $338 million in 2020 from $297 million in 2019.
143
Overall the subsidiaries’ cost of sales increased from $2,626 million in 2019 to $2,699 million in 2020, which represents a $73 million, or three percent increase. The increase was primarily due to an increase in cash operating costs by $50 million, or three percent, to $1,881 million in 2020 from $1,831 million in 2019 and an increase in royalties paid by $44 million, or 32 percent, to $181 million in 2020 from $137 million in 2019, partly offset by a decrease in rehabilitation and other non-cash costs by $21 million, or 40 percent, to $32 million in 2020 from $53 million in 2019. The increase in cash operating costs is due to higher labour and contractor costs, consumable stores, COVID-19 pandemic related spend, services and other charges, partly offset by lower fuel and power costs. The decrease in rehabilitation and other non-cash costs arose from the changes to restoration provision cash flows, inflation rates and discount rates compared to 2019.
All-in sustaining costs per ounce (excluding stockpile impairments) in South Africa increased in 2017 by $164 per ounce, or 15 percent, to $1,245 per ounce from $1,081 per ounce in 2016. The increase was as a result of the strengthening of the rand, increase in cost of sales and the 61,000-ounce decrease in gold sold (excluding pre-production ounces).
In Continental Africa - Subsidiaries, all-in sustaining costs (excluding stockpile impairments) increased by $23$28 per ounce, or three percent, to $909$975 per ounce in 20172020 from $886$947 per ounce in 2016.2019. This increase was mainly due to an increase in cost of sales anat Siguiri due to the increase in sustaininghard rock processing capability which resulted in a higher plant throughput during 2020. The higher plant throughput has been partly offset by lower than planned recovery rate from high levels of carbon in the ore affecting the capacity to recover gold. This led to higher processing costs year-on-year as a result of higher reagent consumption. The increase was partly offset by lower cost of sales at Geita driven by a build-up of ore stockpiles and lower mining costs, boosted by the move to owner mining. During 2020, the Obuasi redevelopment project was commissioned with higher level of sales as the project continued to ramp-up. Capital expenditure increased at Iduapriem due to higher pre-stripping activities and stay-in-business capital, expenditureat Siguiri to resolve the current recovery and throughput challenges of the newly commissioned plant, at Geita due to increased spending at IduapriemOre Reserve development expenditure as a result of more underground activities and Geita underground development.more exploration work done in 2020. The increase in all-in sustaining costshigher cost of sales and capital spend was partiallypartly offset by a 149,000-ouncean increase in gold sold (excluding pre-production ounces). of 59,000 ounces, or five percent, from 1,096,000 ounces in 2019 to 1,155,000 ounces in 2020, mainly due to the transition to predominantly underground operations which resulted in increased tonnes treated at Geita and the commissioning of the redevelopment project at Obuasi.
In Continental Africa - Joint Ventures, all-in sustaining costs (excluding stockpile impairments) increased by $132$43 per ounce, or 14six percent, to $1,087$810 per ounce in 20172020 from $955$767 per ounce in 2016.2019. This increase was mainly due to an increase in cost of sales, lower amortisation and an increase in sustaining capital expenditure dueat Kibali and gold sold decreased by 77,000 ounces, or 17 percent, from 442,000 ounces in 2019 to increased spending on Kibali as it moves underground. The increase365,000 ounces in all-in sustaining costs was partially offset by a 15,000-ounce increase2020. During 2020, the Sadiola and Morila operations reached the end of their operating lives and recorded no cost of sales and no gold sales. On 10 November 2020, AngloGold Ashanti together with its joint venture partner Barrick completed the sale of the Morila gold mine in Mali to Firefinch Limited. On 30 December 2020, AngloGold Ashanti together with its joint venture partner IAMGOLD completed the sale of the Sadiola gold sold.mine in Mali to Allied Gold. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Mali”.
In the Americas, all-in sustaining costs (excluding stockpile impairments) increaseddecreased by $68$29 per ounce, or eightthree percent, to $943$1,003 per ounce in 20172020 from $875$1,032 per ounce in 2016.2019. This decrease was mainly due to the weakening of the local currencies against the US dollar, decrease in rehabilitation and other non-cash and lower fuel costs, partly offset by an increase in contractor costs, COVID-19 pandemic related spend, increased capital expenditure at AGA Mineração mainly due to increased Ore Reserve development expenditure and spend on tailings storage facilities. Gold sold decreased by 36,000 ounces in 2020, as compared to 2019, mainly due to lower gold sold at Cerro Vanguardia and Serra Grande.
In Australia, all-in sustaining costs increased by $235 per ounce, or 24 percent, to $1,225 per ounce in 2020 from $990 per ounce in 2019. This increase was mainly due to an increase in costscost of sales at Sunrise Dam and Tropicana, partly offset by lower sustaining capital expenditure at Tropicana. Gold sold decreased by 57,000 ounces in 2020, as compared to 2019, mainly due to lower gold sales at Tropicana.
All-in costs per ounce
In Africa - Subsidiaries, all-in costs decreased by $88 per ounce, or seven percent, to $1,149 per ounce in 2020 from $1,237 per ounce in 2019. This decrease was mainly due to lower growth capital spend at Obuasi and revenue from pre-production gold sold capitalised against the project, and the commissioning of the Obuasi redevelopment project during 2020, partly offset by an increase in all-in sustaining costs at Siguiri. Gold sold increased by 59,000 ounces, in 2020, as compared to 2019, mainly due to the transition to predominantly underground operations which resulted in increased tonnes treated at Geita and commissioning of the redevelopment project at Obuasi.
In Africa - Joint Ventures, all-in costs increased by $39 per ounce, or five percent, to $824 per ounce in 2020 from $785 per ounce in 2019. This increase was mainly due to an increase in all-in sustaining costs and a decrease in gold sold of 77,000 ounces, or 17 percent, from 442,000 ounces in 2019 to 365,000 ounces in 2020.
In the Americas, all-in costs decreased by $4 per ounce to $1,179 per ounce in 2020 from $1,183 per ounce in 2019. This decrease was mainly due to a decrease in all-in sustaining costs and a decrease in corporate and social responsibility costs not related to current operations, partly offset by an increase in growth capital spend at the Colombia projects. Gold sold decreased by 36,000 ounces in 2020, as compared to 2019, mainly due to lower gold sold at Cerro Vanguardia and Serra Grande.
144
In Australia, all-in costs increased by $284 per ounce, or 26 percent, to $1,356 per ounce in 2020 from $1,072 per ounce in 2019. This increase was mainly due to an increase in all-in sustaining costs and non-sustaining exploration and study costs relating to growth deposits at Sunrise Dam. Gold sold decreased by 57,000 ounces, in 2020, as compared to 2019, mainly due to lower gold sales at Tropicana.
Total cash costs per ounce
The currencies of Argentina, Australia and Brazil were, on average, weaker against the US dollar during 2020 as compared to 2019, which positively impacted total cash costs per ounce for 2020.
In Africa - Subsidiaries, total cash costs per ounce decreased by $4, or 0.5 percent, to $797 per ounce in 2020 from $801 per ounce in 2019. The decrease was mainly due to a 52,000-ounce increase in production (excluding pre-production ounces). The decrease was partially offset by an increase in total cash costs.
In Tanzania, at Geita, total cash costs per ounce decreased by $54, or eight percent, to $641 per ounce in 2020 from $695 per ounce in 2019. The decrease was mainly due to a decrease in total cash costs and a 19,000 ounce increase in production.
In Ghana, at Iduapriem, total cash costs per ounce decreased by $84, or ten percent, to $731 per ounce in 2020 compared to $815 per ounce in 2019 due to a decrease in total cash costs, production during 2020 remained consistent with the prior year's production at 275,000 ounces. At Obuasi, the Obuasi redevelopment project was commissioned during 2020 with total cash costs per ounce of 47,000$1,145 and 30,000 ounces production.
In Guinea, at Siguiri, total cash costs per ounce increased by $202, or 19 percent, to $1,293 per ounce in 2020 from $1,091 per ounce in 2019 mainly due to an increase in total cash costs, partly offset by a 2,000-ounce increase in production.
In Africa - Joint Ventures, total cash costs per ounce decreased by $28, or four percent, to $629 per ounce in 2020 from $657 per ounce in 2019. The decrease was mainly due to a decrease in total cash costs. The decrease was partially offset by a 81,000-ounce decrease in production.
In Mali, during 2020, the Sadiola and Morila operations reached the end of their operating lives and recorded $nil cost of sales and nil gold sales. On 10 November 2020, AngloGold Ashanti together with its joint venture partner Barrick completed the sale of the Morila gold mine in Mali to Firefinch Limited. On 30 December 2020, AngloGold Ashanti together with its joint venture partner IAMGOLD completed the sale of the Sadiola gold mine in Mali to Allied Gold. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Mali”.
In the DRC, at Kibali, total cash costs per ounce increased by $57, or ten percent, to $629 per ounce in 2020 from $572 per ounce in 2019. The increase was mainly due to an increase in total cash costs and a 2,000-ounce decrease in production.
In the Americas, total cash costs per ounce decreased by $15, or two percent, to $721 per ounce in 2020 from $736 per ounce in 2019. The decrease was mainly due to a decrease in cost of sales and an increase in by-product revenue, partially offset by a 61,000 ounce decrease in production.
In Brazil, at AngloGold Ashanti Córrego do Sítio Mineração, total cash costs per ounce decreased by $35, or four percent, to $747 per ounce in 2020 from $782 per ounce in 2019, primarily due to a decrease in total cash costs, while production during 2020 remained consistent with the prior year’s production at 362,000 ounces. At Serra Grande, total cash costs per ounce decreased by $42, or six percent, to $665 per ounce in 2020 from $707 per ounce in 2019, primarily due to a decrease in total cash costs, partly offset by a 9,000-ounce decrease in production.
In Argentina, at Cerro Vanguardia, total cash costs per ounce increased by $26, or four percent, to $699 per ounce in 2020 from $673 per ounce in 2019, primarily due to a 52,000-ounce decrease in production, partly offset by an increase in by-product revenue.
In Australia, total cash costs per ounce increased by $238, or 33 percent, to $968 per ounce in 2020 from $730 per ounce in 2019, primarily due to an increase in total cash costs and a 60,000-ounce decrease in production.
At Sunrise Dam, total cash costs per ounce increased by $55, or five percent, to $1,069 per ounce in 2020 compared to $1,014 per ounce in 2019, mainly due to an increase in total cash costs, partly offset by 2,000 ounce increase in production.
At Tropicana, total cash costs per ounce increased by $303, or 60 percent, to $807 per ounce in 2020 compared to $504 per ounce in 2019, mainly due to an increase in total cash costs and a 62,000 ounce decrease in production.
Overall the subsidiaries’ total cash costs per ounce increased by $52, or seven percent, to $815 per ounce in 2020 compared to $763 per ounce in 2019. The increase was mainly due to an increase in total cash costs and a 70,000-ounce decrease in production.
145
Comparison of operating performance on a segment basis in 2019 with 2018
Cost of sales
In Africa - Subsidiaries, cost of sales increased by $46 million, or four percent, to $1,173 million in 2019 from $1,127 million in 2018. The increase was mainly due to increases in total amortisation, inventory change, rehabilitation and other non-cash costs. In Tanzania, at Geita, cost of sales decreased by $41 million, or seven percent, to $571 million in 2019 from $612 million in 2018. In Ghana, at Iduapriem, cost of sales increased by $55 million, or 24 percent, to $288 million in 2019 from $233 million in 2018. In Guinea, at Siguiri, cost of sales increased by $29 million, or ten percent, to $315 million in 2019 from $286 million in 2018.
In Africa - Joint Ventures, cost of sales decreased by $52 million, or 11 percent, to $428 million in 2019 from $480 million in 2018. The decrease was mainly due to favourable inventory movements, lower amortisation and lower fuel expense. In Mali, at Morila, cost of sales decreased by $6 million, or 14 percent, to $36 million in 2019 from $42 million in 2018. At Sadiola, cost of sales decreased by $11 million, or 17 percent, to $54 million in 2019 from $65 million in 2018. In the DRC, at Kibali, cost of sales decreased by $35 million, or nine percent, to $338 million in 2019 from $373 million in 2018.
In the Americas, cost of sales decreased by $16 million, or two percent, to $822 million in 2019 from $838 million in 2018. The decrease was mainly due to the weakening of the local currencies, the Argentinian peso by 72 percent and the Brazilian real by eight percent, against the US dollar. In Brazil, at AngloGold Ashanti Córrego do Sítio Mineração, cost of sales increased by $35 million, or nine percent, to $417 million in 2019 from $382 million in 2018. At Serra Grande, cost of sales increased by $1 million, or one percent, to $130 million in 2019 from $129 million in 2018. In Argentina, at Cerro Vanguardia, cost of sales decreased by $51 million, or 16 percent, to $274 million in 2019 from $325 million in 2018.
In Australia, cost of sales increased by $10 million, or two percent, to $632 million in 2019 from $622 million in 2018. The increase was mainly due to an increase in amortisation and inventory change. The increase was partially offset by a decrease in service-related costs and the weakening of the Australian dollar against the US dollar. At Sunrise Dam, cost of sales increased by $8 million, or three percent, to $318 million in 2019 from $310 million in 2018. At Tropicana, cost of sales increased by $4 million, or one percent, to $297 million in 2019 from $293 million in 2018.
Overall the subsidiaries’ cost of sales increased from $2,584 million in 2018 to $2,626 million in 2019, which represents a $42 million, or two percent increase. The increase was primarily due to a $36 million increase in rehabilitation and other non-cash costs as a result of changes to cash flows, inflation rates and discount rates.
All-in sustaining costs per ounce
In Africa - Subsidiaries, all-in sustaining costs increased by $6 per ounce, or one percent, to $947 per ounce in 2019 from $941 per ounce in 2018. This increase was mainly due to an increase in cost of sales at Geita. The increase was partially offset by the decreased spending in sustaining capital expenditure at Iduapriem and an increase of 30,000 ounces in gold sold in 2017 (excluding pre-production ounces).
In Africa - Joint Ventures, all-in sustaining costs decreased by $53 per ounce, or six percent, to $767 per ounce in 2019 from $820 per ounce in 2018. This decrease was mainly due to a decrease in cost of sales and a decrease in sustaining capital expenditure at Kibali. This decrease was partially offset by a decrease in total amortisation and a decrease of 17,000 ounces in gold sold.
In the Americas, all-in sustaining costs increased by $177 per ounce, or 21 percent, to $1,032 per ounce in 2019 from $855 per ounce in 2018. This increase was mainly due to a decrease of 83,000 ounces in gold sold (excluding pre-production ounces) and a decrease of total amortisation at Cerro Vanguardia and Serra Grande. The increase was partially offset by a decrease in cost of sales and an overall decrease of spending in sustaining capital expenditure.
In Australia, all-in sustaining costs decreased by $5$48 per ounce, or five percent, to $1,062$990 per ounce in 20172019 from $1,067$1,038 per ounce in 2016.2018. This decrease was mainly due to an increase of 43,000 ounces in gold soldtotal amortisation at Sunrise Dam and Tropicana and a decrease in 2017spending in sustaining capital expenditure at Sunrise Dam and Tropicana. The decrease was partially offset by an increase in sustaining capital expenditure.cost of sales.
All-in costs per ounce (excluding stockpile impairments) in South Africa increased by $156 per ounce, or 14 percent, to $1,278 per ounce in 2017 from $1,122 per ounce in 2016. The increase was as a result of the strengthening of the rand, an increase in all-in sustaining costs and the 61,000-ounce decrease in gold sold.
In Continental Africa - Subsidiaries, all-in costs (excluding stockpile impairments) increased by $30$138 per ounce, or three13 percent, to $1,019$1,237 per ounce in 20172019 from $989$1,099 per ounce in 2016.2018. This increase was mainly due to an increase in all-in sustaining costs and an increase in non-sustaining project capital expenditure due to combination plant, infill drilling and overland land conveyor belt replacement at Siguiri. The increase in all-in costs wasObuasi partially offset by a 149,000-ouncethe 30,000-ounce increase in gold sold (excluding pre-production ounces).
146
In Continental Africa - Joint Ventures, all-in costs (excluding stockpile impairments) increaseddecreased by $45$61 per ounce, or fourseven percent, to $1,186$785 per ounce in 20172019 from $1,141$846 per ounce in 2016.2018. This increasedecrease was mainly due to a $60 million increasedecrease in all-in sustaining costs. This increase was partially offset bycosts, a 15,000-ounce17,000-ounce increase in gold sold and a decrease in major project spending at Kibali as projects were completed and commissioned.Kibali.
In the Americas, all-in costs (excluding stockpile impairments) increased by $59$251 per ounce, or six27 percent, to $1,018$1,183 per ounce in 20172019 from $959$932 per ounce in 2016.2018. This increase was mainly due to an increase in all-in sustaining costs, partially offset by a 47,000-ounce increase in gold sold (excluding pre-production ounces).
In Continental Africa - Joint Ventures,Australia, all-in sustaining costs (excluding stockpile impairments) increased by $251$2 per ounce or 36 percent, to $955$1,072 per ounce in 20162019 from $704$1,070 per ounce in 2015. This increase was mainly due to a 61,000-ounce decrease in gold sold, an increase in cost of sales and an increase in sustaining capital expenditure due to increased spending on Kibali.
The currencies of South Africa,Argentina, Australia Argentina and Brazil were, on average, weaker against the US dollar during 20162019 as compared to 20152018 which positively impacted total cash costs per ounce for 2016.2019.
In South Africa - Subsidiaries, total cash costs increased by $15 per ounce decreased by $12, or twoone percent, to $896$801 per ounce in 20162019 from $881$813 per ounce in 2015. The increase was mainly due to a 35,000-ounce decrease in production (excluding pre-production ounces) partially offset by the weakening of the rand.
In Tanzania, at Geita, total cash costs per ounce decreased by $109, or 14 percent, to $695 per ounce in 2019 from $804 per ounce in 2018. The decrease was mainly due to the decrease in total cash costs and a 40,000-ounce increase in production (excluding pre-production ounces).
In Ghana, at Iduapriem, total cash costs per ounce increased by $11, or one percent, to $815 per ounce in 2019 compared to $804 per ounce in 2018 mainly due to an increase in total cash costs. The increase was partially offset by a 21,000-ounce increase in production.
In Africa - Joint Ventures, total cash costs per ounce decreased by $23, or three percent, to $657 per ounce in 2019 from $680 per ounce in 2018. The decrease was mainly due to a 35,000-ounce increasedecrease in production and the weakening of the rand.
In Mali, at Morila, total cash costs per ounce increased by $425 per ounce,$60, or 61five percent, to $1,123$1,205 per ounce in 20162019 from $698$1,145 per ounce in 2015.2018. The increase was mainly due to the 27,000-ouncea 3,000-ounce decrease in production. The increase was partially offset by a decrease in total cash costs. At Sadiola, total cash costs per ounce increased by $28, or three percent, from $938 per ounce in 2018 to $966 per ounce in 2019. The increase was mainly due to an 8,000-ounce decrease in production partially offset by a decrease in stores and consumables costs, fuel costs, contractor costs and service related costs. At Sadiola, total cash costs increased by $173 per ounce, or 21 percent, from $818 per ounce in 2015 to $991 per ounce in 2016. This increase was primarily due to an increase in service related costs partially offset by a 1,000-ounce increase in production.costs.
In the DRC, at Kibali, total cash costs increased by $131 per ounce decreased by $28, or 22five percent, to $740$572 per ounce in 20162019 from $609$600 per ounce in 20152018. The decrease was mainly due to the decrease of 25,000 ouncesa 3,000-ounce increase in production and an increasea decrease in contractor and consumable storetotal cash costs.
In the Americas, total cash costs per ounce increased by $2 per ounce$112, or 18 percent, to $578$736 per ounce in 20162019 from $576$624 per ounce in 2015.2018. The increase was mainly due to a 11,000 ounce66,000-ounce decrease (excluding pre-production ounces) in production and a decrease in by-product revenue. The increase was partially offset by an increasea decrease in silver revenue due to a higher average silver price in 2016 compared to 2015 and an increase in silver sold from 4.1 million ounces in 2015 to 5.1 million ounces in 2016.total cash costs.
In Brazil, at AngloGold Ashanti Córrego do Sítíotio Mineração, total cash costs per ounce increased by $44 per ounce,$59, or eight percent, to $562$782 per ounce in 20162019 from $518$723 per ounce in 20152018 primarily due to an increase in total cash costs and a 14,000-ounce2,000-ounce decrease in production and increases(excluding pre-production ounces). At Serra Grande, total cash costs per ounce increased by $47, or seven percent, to $707 per ounce in salaries and wages costs, consumables store2019 from $660 per ounce in 2018 primarily due to an increase in total cash costs and fuel costs.7,000-ounce decrease in production (excluding pre-production ounces).
In Argentina, at Cerro Vanguardia, total cash costs decreasedper ounce increased by $197, or 41 percent, to $563$673 per ounce in 20162019 from $625$476 per ounce in 20152018 primarily due to a 3,000 ounce increase57,000-ounce decrease in production and ana decrease in by-product revenue. The increase was partially offset by a decrease in silver revenue due to a higher average silver price in 2016 compared to 2015 and an increase in silver sold from 4.1 million ounces in 2015 to 5.1 million ounces in 2016 and reimbursement by the Government in respect of exports channelled through Patagonian ports.total cash costs.
In Australia, total cash costs increased by $91 per ounce decreased by $32, or 13four percent, to $793$730 per ounce in 20162019 from $702$762 per ounce in 20152018 primarily due to a 40,000-ounce11,000-ounce decrease in production and an increase in silver relatedtotal cash costs.
147
At Sunrise Dam, total cash costs decreased by $44 per ounce increased by $94, or fiveten percent, to $926$1,014 per ounce in 20162019 compared to $970$920 per ounce in 2015,2018 mainly due to a 12,000-ounce35,000 ounce decrease in production and an increase in production.total cash costs.
At Tropicana, total cash costs increased by $138 per ounce decreased by $90, or 2815 percent, to $630$504 per ounce in 20162019 compared to $492$594 per ounce in 2015,2018 mainly due to a 52,000-ounce24,000-ounce increase in production. The decrease was partially offset by an increase in production and increases and consumables store costs, fuel costs and service relatedtotal cash costs.
Overall the subsidiariessubsidiaries’ total cash costs per ounce increased by $18 per ounce,$20, or three percent, to $737$763 per ounce in 20162019 compared to $719$743 per ounce in 2015.2018. The increase was mainly due to an increase in total cash costs and a 161,000-ounce45,000-ounce decrease in production.
148
For the year ended 31 December 20172020
(in $ millions, except as otherwise noted)
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | Tau Tona | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | Corporate (4) | |||||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 147 | 275 | 421 | 283 | 207 | 490 | 203 | — | 1,114 | (3 | ) | |||||||||||||||||||
| Amortisation of tangible and intangible assets | (9 | ) | (41 | ) | (50 | ) | (53 | ) | (14 | ) | (67 | ) | (14 | ) | (2 | ) | (133 | ) | (2 | ) | ||||||||||
| Adjusted for decommissioning amortisation | — | — | — | — | — | — | (2 | ) | 2 | — | (2 | ) | ||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | 62 | ||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | 2 | 2 | — | ||||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | — | — | — | — | — | 1 | ||||||||||||||||||||
| Total sustaining capital expenditure | 8 | 42 | 50 | 52 | 12 | 64 | 13 | 3 | 130 | 6 | ||||||||||||||||||||
| All-in sustaining costs | 146 | 276 | 421 | 282 | 205 | 487 | 200 | 5 | 1,113 | 62 | ||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | — | — | — | — | — | — | — | — | 4 | ||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 146 | 276 | 421 | 282 | 205 | 487 | 200 | 5 | 1,113 | 66 | ||||||||||||||||||||
Adjusted for stockpile write-offs | — | — | — | — | — | — | — | (2 | ) | (2 | ) | (1 | ) | |||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 146 | 276 | 421 | 282 | 205 | 487 | 200 | 3 | 1,111 | 65 | ||||||||||||||||||||
| All-in sustaining costs | 146 | 276 | 421 | 282 | 205 | 487 | 200 | 5 | 1,113 | 62 | ||||||||||||||||||||
| Non-sustaining Project capex | — | — | — | 20 | — | 20 | — | — | 20 | — | ||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | 9 | 9 | 1 | ||||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | — | — | — | — | — | — | — | 1 | ||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | — | — | — | — | 9 | ||||||||||||||||||||
| All-in costs | 146 | 276 | 421 | 302 | 205 | 507 | 200 | 14 | 1,142 | 73 | ||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | — | — | — | — | — | — | — | — | — | 5 | |||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 146 | 276 | 421 | 302 | 205 | 507 | 200 | 14 | 1,142 | 78 | ||||||||||||||||||||
Adjusted for stockpile write-offs | — | — | — | — | — | — | — | (2 | ) | (2 | ) | (1 | ) | |||||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 146 | 276 | 421 | 302 | 205 | 507 | 200 | 12 | 1,140 | 77 | ||||||||||||||||||||
Gold sold - oz (000)(2) | 91 | 294 | 385 | 224 | 91 | 316 | 192 | — | 892 | — | ||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(3) | 1,593 | 938 | 1,094 | 1,259 | 2,242 | 1,544 | 1,045 | — | 1,245 | — | ||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(3) | 1,593 | 939 | 1,094 | 1,349 | 2,242 | 1,607 | 1,045 | — | 1,278 | — | ||||||||||||||||||||
Corporate (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to | 67 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | 9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(2) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory.
(2)Attributable portion (excluding pre-production ounces).
(3)In addition to the operational performances of the mines, all-in sustaining cost per ounce, all-in cost per ounce and total cash costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce and all-in cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
(4)Corporate includes non-gold producing subsidiaries.
(5)Refer to “Item 18: Financial Statements—Note 2—Segmental Information”.
Rounding of figures may result in computational differences.
149
For the year ended 31 December 20172020
(in $ millions, except as otherwise noted)
Corporate(4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | (4) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold produced – oz (000)(2) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(3) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
150
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | Tau Tona | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | Corporate(4) | ||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 147 | 275 | 421 | 283 | 207 | 490 | 203 | — | 1,114 | (3 | ) | ||||||||||||||||||
| Inventory change | — | — | 1 | — | — | — | (2 | ) | (1 | ) | (2 | ) | — | ||||||||||||||||
| Amortisation of intangible assets | — | (1 | ) | (1 | ) | (1 | ) | — | (1 | ) | — | — | (2 | ) | 1 | ||||||||||||||
| Amortisation of tangible assets | (9 | ) | (40 | ) | (49 | ) | (52 | ) | (14 | ) | (67 | ) | (14 | ) | — | (130 | ) | (3 | ) | ||||||||||
| Rehabilitation and other non-cash costs | 3 | (5 | ) | (3 | ) | (3 | ) | (6 | ) | (9 | ) | (1 | ) | 1 | (12 | ) | — | ||||||||||||
| Retrenchment costs | — | — | — | — | — | — | — | — | — | (1 | ) | ||||||||||||||||||
| Total cash costs | 140 | 229 | 369 | 227 | 186 | 413 | 186 | — | 968 | (6 | ) | ||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | — | — | — | 4 | |||||||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 140 | 229 | 369 | 227 | 186 | 413 | 186 | — | 968 | (2 | ) | ||||||||||||||||||
Gold produced – oz (000)(2) | 91 | 294 | 386 | 224 | 91 | 315 | 192 | — | 892 | — | |||||||||||||||||||
Total cash costs per unit – $/oz(3) | 1,534 | 779 | 958 | 1,014 | 2,044 | 1,311 | 969 | — | 1,085 | — | |||||||||||||||||||
For the year ended 31 December 20172020
Operations in DRC,Africa (DRC, Ghana, Guinea, Mali and TanzaniaTanzania)
(in $ millions, except as otherwise noted)
| DRC | Mali | Joint | Ghana | Guinea | Tanzania | Africa other | Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 340 | — | — | 340 | 280 | 34 | 377 | 542 | (1) | 1,232 | |||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | (1) | (1) | — | — | (2) | — | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (104) | — | — | (104) | (74) | (6) | (41) | (124) | — | (245) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | 1 | — | — | 1 | 1 | — | — | 4 | — | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | 9 | — | — | 9 | — | — | — | 17 | — | 17 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | 3 | — | 2 | 5 | — | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 52 | — | — | 52 | 60 | 7 | 15 | 80 | 1 | 163 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 296 | — | — | 297 | 269 | 35 | 353 | 522 | — | 1,179 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (53) | — | — | (53) | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 296 | — | — | 297 | 269 | 35 | 300 | 522 | — | 1,126 | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 296 | — | — | 297 | 269 | 35 | 353 | 522 | — | 1,179 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | — | — | — | — | 161 | 15 | 7 | — | 183 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | — | — | — | — | — | — | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | — | — | 2 | 2 | 5 | 2 | — | 11 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance costs | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | 2 | 6 | (3) | 4 | — | 10 | — | — | — | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 298 | 6 | (3) | 301 | 271 | 208 | 373 | 533 | — | 1,385 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | — | — | — | — | — | (56) | — | — | (56) | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 298 | 6 | (3) | 301 | 271 | 208 | 317 | 533 | — | 1,329 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gold sold – oz (000)(2) | 365 | — | — | 365 | 274 | 27 | 215 | 639 | — | 1,155 | |||||||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per unit – $/oz(3) | 809 | — | — | 810 | 985 | 1,316 | 1,397 | 814 | — | 975 | |||||||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit – $/oz(3) | 817 | — | — | 824 | 992 | 7,731 | 1,476 | 831 | — | 1,149 | |||||||||||||||||||||||||||||||||||||||||||||||||
151
| DRC | MALI | Joint | GHANA | GUINEA | TANZANIA | Continental Africa other | SUBSIDIARIES | ||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 339 | 34 | 67 | 440 | 210 | (6 | ) | 344 | 519 | 3 | 1,070 | ||||||||||||||||||
| Amortisation of tangible and intangible assets | (120 | ) | (6 | ) | (10 | ) | (136 | ) | (28 | ) | — | (57 | ) | (197 | ) | (3 | ) | (285 | ) | ||||||||||
| Adjusted for decommissioning amortisation | — | 3 | — | 3 | 1 | — | 1 | 2 | — | 4 | |||||||||||||||||||
| Sustaining exploration and study costs | — | — | 1 | 1 | — | — | 8 | 17 | — | 25 | |||||||||||||||||||
| Total sustaining capital expenditure | 77 | 2 | 6 | 85 | 51 | — | 15 | 156 | 1 | 223 | |||||||||||||||||||
| All-in sustaining costs | 296 | 33 | 64 | 393 | 234 | (6 | ) | 311 | 497 | 1 | 1,037 | ||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (47 | ) | — | — | (47 | ) | |||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 296 | 33 | 64 | 393 | 234 | (6 | ) | 264 | 497 | 1 | 990 | ||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 296 | 33 | 64 | 393 | 234 | (6 | ) | 264 | 497 | 1 | 990 | ||||||||||||||||||
| All-in sustaining costs | 296 | 33 | 64 | 393 | 234 | (6 | ) | 311 | 497 | 1 | 1,037 | ||||||||||||||||||
| Non-sustaining Project capex | 34 | — | 1 | 35 | — | — | 67 | — | — | 67 | |||||||||||||||||||
| Non-sustaining exploration and study costs | 1 | — | — | 1 | — | 1 | — | — | — | 1 | |||||||||||||||||||
| Care and maintenance costs | — | — | — | — | — | 62 | — | — | — | 62 | |||||||||||||||||||
| All-in costs | 331 | 33 | 65 | 429 | 234 | 57 | 378 | 497 | 1 | 1,167 | |||||||||||||||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | — | — | — | — | — | (57 | ) | — | — | (57 | ) | |||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 331 | 33 | 65 | 429 | 234 | 57 | 321 | 497 | 1 | 1,110 | |||||||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 331 | 33 | 65 | 429 | 234 | 57 | 321 | 497 | 1 | 1,110 | |||||||||||||||||||
Gold sold – oz (000)(2) | 272 | 27 | 63 | 362 | 227 | 3 | 332 | 528 | — | 1,090 | |||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(3) | 1,090 | 1,218 | 1,019 | 1,087 | 1,033 | — | 796 | 941 | — | 909 | |||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(3) | 1,216 | 1,218 | 1,044 | 1,186 | 1,033 | — | 967 | 941 | — | 1,019 | |||||||||||||||||||
For the year ended 31 December 20172020
Operations in DRC,Africa (DRC, Ghana, Guinea, Mali and TanzaniaTanzania)
(in $ millions, except as otherwise noted)
| DRC | Mali | Joint | Ghana | Guinea | Tanzania | Africa other | Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 340 | — | — | 340 | 280 | 34 | 377 | 542 | (1) | 1,232 | |||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | (1) | (1) | — | — | (2) | — | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | (1) | — | — | (1) | 1 | 9 | (1) | (12) | — | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (104) | — | — | (104) | (74) | (6) | (41) | (124) | — | (245) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (4) | — | — | (4) | (6) | (2) | (9) | (5) | — | (22) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 230 | — | — | 230 | 200 | 35 | 326 | 399 | (1) | 959 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | (49) | — | — | (49) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 230 | — | — | 230 | 200 | 35 | 277 | 399 | (1) | 910 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000) (2) | 364 | — | — | 364 | 275 | 30 | — | 215 | — | 623 | — | — | 1,143 | ||||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(3) | 629 | — | — | 629 | 731 | 1,145 | 1,293 | 641 | — | 797 | |||||||||||||||||||||||||||||||||||||||||||||||||
152
| DRC | MALI | JOINT | GHANA | GUINEA | TANZANIA | Continental Africa other | TOTAL CONTINENTAL AFRICA | ||||||||||||||||||||||
| Kibali | Morila | Sadiola | VENTURES | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 339 | 34 | 67 | 440 | 210 | (6 | ) | 344 | 519 | 3 | 1,070 | ||||||||||||||||||
| Inventory change | (4 | ) | — | 1 | (3 | ) | — | — | (7 | ) | 13 | — | 6 | ||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | (1 | ) | — | — | — | (2 | ) | (3 | ) | ||||||||||||||||
| Amortisation of tangible assets | (120 | ) | (6 | ) | (10 | ) | (136 | ) | (28 | ) | — | (57 | ) | (197 | ) | — | (282 | ) | |||||||||||
| Rehabilitation and other non-cash costs | (5 | ) | (1 | ) | — | (6 | ) | 7 | 7 | (5 | ) | (7 | ) | — | 2 | ||||||||||||||
| Total cash costs | 210 | 27 | 58 | 295 | 188 | 1 | 275 | 328 | 1 | 793 | |||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | (41 | ) | — | — | (41 | ) | |||||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 210 | 27 | 58 | 295 | 188 | 1 | 234 | 328 | 1 | 752 | |||||||||||||||||||
Gold produced - oz (000) (2) | 268 | 28 | 63 | 360 | 228 | 3 | 323 | 539 | — | 1,094 | |||||||||||||||||||
Total cash costs per unit - $/oz(3) | 784 | 974 | 900 | 819 | 823 | — | 725 | 608 | — | 688 | |||||||||||||||||||
For the year ended 31 December 20172020
Operations in Australia Argentina and Brazilthe Americas (Argentina and Brazil)
(in $ millions, except as otherwise noted)
| Australia | Total Australia | Argentina | Brazil | Americas other | Total Americas | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | ||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 342 | 338 | 25 | 705 | 269 | 391 | 102 | 2 | 764 | ||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | (2) | — | (3) | (82) | (17) | — | — | (99) | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (64) | (94) | (2) | (160) | (26) | (109) | (27) | (1) | (163) | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | 2 | 1 | — | 3 | (7) | 3 | — | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | 11 | 10 | 1 | 22 | — | 8 | 2 | — | 10 | ||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | — | 1 | — | 1 | 2 | 2 | — | — | 4 | ||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 50 | 64 | — | 114 | 31 | 103 | 33 | — | 167 | ||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 340 | 318 | 24 | 682 | 187 | 381 | 110 | 1 | 679 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (14) | — | — | — | (14) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 340 | 318 | 24 | 682 | 173 | 381 | 110 | 1 | 665 | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 340 | 318 | 24 | 682 | 187 | 381 | 110 | 1 | 679 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | 3 | 25 | — | 28 | — | — | — | 49 | 49 | ||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | 22 | 5 | 17 | 44 | 1 | 6 | 3 | 47 | 57 | ||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | 8 | 2 | — | 10 | ||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 365 | 348 | 41 | 754 | 188 | 395 | 115 | 97 | 795 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (14) | — | — | — | (14) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 365 | 348 | 41 | 754 | 174 | 395 | 115 | 97 | 781 | ||||||||||||||||||||||||||||||||||||||||||||
Gold sold – oz (000)(2) | 258 | 299 | — | 557 | 186 | 364 | 114 | — | 664 | ||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per unit – $/oz(3) | 1,320 | 1,061 | — | 1,225 | 931 | 1,050 | 953 | — | 1,003 | ||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit – $/oz(3) | 1,417 | 1,164 | — | 1,356 | 934 | 1,091 | 997 | — | 1,179 | ||||||||||||||||||||||||||||||||||||||||||||
153
| Australia | Total Australia | ARGENTINA | Brazil | Americas other | TOTAL AMERICAS | |||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 260 | 274 | 16 | 550 | 268 | 429 | 153 | 1 | 851 | |||||||||||||||||
| Amortisation of tangible and intangible assets | (34 | ) | (89 | ) | (7 | ) | (130 | ) | (83 | ) | (140 | ) | (50 | ) | — | (273 | ) | |||||||||
| Adjusted for decommissioning amortisation | — | 1 | — | 1 | 1 | (1 | ) | — | — | — | ||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | 1 | — | — | 1 | |||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | 1 | 1 | — | — | — | — | — | |||||||||||||||||
| Sustaining exploration and study costs | 2 | 7 | 5 | 14 | 3 | 8 | 6 | 7 | 24 | |||||||||||||||||
| Total sustaining capital expenditure | 62 | 91 | — | 153 | 56 | 134 | 38 | 4 | 232 | |||||||||||||||||
| All-in sustaining costs | 290 | 284 | 15 | 589 | 245 | 431 | 147 | 12 | 835 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | 8 | 8 | (18 | ) | — | — | (11 | ) | (29 | ) | ||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 290 | 284 | 23 | 597 | 227 | 431 | 147 | 1 | 806 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | — | — | — | — | |||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 290 | 284 | 23 | 597 | 227 | 431 | 147 | 1 | 806 | |||||||||||||||||
| All-in sustaining costs | 290 | 284 | 15 | 589 | 245 | 431 | 147 | 12 | 835 | |||||||||||||||||
| Non-sustaining Project capex | — | — | — | — | — | 2 | — | — | 2 | |||||||||||||||||
| Non-sustaining exploration and study costs | — | — | 10 | 10 | 2 | 7 | — | 28 | 37 | |||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | 12 | 2 | 1 | 15 | |||||||||||||||||
| All-in costs | 290 | 284 | 25 | 599 | 247 | 452 | 149 | 41 | 889 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | 8 | 8 | (19 | ) | — | — | — | (19 | ) | |||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 290 | 284 | 33 | 607 | 228 | 452 | 149 | 41 | 870 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | — | — | — | — | |||||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 290 | 284 | 33 | 607 | 228 | 452 | 149 | 41 | 870 | |||||||||||||||||
Gold sold – oz (000)(2) | 241 | 321 | — | 562 | 293 | 428 | 133 | — | 854 | |||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(3) | 1,203 | 885 | — | 1,062 | 772 | 1,006 | 1,103 | — | 943 | |||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(3) | 1,203 | 885 | — | 1,080 | 780 | 1,055 | 1,119 | — | 1,018 | |||||||||||||||||
For the year ended 31 December 20172020
Operations in Australia Argentina and Brazilthe Americas (Argentina and Brazil)
(in $ millions, except as otherwise noted)
| Australia | Total Australia | Argentina | Brazil | Americas other | Total Americas | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 342 | 338 | 25 | 705 | 269 | 391 | 102 | 2 | 764 | ||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | (2) | — | (3) | (82) | (17) | — | — | (99) | ||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | (1) | (1) | — | (2) | (16) | 1 | — | — | (16) | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | (1) | (1) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (64) | (94) | (1) | (159) | (26) | (109) | (27) | (1) | (163) | ||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (2) | (1) | (1) | (4) | (13) | 4 | 3 | (1) | (6) | ||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | — | — | — | (1) | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 274 | 240 | 22 | 536 | 132 | 269 | 77 | — | 478 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | (10) | — | — | — | (10) | ||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 274 | 240 | 22 | 536 | 122 | 269 | 77 | — | 468 | ||||||||||||||||||||||||||||||||||||||||||||
Gold produced – oz (000) (2) | 256 | 298 | — | 554 | 173 | 362 | 114 | — | 649 | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(3) | 1,069 | 807 | — | 968 | 699 | 747 | 665 | — | 721 | ||||||||||||||||||||||||||||||||||||||||||||
154
| Australia | Total Australia | ARGENTINA | Brazil | Americas other | TOTAL AMERICAS | |||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||||||
| Total cash costs | ||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 260 | 274 | 16 | 550 | 268 | 429 | 153 | 1 | 851 | |||||||||||||||||
| Inventory change | (2 | ) | (2 | ) | — | (4 | ) | (12 | ) | (3 | ) | — | — | (15 | ) | |||||||||||
| Amortisation of intangible assets | — | — | — | — | — | (1 | ) | — | — | (1 | ) | |||||||||||||||
| Amortisation of tangible assets | (34 | ) | (89 | ) | (7 | ) | (130 | ) | (83 | ) | (139 | ) | (50 | ) | — | (272 | ) | |||||||||
| Rehabilitation and other non-cash costs | (5 | ) | (2 | ) | (2 | ) | (9 | ) | (11 | ) | — | — | — | (11 | ) | |||||||||||
| Retrenchment costs | — | — | — | — | (2 | ) | (3 | ) | (1 | ) | 1 | (5 | ) | |||||||||||||
| Total cash costs | 219 | 181 | 7 | 407 | 160 | 284 | 101 | 2 | 547 | |||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | 8 | 8 | (12 | ) | — | — | — | (12 | ) | |||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 219 | 181 | 15 | 415 | 148 | 284 | 101 | 2 | 535 | |||||||||||||||||
Gold produced – oz (000) (2) | 238 | 322 | — | 559 | 283 | 424 | 133 | — | 840 | |||||||||||||||||
Total cash costs per unit – $/oz(3) | 919 | 564 | — | 743 | 522 | 671 | 764 | — | 638 | |||||||||||||||||
For the year ended 31 December 20172020
AngloGold Ashanti operations – Total
(from continuing operations - in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||||||
| All-in sustaining costs | ||||||||
Cost of sales per segmental information(5) | 340 | 2,699 | ||||||
| By-product revenue | (1) | (105) | ||||||
| Amortisation of tangible and intangible assets | (104) | (570) | ||||||
| Adjusted for decommissioning and inventory amortisation | 1 | 4 | ||||||
| Lease payment sustaining | 9 | 52 | ||||||
| Corporate administration and marketing related to current operations | — | 67 | ||||||
| Inventory write-down to net realisable value and other stockpile adjustments | — | — | ||||||
| Sustaining exploration and study costs | — | 15 | ||||||
| Total sustaining capital expenditure | 52 | 445 | ||||||
| Realised other commodity contracts | — | 5 | ||||||
| All-in sustaining costs | 297 | 2,612 | ||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | (67) | ||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 297 | 2,545 | ||||||
| All-in sustaining costs | 297 | 2,612 | ||||||
| Non-sustaining project capital expenditure | — | 260 | ||||||
| Lease payment non sustaining | — | 2 | ||||||
| Technology improvements | — | — | ||||||
| Non-sustaining exploration and study costs | — | 112 | ||||||
| Care and maintenance costs | — | — | ||||||
| Corporate and social responsibility costs not related to current operations | 4 | 29 | ||||||
| Other provisions | — | — | ||||||
| All-in costs | 301 | 3,015 | ||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | (70) | ||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 301 | 2,945 | ||||||
Gold sold – oz (000)(2) | 365 | 2,376 | ||||||
All-in sustaining cost per unit – $/oz(3) | 810 | 1,072 | ||||||
All-in cost per unit – $/oz(3) | 824 | 1,240 | ||||||
155
For the year ended 31 December 2020
AngloGold Ashanti operations – Total
(from continuing operations - in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||||||
| Total cash costs | ||||||||
Cost of sales per segmental information(5) | 340 | 2,699 | ||||||
| By-product revenue | (1) | (105) | ||||||
| Inventory change | (1) | (21) | ||||||
| Amortisation of intangible assets | — | (2) | ||||||
| Amortisation of tangible and intangible assets | (104) | (568) | ||||||
| Rehabilitation and other non-cash costs | (4) | (32) | ||||||
| Retrenchment costs | — | (2) | ||||||
| Total cash costs net of by-product revenue | 230 | 1,969 | ||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | (59) | ||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 230 | 1,910 | ||||||
Gold produced – oz (000)(2) | 364 | 2,345 | ||||||
Total cash costs (adjusted) per unit – $/oz(3) | 629 | 815 | ||||||
156
For the year ended 31 December 2019
Corporate and other
(in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||
| All-in sustaining costs | ||||
| Cost of sales per segmental information | 440 | 3,582 | ||
| Amortisation of tangible and intangible assets | (136 | ) | (823 | ) |
| Adjusted for decommissioning amortisation | 3 | 3 | ||
| Corporate administration and marketing related to current operations | — | 63 | ||
| Inventory write-down to net realisable value and other stockpile adjustments | — | 3 | ||
| Sustaining exploration and study costs | 1 | 64 | ||
| Total sustaining capital expenditure | 85 | 744 | ||
| All-in sustaining costs | 393 | 3,636 | ||
| Adjusted for non-controlling interests and non-gold producing companies | — | (64 | ) | |
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 393 | 3,572 | ||
| Adjusted for stockpile write-offs | — | (3 | ) | |
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 393 | 3,569 | ||
| All-in sustaining costs | 393 | 3,636 | ||
| Non-sustaining Project capex | 35 | 89 | ||
| Technology improvements | — | 10 | ||
| Non-sustaining exploration and study costs | 1 | 49 | ||
| Care and maintenance costs | — | 62 | ||
| Corporate and social responsibility costs not related to current operations | — | 24 | ||
| All-in costs | 429 | 3,870 | ||
| Adjusted for non-controlling interests and non-gold producing companies | — | (63 | ) | |
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 429 | 3,807 | ||
| Adjusted for stockpile write-offs | — | (3 | ) | |
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 429 | 3,804 | ||
| Gold sold – oz (000) | 362 | 3,399 | ||
| All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz | 1,087 | 1,050 | ||
| All-in cost per unit (excluding stockpile write-offs) – $/oz | 1,186 | 1,119 | ||
| JOINT VENTURES | SUBSIDIARIES | |||
| Total cash costs | ||||
| Cost of sales per segmental information | 440 | 3,582 | ||
| Inventory change | (3 | ) | (15 | ) |
| Amortisation of intangible assets | — | (6 | ) | |
| Amortisation of tangible assets | (136 | ) | (817 | ) |
| Rehabilitation and other non-cash costs | (6 | ) | (29 | ) |
| Retrenchment costs | — | (6 | ) | |
| Total cash costs | 295 | 2,709 | ||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | (41 | ) | |
| Associates and equity accounted joint ventures' share of total cash costs | — | — | ||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 295 | 2,668 | ||
| Gold produced – oz (000) | 360 | 3,384 | ||
| Total cash costs (adjusted) per unit – $/oz | 819 | 789 | ||
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | Tau Tona | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | Corporate (4) | ||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 144 | 255 | 400 | 259 | 198 | 457 | 185 | (1 | ) | 1,041 | 5 | ||||||||||||||||||
| Amortisation of tangible and intangible assets | (20 | ) | (49 | ) | (69 | ) | (55 | ) | (28 | ) | (83 | ) | (14 | ) | (1 | ) | (167 | ) | (5 | ) | |||||||||
| Adjusted for decommissioning amortisation | — | — | (1 | ) | — | — | — | (2 | ) | 3 | — | — | |||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | 59 | |||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | 5 | 5 | — | |||||||||||||||||||
| Total sustaining capital expenditure | 16 | 41 | 57 | 52 | 25 | 77 | 17 | 5 | 156 | 4 | |||||||||||||||||||
| All-in sustaining costs | 140 | 247 | 387 | 256 | 195 | 451 | 186 | 11 | 1,035 | 63 | |||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 140 | 247 | 387 | 256 | 195 | 451 | 186 | 11 | 1,035 | 63 | |||||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | — | — | (5 | ) | (5 | ) | — | |||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 140 | 247 | 387 | 256 | 195 | 451 | 186 | 6 | 1,030 | 63 | |||||||||||||||||||
| All-in sustaining costs | 140 | 247 | 387 | 256 | 195 | 451 | 186 | 11 | 1,035 | 63 | |||||||||||||||||||
| Non-sustaining Project capex | — | 2 | 2 | 24 | — | 24 | — | (1 | ) | 25 | — | ||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | 14 | 14 | — | |||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | — | — | — | — | — | — | — | 1 | |||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | — | — | — | — | 25 | |||||||||||||||||||
| All-in costs | 140 | 249 | 389 | 280 | 195 | 475 | 186 | 24 | 1,074 | 89 | |||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 140 | 249 | 389 | 280 | 195 | 475 | 186 | 24 | 1,074 | 89 | |||||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | — | — | (5 | ) | (5 | ) | — | |||||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 140 | 249 | 389 | 280 | 195 | 475 | 186 | 19 | 1,069 | 89 | |||||||||||||||||||
Gold sold - oz (000)(2) | 91 | 279 | 369 | 253 | 146 | 398 | 185 | — | 953 | — | |||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(3) | 1,555 | 884 | 1,049 | 1,011 | 1,345 | 1,133 | 1,004 | — | 1,081 | — | |||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(3) | 1,555 | 890 | 1,053 | 1,105 | 1,345 | 1,193 | 1,004 | — | 1,122 | — | |||||||||||||||||||
Corporate (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to | 82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation relating to inventory | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 83 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 83 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 90 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(2) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory.
(2)Attributable portion.
(3)In addition to the operational performances of the mines, all-in sustaining cost per ounce, all-in cost per ounce and total cash costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce and all-in cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
(4)Corporate includes non-gold producing subsidiaries.
(5)Refer to “Item 18: Financial Statements—Note 2—Segmental Information”.
Rounding of figures may result in computational discrepancies.
157
For the year ended 31 December 20162019
(in $ millions, except as otherwise noted)
Corporate (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | 4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold produced – oz (000)(2) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(3) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
158
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | Tau Tona | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | Corporate (4) | ||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||
| Cost of sales per segmental information | 144 | 255 | 400 | 259 | 198 | 457 | 185 | (1 | ) | 1,041 | 5 | ||||||||||||||||||
| Inventory change | — | 1 | 1 | 1 | — | 1 | (1 | ) | — | 1 | — | ||||||||||||||||||
| Amortisation of intangible assets | — | (2 | ) | (2 | ) | (1 | ) | (1 | ) | (2 | ) | (1 | ) | (1 | ) | (6 | ) | (2 | ) | ||||||||||
| Amortisation of tangible assets | (19 | ) | (48 | ) | (67 | ) | (54 | ) | (27 | ) | (81 | ) | (13 | ) | — | (161 | ) | (3 | ) | ||||||||||
| Rehabilitation and other non-cash costs | (2 | ) | 1 | (2 | ) | (4 | ) | (1 | ) | (5 | ) | (3 | ) | 3 | (7 | ) | — | ||||||||||||
| Retrenchment costs | (2 | ) | (3 | ) | (5 | ) | (3 | ) | (2 | ) | (5 | ) | — | (1 | ) | (11 | ) | — | |||||||||||
| Total cash costs | 121 | 204 | 325 | 198 | 167 | 365 | 167 | — | 857 | — | |||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 121 | 204 | 325 | 198 | 167 | 365 | 167 | — | 857 | — | |||||||||||||||||||
Gold produced – oz (000) (2) | 91 | 280 | 371 | 254 | 146 | 399 | 186 | — | 957 | — | |||||||||||||||||||
Total cash costs per unit – $/oz(3) | 1,324 | 729 | 875 | 779 | 1,148 | 914 | 899 | — | 896 | — | |||||||||||||||||||
For the year ended 31 December 20162019
Operations in DRC,Africa (DRC, Ghana, Guinea, Mali and TanzaniaTanzania)
(in $ millions, except as otherwise noted)
| DRC | Mali | Joint | Ghana | Guinea | Tanzania | Africa other | Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 338 | 36 | 54 | 428 | 288 | — | 315 | 571 | (1) | 1,173 | |||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | (1) | (1) | — | — | (1) | — | (2) | |||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (130) | (3) | (4) | (137) | (58) | — | (38) | (133) | (1) | (230) | |||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | 1 | 1 | — | 2 | 1 | — | — | 3 | 1 | 4 | |||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | — | — | — | — | — | — | — | 19 | — | 19 | |||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | 3 | — | 3 | 6 | (1) | 12 | |||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 46 | — | — | 46 | 16 | — | 15 | 75 | — | 107 | |||||||||||||||||||||||||||||||||||||||||||
| Amortisation relating to inventory | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 254 | 34 | 50 | 338 | 249 | — | 295 | 540 | (1) | 1,083 | |||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (44) | — | — | (44) | |||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 254 | 34 | 50 | 338 | 249 | — | 251 | 540 | (1) | 1,039 | |||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 254 | 34 | 50 | 338 | 249 | — | 295 | 540 | (1) | 1,083 | |||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | 5 | — | — | 5 | — | 246 | 6 | — | — | 252 | |||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | — | — | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | 5 | — | — | 4 | 1 | — | 4 | 4 | 1 | 10 | |||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance costs | — | — | — | — | — | 48 | — | — | (1) | 47 | |||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | 1 | — | — | — | 2 | — | 9 | — | — | 11 | |||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 265 | 34 | 49 | 347 | 252 | 294 | 314 | 545 | (1) | 1,404 | |||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (47) | — | — | (47) | |||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 265 | 34 | 49 | 347 | 252 | 294 | 267 | 545 | (1) | 1,357 | |||||||||||||||||||||||||||||||||||||||||||
Gold sold – oz (000)(2) | 362 | 28 | 52 | 442 | 280 | — | 213 | 604 | — | 1,096 | |||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per unit – $/oz(3) | 704 | 1,237 | 956 | 767 | 890 | — | 1,176 | 894 | — | 947 | |||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit – $/oz(3) | 734 | 1,237 | 930 | 785 | 900 | — | 1,252 | 903 | — | 1,237 | |||||||||||||||||||||||||||||||||||||||||||
159
| DRC | MALI | JOINT | GHANA | GUINEA | TANZANIA | Continental Africa other | SUBSIDIARIES | |||||||||||||||||||
| Kibali | Morila | Sadiola | VENTURES | Iduapriem | Obuasi | Siguiri | Geita | |||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||
| Cost of sales per segmental information | 292 | 32 | 81 | 406 | 219 | 1 | 257 | 447 | 1 | 925 | ||||||||||||||||
| Amortisation of tangible and intangible assets | (96 | ) | (7 | ) | (11 | ) | (114 | ) | (23 | ) | — | (31 | ) | (195 | ) | (2 | ) | (251 | ) | |||||||
| Adjusted for decommissioning amortisation | — | 2 | — | 2 | — | — | 1 | 3 | 1 | 5 | ||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | 1 | — | 1 | — | — | — | — | — | — | ||||||||||||||||
| Sustaining exploration and study costs | — | — | 1 | 1 | — | — | 3 | 27 | — | 30 | ||||||||||||||||
| Total sustaining capital expenditure | 32 | 1 | 3 | 36 | 8 | — | 38 | 119 | — | 165 | ||||||||||||||||
| All-in sustaining costs | 228 | 29 | 74 | 332 | 204 | 1 | 268 | 401 | — | 874 | ||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (40 | ) | — | — | (40 | ) | ||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 228 | 29 | 74 | 332 | 204 | 1 | 228 | 401 | — | 834 | ||||||||||||||||
| Adjusted for stockpile write-offs | — | (1 | ) | — | (1 | ) | — | — | — | — | — | — | ||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 228 | 28 | 74 | 331 | 204 | 1 | 228 | 401 | — | 834 | ||||||||||||||||
| All-in sustaining costs | 228 | 29 | 74 | 332 | 204 | 1 | 268 | 401 | — | 874 | ||||||||||||||||
| Non-sustaining Project capex | 60 | — | 3 | 63 | — | 6 | 21 | — | — | 27 | ||||||||||||||||
| Non-sustaining exploration and study costs | 2 | — | — | 2 | — | 4 | — | — | (1 | ) | 3 | |||||||||||||||
| Care and maintenance costs | — | — | — | — | — | 70 | — | — | — | 70 | ||||||||||||||||
| All-in costs | 290 | 29 | 77 | 397 | 204 | 81 | 289 | 401 | (1 | ) | 974 | |||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (43 | ) | — | — | (43 | ) | ||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 290 | 29 | 77 | 397 | 204 | 81 | 246 | 401 | (1 | ) | 931 | |||||||||||||||
| Adjusted for stockpile write-offs | — | (1 | ) | — | (1 | ) | — | — | — | — | — | — | ||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 290 | 28 | 77 | 396 | 204 | 81 | 246 | 401 | (1 | ) | 931 | |||||||||||||||
Gold sold – oz (000)(2) | 256 | 21 | 70 | 347 | 215 | 3 | 249 | 474 | — | 941 | ||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(3) | 893 | 1,337 | 1,066 | 955 | 950 | 440 | 915 | 844 | — | 886 | ||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(3) | 1,132 | 1,337 | 1,116 | 1,141 | 950 | 29,420 | 985 | 844 | — | 989 | ||||||||||||||||
For the year ended 31 December 20162019
Operations in DRC,Africa (DRC, Ghana, Guinea, Mali and TanzaniaTanzania)
(in $ millions, except as otherwise noted)
| DRC | Mali | Joint | Ghana | Guinea | Tanzania | Africa other | Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 338 | 36 | 54 | 428 | 288 | — | 315 | 571 | (1) | 1,173 | |||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | (1) | (1) | — | — | (1) | — | (2) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | 4 | (1) | — | 3 | (5) | — | 1 | (9) | 1 | (12) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | (130) | (3) | (4) | (137) | (58) | — | (38) | (133) | (1) | (230) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (1) | 1 | — | (1) | — | — | (5) | (8) | (2) | (14) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 210 | 33 | 50 | 292 | 224 | — | 273 | 420 | (2) | 915 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | (41) | — | — | (41) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 210 | 33 | 50 | 292 | 224 | — | 232 | 420 | (2) | 874 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000) (2) | 366 | 27 | 51 | 445 | 275 | — | 213 | 604 | — | 1,091 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(3) | 572 | 1,205 | 966 | 657 | 815 | — | 1,091 | 695 | — | 801 | |||||||||||||||||||||||||||||||||||||||||||||||||
160
| DRC | MALI | JOINT | GHANA | GUINEA | TANZANIA | Continental Africa other | SUBSIDIARIES | ||||||||||||||||||||||
| Kibali | Morila | Sadiola | VENTURES | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||
| Cash costs | |||||||||||||||||||||||||||||
| Cost of sales per segmental information | 292 | 32 | 81 | 406 | 219 | 1 | 257 | 447 | 1 | 925 | |||||||||||||||||||
| Inventory change | 5 | — | — | 5 | — | — | 14 | 7 | 1 | 22 | |||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | (2 | ) | (2 | ) | |||||||||||||||||
| Amortisation of tangible assets | (96 | ) | (7 | ) | (10 | ) | (114 | ) | (23 | ) | — | (31 | ) | (195 | ) | — | (249 | ) | |||||||||||
| Rehabilitation and other non-cash costs | (6 | ) | (1 | ) | (1 | ) | (9 | ) | (2 | ) | (1 | ) | (1 | ) | (5 | ) | 1 | (8 | ) | ||||||||||
| Total cash costs | 195 | 24 | 70 | 288 | 194 | 1 | 239 | 253 | 1 | 688 | |||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | (36 | ) | — | — | (36 | ) | |||||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 195 | 24 | 70 | 288 | 194 | 1 | 203 | 253 | 1 | 652 | |||||||||||||||||||
Gold produced - oz (000) (2) | 264 | 22 | 70 | 356 | 214 | 3 | 260 | 478 | — | 955 | |||||||||||||||||||
Total cash costs per unit - $/oz(3) | 740 | 1,123 | 991 | 812 | 908 | 167 | 784 | 530 | — | 682 | |||||||||||||||||||
For the year ended 31 December 20162019
Operations in Australia Argentina and Brazilthe Americas (Argentina and Brazil)
(in $ millions, except as otherwise noted)
| Australia | Total Australia | Argentina | Brazil | Americas other | Total Americas | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | ||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 318 | 297 | 17 | 632 | 274 | 417 | 130 | 1 | 822 | ||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | (2) | — | (3) | (61) | (20) | — | (1) | (81) | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (56) | (111) | (7) | (173) | (40) | (103) | (34) | — | (177) | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | 2 | — | — | 2 | (3) | (3) | — | 2 | (5) | ||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | 8 | 4 | 8 | 20 | — | 7 | — | — | 7 | ||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | 4 | — | — | 4 | 1 | 8 | 5 | — | 14 | ||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 43 | 83 | — | 126 | 33 | 91 | 34 | — | 157 | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation relating to inventory | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 319 | 271 | 18 | 609 | 204 | 397 | 136 | 2 | 737 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (15) | — | — | — | (15) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 319 | 271 | 18 | 609 | 189 | 397 | 136 | 2 | 722 | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 319 | 271 | 18 | 609 | 204 | 397 | 136 | 2 | 737 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | 23 | — | 23 | — | — | — | 38 | 38 | ||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | 5 | 4 | 18 | 27 | 1 | 3 | 1 | 44 | 49 | ||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | 17 | 3 | — | 20 | ||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 324 | 298 | 36 | 659 | 205 | 418 | 140 | 83 | 844 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (15) | — | — | — | (15) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 324 | 298 | 36 | 659 | 190 | 418 | 140 | 83 | 829 | ||||||||||||||||||||||||||||||||||||||||||||
Gold sold – oz (000)(2) | 256 | 358 | — | 614 | 219 | 358 | 122 | — | 700 | ||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per unit – $/oz(3) | 1,246 | 757 | — | 990 | 859 | 1,107 | 1,105 | — | 1,032 | ||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit – $/oz(3) | 1,266 | 830 | — | 1,072 | 863 | 1,164 | 1,141 | — | 1,183 | ||||||||||||||||||||||||||||||||||||||||||||
161
| Australia | Total Australia | ARGENTINA | Brazil | Americas other | TOTAL AMERICAS | |||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||
| Cost of sales per segmental information | 242 | 277 | 21 | 540 | 250 | 364 | 134 | 4 | 752 | |||||||||||||||||
| Amortisation of tangible and intangible assets | (32 | ) | (83 | ) | (11 | ) | (126 | ) | (77 | ) | (132 | ) | (51 | ) | — | (260 | ) | |||||||||
| Adjusted for decommissioning amortisation | 1 | 2 | — | 3 | 1 | 1 | — | — | 2 | |||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | 1 | — | (1 | ) | — | ||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | 7 | 7 | — | — | — | — | — | |||||||||||||||||
| Sustaining exploration and study costs | 1 | 12 | 8 | 21 | 2 | 2 | 7 | 7 | 18 | |||||||||||||||||
| Total sustaining capital expenditure | 32 | 76 | 1 | 109 | 60 | 121 | 43 | 1 | 225 | |||||||||||||||||
| All-in sustaining costs | 244 | 284 | 26 | 554 | 236 | 357 | 133 | 11 | 737 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | 8 | 8 | (18 | ) | — | — | (8 | ) | (26 | ) | ||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 244 | 284 | 34 | 562 | 218 | 357 | 133 | 3 | 711 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | — | (8 | ) | (8 | ) | (4 | ) | — | (1 | ) | 1 | (4 | ) | ||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 244 | 284 | 26 | 554 | 214 | 357 | 132 | 4 | 707 | |||||||||||||||||
| All-in sustaining costs | 244 | 284 | 26 | 554 | 236 | 357 | 133 | 11 | 737 | |||||||||||||||||
| Non-sustaining Project capex | — | — | — | — | — | 1 | — | — | 1 | |||||||||||||||||
| Non-sustaining exploration and study costs | — | — | 7 | 7 | — | 6 | 1 | 36 | 43 | |||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | 11 | 3 | 1 | 15 | |||||||||||||||||
| All-in costs | 244 | 284 | 33 | 561 | 236 | 375 | 137 | 48 | 796 | |||||||||||||||||
| Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | 8 | 8 | (17 | ) | — | — | (1 | ) | (18 | ) | ||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 244 | 284 | 41 | 569 | 219 | 375 | 137 | 47 | 778 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | — | (8 | ) | (8 | ) | (4 | ) | — | (1 | ) | 1 | (4 | ) | ||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 244 | 284 | 33 | 561 | 215 | 375 | 136 | 48 | 774 | |||||||||||||||||
Gold sold – oz (000)(2) | 226 | 293 | — | 519 | 277 | 400 | 130 | — | 807 | |||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(3) | 1,080 | 970 | — | 1,067 | 773 | 893 | 1,020 | — | 875 | |||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(3) | 1,080 | 970 | — | 1,081 | 774 | 938 | 1,044 | — | 959 | |||||||||||||||||
For the year ended 31 December 20162019
Operations in Australia Argentina and Brazilthe Americas (Argentina and Brazil)
(in $ millions, except as otherwise noted)
| Australia | Total Australia | Argentina | Brazil | Americas other | Total Americas | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 318 | 297 | 17 | 632 | 274 | 417 | 131 | 1 | 822 | ||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | (3) | — | (3) | (61) | (20) | — | (1) | (81) | ||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | (1) | (1) | — | (2) | 3 | (1) | — | — | 2 | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | (56) | (111) | (7) | (173) | (40) | (103) | (34) | — | (177) | ||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (3) | (1) | (1) | (5) | (11) | (12) | (10) | — | (33) | ||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | — | (1) | (1) | (2) | — | (1) | (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 258 | 181 | 9 | 448 | 164 | 279 | 87 | (2) | 530 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | (12) | — | — | — | (12) | ||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 258 | 181 | 9 | 448 | 152 | 279 | 87 | (2) | 518 | ||||||||||||||||||||||||||||||||||||||||||||
Gold produced – oz (000) (2) | 254 | 360 | — | 614 | 225 | 362 | 123 | — | 710 | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit – $/oz(3) | 1,014 | 504 | — | 730 | 673 | 782 | 707 | — | 736 | ||||||||||||||||||||||||||||||||||||||||||||
162
| Australia | Total Australia | ARGENTINA | Brazil | Americas other | TOTAL AMERICAS | |||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||||||
| Cash costs | ||||||||||||||||||||||||||
| Cost of sales per segmental information | 242 | 277 | 21 | 540 | 250 | 364 | 134 | 4 | 752 | |||||||||||||||||
| Inventory change | — | — | 1 | 1 | 7 | 5 | 1 | — | 13 | |||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | (7 | ) | (3 | ) | — | (10 | ) | ||||||||||||||
| Amortisation of tangible assets | (32 | ) | (83 | ) | (11 | ) | (126 | ) | (77 | ) | (125 | ) | (48 | ) | — | (250 | ) | |||||||||
| Rehabilitation and other non-cash costs | 1 | (10 | ) | (2 | ) | (11 | ) | (8 | ) | (7 | ) | (1 | ) | — | (16 | ) | ||||||||||
| Retrenchment costs | — | — | — | — | (1 | ) | (1 | ) | — | (1 | ) | (3 | ) | |||||||||||||
| Total cash costs | 211 | 184 | 9 | 404 | 171 | 229 | 83 | 3 | 486 | |||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | 8 | 8 | (13 | ) | — | — | — | (13 | ) | |||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 211 | 184 | 17 | 412 | 158 | 229 | 83 | 3 | 473 | |||||||||||||||||
Gold produced – oz (000) (2) | 228 | 292 | — | 520 | 281 | 407 | 131 | — | 820 | |||||||||||||||||
Total cash costs per unit – $/oz(3) | 926 | 630 | — | 793 | 563 | 562 | 634 | — | 578 | |||||||||||||||||
For the year ended 31 December 20162019
AngloGold Ashanti operations – Total
(from continuing operations - in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||||||
| All-in sustaining costs | ||||||||
Cost of sales per segmental information(5) | 428 | 2,626 | ||||||
| By-product revenue | (1) | (86) | ||||||
| Amortisation of tangible and intangible assets | (137) | (583) | ||||||
| Adjusted for decommissioning and inventory amortisation | 2 | 1 | ||||||
| Lease payment sustaining | — | 51 | ||||||
| Corporate administration and marketing related to current operations | — | 82 | ||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | ||||||
| Sustaining exploration and study costs | — | 31 | ||||||
| Total sustaining capital expenditure | 46 | 390 | ||||||
| Amortisation relating to inventory | — | — | ||||||
| Realised other commodity contracts | — | — | ||||||
| All-in sustaining costs | 338 | 2,512 | ||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | (60) | ||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 338 | 2,452 | ||||||
| All-in sustaining costs | 338 | 2,512 | ||||||
| Non-sustaining project capital expenditure | 5 | 313 | ||||||
| Lease payment non sustaining | — | 1 | ||||||
| Technology improvements | — | — | ||||||
| Non-sustaining exploration and study costs | 4 | 85 | ||||||
| Care and maintenance costs | — | 47 | ||||||
| Corporate and social responsibility costs not related to current operations | — | 38 | ||||||
| Other provisions | — | 2 | ||||||
| All-in costs | 347 | 2,998 | ||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | (62) | ||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 347 | 2,936 | ||||||
Gold sold – oz (000)(2) | 442 | 2,410 | ||||||
All-in sustaining cost per unit – $/oz(3) | 767 | 1,017 | ||||||
All-in cost per unit – $/oz(3) | 785 | 1,218 | ||||||
163
For the year ended 31 December 2019
AngloGold Ashanti operations – Total
(from continuing operations - in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||||||
| Total cash costs | ||||||||
Cost of sales per segmental information(5) | 428 | 2,626 | ||||||
| By-product revenue | (1) | (86) | ||||||
| Inventory change | 3 | (5) | ||||||
| Amortisation of intangible assets | — | — | ||||||
| Amortisation of tangible assets | (137) | (583) | ||||||
| Rehabilitation and other non-cash costs | (1) | (53) | ||||||
| Retrenchment costs | — | (4) | ||||||
| Total cash costs net of by-product revenue | 292 | 1,895 | ||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | (53) | ||||||
| Total cash costs net of by product revenue adjusted for non-controlling interests and non-gold producing companies | 292 | 1,841 | ||||||
Gold produced – oz (000)(2) | 445 | 2,415 | ||||||
Total cash costs (adjusted) per unit – $/oz(3) | 657 | 763 | ||||||
164
For the year ended 31 December 2018
Corporate and other
(in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||
| All-in sustaining costs | ||||
| Cost of sales per segmental information | 406 | 3,263 | ||
| Amortisation of tangible and intangible assets | (114 | ) | (809 | ) |
| Adjusted for decommissioning amortisation | 2 | 10 | ||
| Corporate administration and marketing related to current operations | — | 59 | ||
| Inventory writedown to net realisable value and other stockpile adjustments | 1 | 12 | ||
| Sustaining exploration and study costs | 1 | 69 | ||
| Total sustaining capital expenditure | 36 | 659 | ||
| All-in sustaining costs | 332 | 3,263 | ||
| Adjusted for non-controlling interests and non-gold producing companies | — | (58 | ) | |
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 332 | 3,205 | ||
| Adjusted for stockpile write-offs | (1 | ) | (17 | ) |
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 331 | 3,188 | ||
| All-in sustaining costs | 332 | 3,263 | ||
| Non-sustaining Project capex | 63 | 53 | ||
| Technology improvements | — | 14 | ||
| Non-sustaining exploration and study costs | 2 | 54 | ||
| Care and maintenance costs | — | 70 | ||
| Corporate and social responsibility costs not related to current operations | — | 40 | ||
| All-in costs | 397 | 3,494 | ||
| Adjusted for non-controlling interests and non-gold producing companies | — | (53 | ) | |
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 397 | 3,441 | ||
| Adjusted for stockpile write-offs | (1 | ) | (17 | ) |
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 396 | 3,424 | ||
| Gold sold – oz (000) | 347 | 3,220 | ||
| All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz | 955 | 990 | ||
| All-in cost per unit (excluding stockpile write-offs) – $/oz | 1,141 | 1,063 | ||
| JOINT VENTURES | SUBSIDIARIES | |||
| Cash costs | ||||
| Cost of sales per segmental information | 406 | 3,263 | ||
| Inventory change | 5 | 38 | ||
| Amortisation of intangible assets | — | (20 | ) | |
| Amortisation of tangible assets | (114 | ) | (789 | ) |
| Rehabilitation and other non-cash costs | (9 | ) | (43 | ) |
| Retrenchment costs | — | (14 | ) | |
| Total cash costs | 288 | 2,435 | ||
| Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | (41 | ) | |
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 288 | 2,394 | ||
| Gold produced – oz (000) | 356 | 3,250 | ||
| Total cash costs (adjusted) per unit – $/oz | 812 | 737 | ||
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | Tau Tona | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | Corporate (4) | ||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 148 | 260 | 408 | 251 | 230 | 481 | 194 | — | 1,083 | (2 | ) | ||||||||||||||||||
| Amortisation of tangible and intangible assets | (24 | ) | (47 | ) | (71 | ) | (53 | ) | (40 | ) | (93 | ) | (17 | ) | (1 | ) | (182 | ) | (7 | ) | |||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | 77 | |||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | 1 | 1 | (1 | ) | ||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | — | — | — | — | — | 1 | |||||||||||||||||||
| Total sustaining capital expenditure | 20 | 45 | 65 | 59 | 28 | 87 | 17 | 9 | 178 | 3 | |||||||||||||||||||
| All-in sustaining costs | 144 | 258 | 402 | 257 | 218 | 475 | 194 | 9 | 1,080 | 71 | |||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | — | — | — | 9 | |||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 144 | 258 | 402 | 257 | 218 | 475 | 194 | 9 | 1,080 | 80 | |||||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | — | — | (1 | ) | (1 | ) | — | |||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 144 | 258 | 402 | 257 | 218 | 475 | 194 | 8 | 1,079 | 80 | |||||||||||||||||||
| All-in sustaining costs | 144 | 258 | 402 | 257 | 218 | 475 | 194 | 9 | 1,080 | 71 | |||||||||||||||||||
| Non-sustaining Project capex | — | 2 | 2 | 26 | — | 26 | — | — | 28 | — | |||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | 16 | 16 | (1 | ) | ||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | — | — | — | — | — | — | — | 1 | |||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | — | — | — | — | 17 | |||||||||||||||||||
| All-in costs | 144 | 260 | 404 | 283 | 218 | 501 | 194 | 25 | 1,124 | 88 | |||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | — | — | — | 8 | |||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 144 | 260 | 404 | 283 | 218 | 501 | 194 | 25 | 1,124 | 96 | |||||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | — | — | (1 | ) | (1 | ) | — | |||||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 144 | 260 | 404 | 283 | 218 | 501 | 194 | 24 | 1,123 | 96 | |||||||||||||||||||
Gold sold - oz (000)(2) | 118 | 254 | 371 | 219 | 209 | 428 | 193 | — | 993 | — | |||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(3) | 1,226 | 1,018 | 1,084 | 1,170 | 1,044 | 1,108 | 1,006 | — | 1,088 | — | |||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(3) | 1,226 | 1,024 | 1,088 | 1,290 | 1,044 | 1,170 | 1,006 | — | 1,131 | — | |||||||||||||||||||
Corporate (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to | 76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation relating to inventory | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 73 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(2) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||||||||||||||||||||
(1)Adjusting for non-controlling interest of items included in calculation, to disclose the attributable portions only. Other consists of heap leach inventory.
(2)Attributable portion.
(3)In addition to the operational performances of the mines, all-in sustaining cost per ounce, all-in cost per ounce, total cash costs per ounce per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce and all-in cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
(4)Corporate includes non-gold producing subsidiaries.
(5)Refer to “Item 18: Financial Statements—Note 2—Segmental Information”.
Rounding of figures may result in computational discrepancies.
165
For the year ended 31 December 20152018
(in $ millions, except as otherwise noted)
Corporate (4) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | (6) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000) (2) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cash costs (adjusted) per unit – $/oz(3) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
166
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | Tau Tona | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | Corporate (4) | ||||||||||||||||||||
| Cash costs | |||||||||||||||||||||||||||||
| Cost of sales per segmental information | 148 | 260 | 408 | 251 | 230 | 481 | 194 | — | 1,083 | (2 | ) | ||||||||||||||||||
| Inventory change | — | — | — | — | — | — | — | — | — | 1 | |||||||||||||||||||
| Amortisation of intangible assets | (2 | ) | (5 | ) | (7 | ) | (4 | ) | (4 | ) | (8 | ) | (2 | ) | (1 | ) | (18 | ) | (3 | ) | |||||||||
| Amortisation of tangible assets | (22 | ) | (42 | ) | (64 | ) | (49 | ) | (35 | ) | (84 | ) | (15 | ) | (1 | ) | (164 | ) | (4 | ) | |||||||||
| Rehabilitation and other non-cash costs | (3 | ) | (8 | ) | (11 | ) | (5 | ) | (4 | ) | (9 | ) | (1 | ) | 1 | (20 | ) | — | |||||||||||
| Retrenchment costs | (2 | ) | (3 | ) | (4 | ) | (2 | ) | (2 | ) | (4 | ) | — | 1 | (7 | ) | (1 | ) | |||||||||||
| Total cash costs | 119 | 202 | 322 | 191 | 185 | 376 | 176 | — | 874 | (9 | ) | ||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | — | — | — | 9 | |||||||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 119 | 202 | 322 | 191 | 185 | 376 | 176 | — | 874 | — | |||||||||||||||||||
Gold produced - oz (000) (2) | 117 | 254 | 371 | 219 | 209 | 428 | 193 | — | 992 | — | |||||||||||||||||||
Total cash costs per unit – $/oz(3) | 1,014 | 798 | 867 | 874 | 883 | 879 | 912 | — | 881 | — | |||||||||||||||||||
For the year ended 31 December 20152018
Operations in DRC,Africa (DRC, Ghana, Guinea, Mali and TanzaniaTanzania)
(in $ millions, except as otherwise noted)
| DRC | Mali | Joint | Ghana | Guinea | Tanzania | Africa other | Subsidiaries | |||||||||||||||||||||||||||||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 373 | 42 | 65 | 480 | 233 | (6) | 286 | 612 | 2 | 1,127 | ||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | (1) | — | — | — | (2) | — | (2) | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (149) | (7) | (9) | (165) | (29) | — | (38) | (144) | (3) | (214) | ||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | 1 | 3 | — | 4 | — | — | 2 | 2 | — | 4 | ||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | 1 | — | 7 | 8 | — | 16 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 54 | 2 | — | 56 | 43 | — | 11 | 59 | — | 113 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation relating to inventory | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 278 | 40 | 56 | 374 | 248 | (6) | 267 | 535 | — | 1,044 | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (40) | — | — | (40) | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 278 | 40 | 56 | 374 | 248 | (6) | 227 | 535 | — | 1,004 | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 278 | 40 | 56 | 374 | 248 | (6) | 267 | 535 | — | 1,044 | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | 10 | — | 1 | 11 | — | 48 | 85 | — | — | 133 | ||||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | 1 | — | — | 1 | — | 1 | 10 | — | — | 11 | ||||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance costs | — | — | — | — | — | 39 | — | — | — | 39 | ||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 289 | 40 | 57 | 386 | 248 | 82 | 362 | 535 | — | 1,227 | ||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (54) | — | — | (54) | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 289 | 40 | 57 | 386 | 248 | 82 | 308 | 535 | — | 1,173 | ||||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(2) | 370 | 30 | 58 | 459 | 254 | — | 244 | 568 | — | 1,066 | ||||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per unit – $/oz(3) | 752 | 1,321 | 990 | 820 | 977 | — | 930 | 940 | — | 941 | ||||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit – $/oz(3) | 782 | 1,321 | 1,005 | 846 | 977 | — | 1,261 | 940 | — | 1,099 | ||||||||||||||||||||||||||||||||||||||||||||||
167
| DRC | MALI | JOINT | GHANA | GUINEA | TANZANIA | Continental Africa other | SUBSIDIARIES | |||||||||||||||||||||
| Kibali | Morila | Sadiola | VENTURES | Iduapriem | Obuasi | Siguiri | Geita | |||||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||||
| Cost of sales per segmental information | 266 | 45 | 67 | 378 | 219 | 64 | 280 | 404 | 2 | 969 | ||||||||||||||||||
| Amortisation of tangible and intangible assets | (87 | ) | (12 | ) | (9 | ) | (108 | ) | (32 | ) | (22 | ) | (26 | ) | (148 | ) | (3 | ) | (231 | ) | ||||||||
| Adjusted for decommissioning amortisation | — | 2 | 1 | 3 | — | 4 | 2 | 3 | — | 9 | ||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | (2 | ) | (2 | ) | — | — | — | — | — | — | ||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | 2 | — | 2 | 2 | — | — | 3 | — | 5 | ||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | 2 | 17 | 6 | 6 | (1 | ) | 30 | |||||||||||||||||
| Total sustaining capital expenditure | 7 | 5 | 4 | 16 | 15 | 3 | 29 | 116 | 1 | 164 | ||||||||||||||||||
| All-in sustaining costs | 186 | 42 | 61 | 289 | 206 | 66 | 291 | 384 | (1 | ) | 946 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (43 | ) | — | (1 | ) | (44 | ) | |||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 186 | 42 | 61 | 289 | 206 | 66 | 248 | 384 | (2 | ) | 902 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | (2 | ) | — | (2 | ) | (12 | ) | — | — | (3 | ) | — | (15 | ) | |||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 186 | 40 | 61 | 287 | 194 | 66 | 248 | 381 | (2 | ) | 887 | |||||||||||||||||
| All-in sustaining costs | 186 | 42 | 61 | 289 | 206 | 66 | 291 | 384 | (1 | ) | 946 | |||||||||||||||||
| Non-sustaining Project capex | 117 | — | (2 | ) | 115 | — | 20 | — | — | — | 20 | |||||||||||||||||
| Non-sustaining exploration and study costs | 1 | — | — | 1 | — | — | 1 | — | — | 1 | ||||||||||||||||||
| Care and maintenance costs | — | — | — | — | — | 67 | — | — | — | 67 | ||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | 1 | — | — | — | 1 | ||||||||||||||||||
| All-in costs | 304 | 42 | 59 | 405 | 206 | 154 | 292 | 384 | (1 | ) | 1,035 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | — | — | (44 | ) | — | — | (44 | ) | ||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 304 | 42 | 59 | 405 | 206 | 154 | 248 | 384 | (1 | ) | 991 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | (2 | ) | — | (2 | ) | (12 | ) | — | — | (3 | ) | — | (15 | ) | |||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 304 | 40 | 59 | 403 | 194 | 154 | 248 | 381 | (1 | ) | 976 | |||||||||||||||||
Gold sold - oz (000)(2) | 290 | 49 | 69 | 408 | 190 | 56 | 256 | 531 | — | 1,033 | ||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit – $/oz(3) | 642 | 815 | 886 | 704 | 1,020 | 1,185 | 965 | 717 | — | 859 | ||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) – $/oz(3) | 1,051 | 815 | 852 | 989 | 1,020 | 2,750 | 969 | 717 | — | 944 | ||||||||||||||||||
For the year ended 31 December 20152018
Operations in DRC,Africa (DRC, Ghana, Guinea, Mali and TanzaniaTanzania)
(in $ millions, except as otherwise noted)
| DRC | Mali | Joint | Ghana | Guinea | Tanzania | Africa other | Subsidiaries | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kibali | Morila | Sadiola | Ventures | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 373 | 42 | 65 | 480 | 233 | (6) | 286 | 612 | 2 | 1,127 | |||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | (1) | — | — | — | (2) | — | (2) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | (3) | — | 1 | (2) | — | — | (3) | (2) | — | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | (149) | (7) | (9) | (165) | (29) | — | (38) | (144) | (3) | (214) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (1) | (1) | — | (2) | — | 6 | (5) | (10) | — | (8) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | (2) | (2) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 219 | 34 | 55 | 308 | 204 | — | 240 | 454 | — | 898 | |||||||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | (36) | — | — | (36) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 219 | 34 | 55 | 308 | 204 | — | 204 | 454 | — | 862 | |||||||||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000) (2) | 363 | 30 | 59 | 452 | 254 | — | 242 | 564 | — | 1,060 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(3) | 600 | 1,145 | 938 | 680 | 804 | — | 844 | 804 | — | 813 | |||||||||||||||||||||||||||||||||||||||||||||||||
168
| DRC | MALI | JOINT | GHANA | GUINEA | TANZANIA | Continental Africa other | SUBSIDIARIES | ||||||||||||||||||||||
| Kibali | Morila | Sadiola | VENTURES | Iduapriem | Obuasi | Siguiri | Geita | ||||||||||||||||||||||
| Cash costs | |||||||||||||||||||||||||||||
| Cost of sales per segmental information | 266 | 45 | 67 | 378 | 219 | 64 | 280 | 404 | 2 | 969 | |||||||||||||||||||
| Inventory change | — | — | — | — | 1 | (3 | ) | (6 | ) | (6 | ) | — | (14 | ) | |||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | (2 | ) | (2 | ) | |||||||||||||||||
| Amortisation of tangible assets | (87 | ) | (12 | ) | (8 | ) | (108 | ) | (32 | ) | (22 | ) | (26 | ) | (148 | ) | (1 | ) | (229 | ) | |||||||||
| Rehabilitation and other non-cash costs | (3 | ) | — | (1 | ) | (4 | ) | 4 | 12 | 1 | 3 | (1 | ) | 19 | |||||||||||||||
| Retrenchment costs | — | 1 | — | 1 | — | — | — | — | — | — | |||||||||||||||||||
| Total cash costs | 176 | 34 | 57 | 267 | 192 | 51 | 248 | 253 | (1 | ) | 743 | ||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | — | — | (37 | ) | — | — | (37 | ) | |||||||||||||||||
Associates and equity accounted joint ventures' share of total cash costs(2) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 176 | 34 | 57 | 267 | 192 | 51 | 211 | 253 | (1 | ) | 706 | ||||||||||||||||||
Gold produced - oz (000) (2) | 289 | 49 | 69 | 407 | 193 | 53 | 255 | 527 | — | 1,028 | |||||||||||||||||||
Total cash costs per unit - $/oz(3) | 609 | 698 | 818 | 655 | 995 | 966 | 827 | 480 | — | 687 | |||||||||||||||||||
For the year ended 31 December 20152018
Operations in Australia Argentina and Brazilthe Americas (Argentina and Brazil)
(in $ millions, except as otherwise noted)
| Australia | TOTAL AUSTRALIA | Argentina | Brazil | Americas other | Total Americas | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | ||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 310 | 293 | 18 | 622 | 325 | 382 | 129 | 2 | 838 | ||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | (2) | — | (2) | (111) | (17) | — | — | (128) | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (51) | (92) | (6) | (149) | (50) | (99) | (42) | — | (192) | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | 1 | 1 | — | 2 | (3) | (6) | (2) | (1) | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Lease payment sustaining | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | 7 | 5 | — | 12 | 2 | 4 | 4 | — | 10 | ||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 79 | 74 | 2 | 154 | 36 | 96 | 35 | 9 | 176 | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation relating to inventory | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | — | — | (5) | (5) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 346 | 279 | 15 | 639 | 199 | 360 | 124 | 5 | 688 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (15) | — | — | (9) | (24) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 346 | 279 | 15 | 639 | 184 | 360 | 124 | (4) | 664 | ||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 346 | 279 | 15 | 639 | 199 | 360 | 124 | 5 | 688 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | 2 | — | 2 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Lease payment non sustaining | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | 18 | 18 | — | 2 | — | 34 | 36 | ||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | 2 | 12 | 3 | (1) | 16 | ||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 346 | 281 | 32 | 659 | 201 | 374 | 127 | 38 | 740 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (15) | — | — | — | (15) | ||||||||||||||||||||||||||||||||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 346 | 281 | 33 | 659 | 186 | 374 | 127 | 38 | 725 | ||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(2) | 283 | 332 | — | 615 | 282 | 370 | 131 | — | 783 | ||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost per unit - $/oz(3) | 1,223 | 843 | — | 1,038 | 652 | 973 | 945 | — | 855 | ||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit - $/oz(3) | 1,223 | 848 | — | 1,070 | 656 | 1,015 | 965 | — | 932 | ||||||||||||||||||||||||||||||||||||||||||||
169
| Australia | TOTAL AUSTRALIA | ARGENTINA | Brazil | Americas other | TOTAL AMERICAS | |||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||||||
| All-in sustaining costs | �� | |||||||||||||||||||||||||
| Cost of sales per segmental information | 239 | 266 | 20 | 525 | 244 | 335 | 137 | 3 | 719 | |||||||||||||||||
| Amortisation of tangible and intangible assets | (25 | ) | (88 | ) | (4 | ) | (117 | ) | (58 | ) | (125 | ) | (57 | ) | — | (240 | ) | |||||||||
| Adjusted for decommissioning amortisation | — | 3 | — | 3 | 1 | — | — | (1 | ) | — | ||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | 1 | — | — | 1 | |||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | 1 | 4 | — | 5 | |||||||||||||||||
| Sustaining exploration and study costs | 2 | 8 | 5 | 15 | 3 | 2 | 2 | 9 | 16 | |||||||||||||||||
| Total sustaining capital expenditure | 29 | 49 | — | 78 | 67 | 89 | 33 | 1 | 190 | |||||||||||||||||
| All-in sustaining costs | 245 | 238 | 21 | 504 | 257 | 303 | 119 | 12 | 691 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (19 | ) | — | — | (10 | ) | (29 | ) | ||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 245 | 238 | 21 | 504 | 238 | 303 | 119 | 2 | 662 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | (1 | ) | (4 | ) | — | (5 | ) | ||||||||||||||
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 245 | 238 | 21 | 504 | 238 | 302 | 115 | 2 | 657 | |||||||||||||||||
| All-in sustaining costs | 245 | 238 | 21 | 504 | 257 | 303 | 119 | 12 | 691 | |||||||||||||||||
| Non-sustaining Project capex | — | — | — | — | — | — | — | 6 | 6 | |||||||||||||||||
| Non-sustaining exploration and study costs | — | — | 6 | 6 | — | 2 | — | 51 | 53 | |||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | 7 | — | 1 | 8 | |||||||||||||||||
| All-in costs | 245 | 238 | 27 | 510 | 257 | 312 | 119 | 70 | 758 | |||||||||||||||||
Adjusted for non-controlling interests and non -gold producing companies(1) | — | — | — | — | (19 | ) | — | — | — | (19 | ) | |||||||||||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 245 | 238 | 27 | 510 | 238 | 312 | 119 | 70 | 739 | |||||||||||||||||
| Adjusted for stockpile write-offs | — | — | — | — | — | (1 | ) | (4 | ) | — | (5 | ) | ||||||||||||||
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 245 | 238 | 27 | 510 | 238 | 311 | 115 | 70 | 734 | |||||||||||||||||
Gold sold - oz (000)(2) | 221 | 354 | — | 575 | 273 | 423 | 133 | — | 829 | |||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(3) | 1,110 | 671 | — | 875 | 873 | 712 | 861 | — | 792 | |||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(3) | 1,110 | 671 | — | 886 | 874 | 733 | 865 | — | 885 | |||||||||||||||||
For the year ended 31 December 20152018
Operations in Australia Argentina and Brazilthe Americas (Argentina and Brazil)
(in $ millions, except as otherwise noted)
| Australia | TOTAL AUSTRALIA | Argentina | Brazil | Americas other | Total America | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(5) | 310 | 293 | 19 | 622 | 325 | 382 | 129 | 2 | 838 | ||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | (2) | — | (2) | (111) | (17) | — | — | (128) | ||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | 7 | 5 | — | 12 | (7) | (6) | (3) | — | (16) | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | (51) | (92) | (6) | (149) | (50) | (99) | (42) | (1) | (192) | ||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | — | (5) | (1) | (6) | (10) | 4 | 2 | — | (4) | ||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | — | — | (2) | (1) | — | — | (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 266 | 199 | 12 | 477 | 145 | 263 | 86 | 1 | 495 | ||||||||||||||||||||||||||||||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | (11) | — | — | — | (11) | ||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 266 | 199 | 12 | 477 | 134 | 263 | 86 | 1 | 484 | ||||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000) (2) | 289 | 336 | — | 625 | 282 | 364 | 130 | — | 776 | ||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(3) | 920 | 594 | — | 762 | 476 | 723 | 660 | — | 624 | ||||||||||||||||||||||||||||||||||||||||||||
170
| Australia | TOTAL AUSTRALIA | ARGENTINA | Brazil | Americas other | TOTAL AMERICAS | |||||||||||||||||||||
| Sunrise Dam | Tropicana | Australia other | Cerro Vanguardia | AngloGold Ashanti Mineração | Serra Grande | |||||||||||||||||||||
| Cash costs | ||||||||||||||||||||||||||
| Cost of sales per segmental information | 239 | 266 | 20 | 525 | 244 | 335 | 137 | 3 | 719 | |||||||||||||||||
| Inventory change | (3 | ) | (6 | ) | (2 | ) | (11 | ) | 4 | — | (3 | ) | — | 1 | ||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | (12 | ) | (5 | ) | — | (17 | ) | ||||||||||||||
| Amortisation of tangible assets | (25 | ) | (88 | ) | (4 | ) | (117 | ) | (58 | ) | (113 | ) | (52 | ) | — | (223 | ) | |||||||||
| Rehabilitation and other non-cash costs | (1 | ) | (3 | ) | — | (4 | ) | (1 | ) | 10 | 7 | (1 | ) | 15 | ||||||||||||
| Retrenchment costs | — | — | — | — | (1 | ) | (2 | ) | — | — | (3 | ) | ||||||||||||||
| Total cash costs | 210 | 169 | 14 | 393 | 188 | 218 | 84 | 2 | 492 | |||||||||||||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | — | — | — | (14 | ) | — | — | — | (14 | ) | |||||||||||||||
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 210 | 169 | 14 | 393 | 174 | 218 | 84 | 2 | 478 | |||||||||||||||||
Gold produced - oz (000) (2) | 216 | 344 | — | 560 | 278 | 421 | 132 | — | 831 | |||||||||||||||||
Total cash costs per unit - $/oz(3) | 970 | 492 | — | 702 | 625 | 518 | 635 | — | 576 | |||||||||||||||||
For the year ended 31 December 20152018
AngloGold Ashanti operations – Total
(from continuing operations - in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||||||
| All-in sustaining costs | ||||||||
Cost of sales per segmental information(5) | 480 | 2,584 | ||||||
| By-product revenue | (1) | (133) | ||||||
| Amortisation of tangible and intangible assets | (165) | (558) | ||||||
| Adjusted for decommissioning and inventory amortisation | 4 | (5) | ||||||
| Lease payment sustaining | — | — | ||||||
| Corporate administration and marketing related to current operations | — | 76 | ||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | ||||||
| Sustaining exploration and study costs | — | 38 | ||||||
| Total sustaining capital expenditure | 56 | 445 | ||||||
| Amortisation relating to inventory | — | — | ||||||
| Realised other commodity contracts | — | (5) | ||||||
| All-in sustaining costs | 374 | 2,443 | ||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | (64) | ||||||
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 374 | 2,379 | ||||||
| All-in sustaining costs | 374 | 2,443 | ||||||
| Non-sustaining project capital expenditure | 11 | 133 | ||||||
| Lease payment non sustaining | — | — | ||||||
| Technology improvements | — | — | ||||||
| Non-sustaining exploration and study costs | 1 | 65 | ||||||
| Care and maintenance costs | — | 39 | ||||||
| Care and maintenance costs, Corporate and social responsibility costs not related to current operations | — | 22 | ||||||
| Other provisions | — | (1) | ||||||
| All-in costs | 386 | 2,702 | ||||||
Adjusted for non-controlling interests and non-gold producing companies(1) | — | (69) | ||||||
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 386 | 2,634 | ||||||
Gold sold - oz (000)(2) | 459 | 2,463 | ||||||
All-in sustaining cost per unit - $/oz(3) | 820 | 970 | ||||||
All-in cost per unit - $/oz(3) | 846 | 1,075 | ||||||
171
| JOINT VENTURES | SUBSIDIARIES | |||
| All-in sustaining costs | ||||
| Cost of sales per segmental information | 378 | 3,294 | ||
| Amortisation of tangible and intangible assets | (108 | ) | (777 | ) |
| Adjusted for decommissioning amortisation | 3 | 12 | ||
| Corporate administration and marketing related to current operations | (2 | ) | 78 | |
| Inventory writedown to net realisable value and other stockpile adjustments | 2 | 10 | ||
| Sustaining exploration and study costs | — | 62 | ||
| Total sustaining capital expenditure | 16 | 613 | ||
| All-in sustaining costs | 289 | 3,292 | ||
| Adjusted for non-controlling interests and non-gold producing companies | — | (64 | ) | |
| All-in sustaining costs adjusted for non-controlling interests and non-gold producing companies | 289 | 3,228 | ||
| Adjusted for stockpile write-offs | (2 | ) | (21 | ) |
| All-in sustaining costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 287 | 3,207 | ||
| All-in sustaining costs | 289 | 3,292 | ||
| Non-sustaining Project capex | 115 | 54 | ||
| Technology improvements | — | 16 | ||
| Non-sustaining exploration and study costs | 1 | 61 | ||
| Care and maintenance costs | — | 67 | ||
| Care and maintenance costs, Corporate and social responsibility costs not related to current operations | — | 26 | ||
| All-in costs | 405 | 3,516 | ||
| Adjusted for non-controlling interests and non-gold producing companies | — | (55 | ) | |
| All-in costs adjusted for non-controlling interests and non-gold producing companies | 405 | 3,461 | ||
| Adjusted for stockpile write-offs | (2 | ) | (21 | ) |
| All-in costs adjusted for non-controlling interests, non-gold producing companies and stockpile write-offs | 403 | 3,440 | ||
| Gold sold - oz (000) | 408 | 3,430 | ||
| All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz | 704 | 935 | ||
| All-in cost per unit (excluding stockpile write-offs) - $/oz | 989 | 1,003 | ||
For the year ended 31 December 20152018
AngloGold Ashanti operations - Total
(from continuing operations - in $ millions, except as otherwise noted)
| JOINT VENTURES | SUBSIDIARIES | |||||||
| Total cash costs | ||||||||
Cost of sales per segmental information(5) | 480 | 2,584 | ||||||
| By-product revenue | (1) | (133) | ||||||
| Inventory change | (2) | (9) | ||||||
| Amortisation of intangible assets | — | (5) | ||||||
| Amortisation of tangible assets | (165) | (553) | ||||||
| Rehabilitation and other non-cash costs | (2) | (17) | ||||||
| Retrenchment costs | (2) | (4) | ||||||
| Total cash costs net of by-product revenue | 308 | 1,863 | ||||||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | (47) | ||||||
| Total cash costs net of by-product revenue adjusted for non-controlling interests and non-gold producing companies | 308 | 1,816 | ||||||
Gold produced - oz (000)(2) | 452 | 2,460 | ||||||
Total cash costs (adjusted) per unit - $/oz(3) | 680 | 743 | ||||||
172
Tables provided for information purposes for reconciliation of Non-GAAP to GAAP metrics (South African operations)
For the year ended 31 December 2020
Operations in South Africa
(in $ millions, except as otherwise noted)
| Mponeng | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | |||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(3) | 158 | 158 | 124 | 4 | 287 | ||||||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 27 | 27 | 7 | 1 | 35 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 184 | 185 | 131 | 5 | 321 | ||||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 184 | 185 | 131 | 5 | 321 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Lease Payment non-sustaining | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | — | — | 17 | 17 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other provisions | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 184 | 185 | 131 | 22 | 338 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(1) | 135 | 135 | 109 | — | 247 | ||||||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(2) | 1,365 | 1,365 | 1,201 | — | 1,296 | ||||||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(2) | 1,366 | 1,366 | 1,201 | — | 1,367 | ||||||||||||||||||||||||||||||||||||||||||||||||
(1)Attributable portion (excluding pre-production ounces).
(2)In addition to the operational performances of the mines, all-in sustaining cost per ounce, all-in cost per ounce and total cash costs per ounce are affected by fluctuations in the currency exchange rate. AngloGold Ashanti reports all-in sustaining cost per ounce and all-in cost per ounce calculated to the nearest US dollar amount and gold sold in ounces. AngloGold Ashanti reports total cash costs per ounce calculated to the nearest US dollar amount and gold produced in ounces.
(3)Refer to “Item 18: Financial Statements—Note 2—Segmental Information”.
173
| JOINT VENTURES | SUBSIDIARIES | |||
| Cash costs | ||||
| Cost of sales per segmental information | 378 | 3,294 | ||
| Inventory change | — | (23 | ) | |
| Amortisation of intangible assets | — | (40 | ) | |
| Amortisation of tangible assets | (108 | ) | (737 | ) |
| Rehabilitation and other non-cash costs | (4 | ) | 10 | |
| Retrenchment costs | 1 | (11 | ) | |
| Total cash costs | 267 | 2,493 | ||
Adjusted for non-controlling interests, non-gold producing companies and other(1) | — | (42 | ) | |
| Total cash costs adjusted for non-controlling interests and non-gold producing companies | 267 | 2,451 | ||
| Gold produced - oz (000) | 407 | 3,411 | ||
| Total cash costs per unit - $/oz | 655 | 719 | ||
Operations in South Africa
(in $ millions, except as otherwise noted)
| Mponeng | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | |||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(3) | 158 | 158 | 124 | 4 | 287 | ||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (1) | (1) | — | — | (1) | ||||||||||||||||||||||||||||||||||||||||||
| Inventory change | (1) | (1) | (2) | (4) | (7) | ||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | (1) | (1) | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 155 | 155 | 122 | — | 277 | ||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000)(1) | 134 | 134 | 107 | — | 241 | ||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(2) | 1,164 | 1,164 | 1,131 | — | 1,149 | ||||||||||||||||||||||||||||||||||||||||||
174
For the year ended 31 December 2019
Operations in South Africa
(in $ millions, except as otherwise noted)
| Mponeng | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | ||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | ||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(3) | 287 | 287 | 189 | 3 | 479 | |||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | — | — | — | (1) | |||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (47) | (47) | (13) | (1) | (61) | |||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | (3) | (3) | (6) | |||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | 47 | 47 | 7 | 3 | 57 | |||||||||||||||||||||||||||||||||||||||
| Realised other commodity contracts | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 287 | 287 | 180 | 2 | 469 | |||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 287 | 289 | 180 | 2 | 469 | |||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | 2 | — | — | — | 2 | |||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | — | — | 42 | 42 | |||||||||||||||||||||||||||||||||||||||
| All-in costs | 289 | 289 | 180 | 44 | 513 | |||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(1) | 242 | 242 | 172 | — | 414 | |||||||||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(2) | 1,186 | 1,187 | 1,043 | — | 1,132 | |||||||||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(2) | 1,197 | 1,198 | 1,043 | — | 1,240 | |||||||||||||||||||||||||||||||||||||||
175
For the year ended 31 December 2019
Operations in South Africa
(in $ millions, except as otherwise noted)
| Mponeng | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | |||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(3) | 287 | 287 | 189 | 3 | 479 | ||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | — | — | — | — | (1) | ||||||||||||||||||||||||||||||||||||||||||
| Inventory change | 3 | 3 | (1) | — | 2 | ||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | (47) | (47) | (13) | (1) | (61) | ||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (2) | (2) | (2) | (2) | (6) | ||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | (2) | (2) | — | — | (2) | ||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 239 | 239 | 173 | — | 411 | ||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000)(1) | 244 | 244 | 175 | — | 419 | ||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(2) | 976 | 976 | 987 | — | 981 | ||||||||||||||||||||||||||||||||||||||||||
176
For the year ended 31 December 2018
Operations in South Africa
(in $ millions, except as otherwise noted)
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | ||||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(3) | 29 | 48 | 77 | 320 | 320 | 193 | — | 590 | |||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (2) | (4) | (6) | — | — | — | — | (6) | |||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible and intangible assets | — | — | — | (57) | (57) | (15) | — | (72) | |||||||||||||||||||||||||||||||||||||||||||||
| Adjusted for decommissioning and inventory amortisation | — | — | — | — | — | (3) | — | (3) | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate administration and marketing related to current operations | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Inventory writedown to net realisable value and other stockpile adjustments | — | — | — | — | — | — | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
| Sustaining exploration and study costs | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Total sustaining capital expenditure | — | 7 | 7 | 49 | 49 | 12 | — | 68 | |||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 27 | 51 | 78 | 312 | 312 | 187 | 1 | 578 | |||||||||||||||||||||||||||||||||||||||||||||
| All-in sustaining costs | 27 | 51 | 78 | 312 | 312 | 187 | 1 | 578 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining project capital expenditure | — | — | — | 5 | 5 | — | — | 5 | |||||||||||||||||||||||||||||||||||||||||||||
| Technology improvements | — | — | — | — | — | — | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||
| Non-sustaining exploration and study costs | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Care and maintenance | — | — | — | — | — | — | 35 | 35 | |||||||||||||||||||||||||||||||||||||||||||||
| Corporate and social responsibility costs not related to current operations | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| All-in costs | 27 | 51 | 78 | 317 | 317 | 187 | 40 | 622 | |||||||||||||||||||||||||||||||||||||||||||||
Gold sold - oz (000)(1) | 13 | 41 | 53 | 265 | 265 | 171 | — | 490 | |||||||||||||||||||||||||||||||||||||||||||||
All-in sustaining cost (excluding stockpile write-offs) per unit - $/oz(2) | 2,115 | 1,247 | 1,452 | 1,177 | 1,177 | 1,094 | — | 1,178 | |||||||||||||||||||||||||||||||||||||||||||||
All-in cost per unit (excluding stockpile write-offs) - $/oz(2) | 2,115 | 1,247 | 1,452 | 1,196 | 1,196 | 1,094 | — | 1,268 | |||||||||||||||||||||||||||||||||||||||||||||
177
For the year ended 31 December 2018
Operations in South Africa
(in $ millions, except as otherwise noted)
| Kopanang | Moab Khotsong | Vaal River Operations | Mponeng | West Wits Operations | Surface Operations | South Africa other | Total South Africa (Operations) | ||||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales per segmental information(3) | 29 | 48 | 77 | 320 | 320 | 193 | — | 590 | |||||||||||||||||||||||||||||||||||||||||||||
| By-product revenue | (2) | (4) | (6) | — | — | — | — | (6) | |||||||||||||||||||||||||||||||||||||||||||||
| Inventory change | — | (1) | (1) | — | — | (4) | — | (5) | |||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of intangible assets | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Amortisation of tangible assets | — | — | — | (57) | (57) | (15) | — | (72) | |||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation and other non-cash costs | (2) | (1) | (3) | (4) | (4) | 2 | 2 | (3) | |||||||||||||||||||||||||||||||||||||||||||||
| Retrenchment costs | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Total cash costs net of by-product revenue | 25 | 42 | 67 | 259 | 259 | 176 | 2 | 504 | |||||||||||||||||||||||||||||||||||||||||||||
Gold produced - oz (000) (1) | 12 | 39 | 51 | 265 | 265 | 171 | — | 487 | |||||||||||||||||||||||||||||||||||||||||||||
Total cash costs per unit - $/oz(2) | 2,002 | 1,083 | 1,304 | 977 | 983 | 1,030 | — | 1,033 | |||||||||||||||||||||||||||||||||||||||||||||
178
5B. LIQUIDITY AND CAPITAL RESOURCES
In the board’s opinion, AngloGold Ashanti’s working capital is sufficient to meet the company’s present requirements.
Cash flows from operating activities were $997$1,545 million in 2017, $1892020, $587 million, or 1661 percent, lowerhigher than the 20162019 amount of $1,186$958 million. The decreaseincrease in cash flows generated by operations was mainly due to increased total cash costsan increase in revenue from gold sales due to an increase in the gold price and an increase in dividends received from joint ventures, partially offset by increased revenues from a higher gold price received and increased production.an increase in production costs which was impacted by unfavourable working capital movements.
Net cash outflow from operating working capital items amounted to $156$238 million in 2017,2020, compared with an outflow of $76$165 million in 2016.2019. The outflow from operating working capital mainly relates to inventories, the VAT lock-up at Geita and increased export-duty receivables at Cerro Vanguardia. In Tanzania, on 1 July 2020, the Finance Act, 2020 (No. 8) became effective, amending the Value Added Tax Act, 2014 (No. 5), without retrospective effect, specifically by deleting the disqualification of refunds due to exporters of ‘raw minerals’. This allows for the recovery of VAT refunds at Geita for mineral exporters from July 2020 onwards. Discussions with the Tanzanian tax authorities are ongoing to resolve our historical claims for VAT input credit refunds for the period from July 2017 to June 2020, while VAT claims from July 2020 onwards are subject to verification procedures by such authorities before any refunds will be received. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Africa—Tanzania”. In Argentina, CVSA had a cash balance of $137 million equivalent as at 31 December 2020, of which $50 million is currently eligible to be declared as dividends. Application has been made to the Argentinean Central Bank to approve $11 million of this eligible amount to be paid offshore to the company, however, approval remains pending. The cash is fully available for CVSA’s operational requirements. See “Item 4B: Business Overview—Regulatory Environment Enabling AngloGold Ashanti to Mine—Americas—Argentina”.
Comparison of operating activities in 2019 with 2018
Cash flows from operating activities were $1,186$958 million in 2016, $472019, $102 million, or four12 percent, higher than the 20152018 amount of $1,139$856 million. The increase in cash flows providedgenerated by operations was mainly due to increased revenuesan increase in revenue from a highergold sales due to an increase in the average gold price received partially offset by lower production.an increase in production costs and a decrease in dividends received from joint ventures.
Net cash outflow from operating working capital items amounted to $76$165 million in 2016,2019, compared with an inflowoutflow of $89$122 million in 2015.2018.
Cash flows from investing activities amounted to a net outflow of $448 million in 2020, $235 million or 34 percent, lower than 2019 outflow of $683 million. The decrease in cash outflow was largely due to $200 million proceeds on disposal of discontinued assets and subsidiaries (South Africa asset disposal group) and $26 million proceeds from disposal of joint ventures (Sadiola and Morila).
Comparison of investing activities in 2019 with 2018
Cash flows from investing activities amounted to a net outflow of $683 million in 2019, $122 million or 22 percent, higher than 2018 outflow of $561 million. The increase was largely due to an increase in capital expenditure by $128 million, or 22 percent, from $575 million in 2018 to $703 million in 2019. The capital expenditure increase was largely due to increased expenditure of $198 million on the Obuasi redevelopment project partly offset by lower project capital expenditure at Siquiri of $78 million with commissioning of the CIL combination plant during 2019.
179
Cash flows from financing activities
Comparison of financing activities in 2020 with 2019
Cash flows from financing activities in the year ended 31 December 20172020 amounted to a net outflow of $148$329 million, which is a change of $615$152 million from an outflow of $763$177 million in the year ended 31 December 2016. Cash inflows from proceeds2019. Proceeds from borrowings in 20172020 increased by $2,058 million from $168 million in 2019 to $2,226 million in 2020. In order to safeguard the balance sheet during the COVID-19 pandemic, AngloGold Ashanti took proactive steps by fully drawing on the $1.4 billion multi-currency revolving credit facility in March 2020 to bolster liquidity. All amounts were repaid by 31 December 2020 and the $1.4 billion multi-currency revolving credit facility is undrawn as at 15 March 2021. In addition, in April 2020 AngloGold Ashanti secured a new standby credit facility of $1.0 billion in order to provide additional liquidity at the onset of the COVID-19 pandemic. The $1.0 billion standby facility, which remained undrawn, was cancelled on 1 October 2020. At the start of October 2020, AngloGold Ashanti Holdings plc issued a 10-year bond, fully and unconditionally guaranteed by AngloGold Ashanti Limited, with a semi-annual coupon of 3.750% per annum maturing on 1 October 2030 (subject to early redemption).
Cash outflows from repayment of borrowings increased by $2,187 million from $123 million during the year ended 31 December 2019 to $2,310 million during the year ended 31 December 2020. This increase was mainly due to the repayment of a 10-year ($700 million) bond issued during April 2010 and repaid at maturity April 2020 and the repayment of the $1.4 billion multi-currency revolving credit facility, which had been fully drawn.
Finance costs paid decreased by $19 million from $137 million in 2019 to $118 million in 2020. The decrease was due to a combination of reduced borrowings, reduced interest rates, interest capitalised against the Obuasi redevelopment project and lower lease liabilities. The 10-year $700 million bond offering priced at 3.750% per annum assisted in reducing finance costs by replacing relatively more expensive debt.
Other borrowing costs increased from nil in 2019 to $33 million in 2020 and mainly relate to costs associated with the $1.0 standby credit facility and underwriting fees and other fees related to the 10-year $700 million bond offering priced at 3.750% per annum.
Dividends paid to non-controlling interests decreased by $7 million from $16 million in 2019 to $9 million in 2020. These dividends were paid by our non-wholly owned subsidiaries CVSA and Siguiri to their respective non-AGA related shareholders.
During 2020, the company declared and paid a dividend of $38 million to its shareholders, compared to $27 million in 2019.
Comparison of financing activities in 2019 with 2018
Cash flows from financing activities in the year ended 31 December 2019 amounted to $815a net outflow of $177 million, andwhich is a change of $216 million from an outflow of $393 million in the year ended 31 December 2018. Proceeds from borrowings in 2019 decreased by $585 million from $753 million in 2018 to $168 million in 2019. This decrease included a $155$21 million drawdown on the $1.0$1.4 billion syndicated revolving credit facility, $42 million drawdown on the A$500 million syndicated revolving credit facility, $540$130 million in proceeds from the local borrowings facilities in South Africa and proceeds from other small loans amounting to $78$17 million.
Cash outflows from repayment of borrowings of $767decreased by $844 million from $967 during the year ended 31 December 2018 to $123 million during the year ended 31 December 20172019. This decrease included the repayment of $170 million of the US$1.0 billion syndicated revolving credit facility, $428$122 million of the local borrowing facilities in South Africa $65 million of the A$500 million syndicated revolving credit facility and $104$1 million relating to other loans.
Other borrowing costs decreased by $34$10 million to nil in 2019 from $10 million in 20172018. The decrease was due to the redemptionabsence of remaining bondsnew transaction costs in 2016.2019.
Dividends paid to non-controlling interests increased by $1 million from $15 million in 20162018 to $19$16 million in 2017 and2019. These dividends were all paid by our non-wholly owned subsidiaries. CVSA and Siguiri to their respective non-AGA related shareholders.
During 2017,2019, the company declared and paid a dividend of $39$27 million to shareholders, whereas in the prior period, no dividend was paidcompared to shareholders.
180
Table of borrowings of $1,333 million during the year ended 31 December 2016 included the repayment of $471 million of the $1.25 billion 8.500 percent bonds due 2020, $480 million of the US$1.0 billion syndicated revolving credit facility, $290 million of the local borrowing facilities, $89 million of the A$500 million syndicated revolving credit facility and $3 million in connection with other loans.Contents
Liquidity
Sources of liquidity
To service the capital commitments and other operational requirements, the company is dependent on existing cash resources, cash generated from operations and borrowing facilities. Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject to foreign investment, exchange control laws and regulations and the quantity of foreign exchange available in offshore countries. In addition, distributions from joint ventures are subject to relevant board approvals.
AngloGold Ashanti’s revenues are derived primarily from the sale of gold produced at its mines. Cash flows from operating activities are therefore the function of gold produced that is sold at a specific price. The market price of gold can fluctuate widely, which impacts the profitability of the company’s operations and the cash flows generated by these operations.
AngloGold Ashanti’s cash and cash equivalents decreasedincreased to $205$1.33 billion at 31 December 2020 compared with $456 million at 31 December 2017 compared with $215 million at 31 December 2016.2019. In accordance with South African Reserve Bank regulations, cash generated by South African operations is held in South African rands and is therefore subject to exchange controls. At 31 December 20172020, 67 percent of the company’s cash and cash equivalents were held in US dollars, 11five percent were heldin Australian dollars, 14 percent in South African rands, 11 percent in Argentinian pesos and 223 percent were held in other currencies.
The credit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent that external borrowings are required, the company’s covenant performance indicates that existing financing facilities will be available to meet the above commitments. To the extent that any of the financing facilities mature in the near future, the company believes that sufficient measures are in place to ensure that these facilities can be refinanced.
During April 2010, the groupAngloGold Ashanti Holdings plc issued two rated bonds, fully and unconditionally guaranteed by AngloGold Ashanti Ltd.Limited. The issuance consisted of a 10 year10-year ($700 million) bond with a semi-annual coupon of 5.375% per annum and awas repaid at maturity on 15 April 2020. The 30-year ($300 million) bond with a semi-annual coupon of 6.50% per annum. Unless the company redeems the bonds earlier, the bondsannum will mature on 15 April 2020 and, 15 April 2040, respectively.
During July 2012, AngloGold Ashanti Holdings plc issued a rated bond, fully and unconditionally guaranteed by AngloGold Ashanti Limited. The 10-year ($750 million) bond with a semi-annual coupon of 5.125% per annum will mature on 1 August 2022, unless the group.company redeems the bond earlier. See also “Item 10C: Material Contracts—Notes—2012 Notes”.
During July 2014,October 2020, AngloGold Ashanti Holdings plc issued a rated bond, fully and unconditionally guaranteed by AngloGold Ashanti Limited. The 10-year ($700 million) bond with a semi-annual coupon of 3.750% per annum will mature on 1 October 2030, unless the group completedcompany redeems the following financing transactions:bond earlier. See also “Item 10C: Material Contracts—Notes—2020 Notes”.
Following the completion of the South African asset sale, the company has cancelled its ZAR RCF facilities. The ZAR RCF 1.4 billion, five-yearthe ZAR RCF 2.5 billion and the ZAR RCF 1.0 billion facilities were cancelled on 19 February, 23 October and 11 November 2020, respectively.
On 23 August 2016, Geita Gold Mining Limited and Société AngloGold Ashanti de Guinée S.A., each as a borrower, entered into two separate three-year unsecured revolving facilities agreements with Nedbank Limited, as lender, of $35 million (which was combined with the Geita RCF in January 2019) and $65 million (Siguiri RCF). In February 2019, Société AngloGold Ashanti de Guinée S.A. renewed the $65 million Siguiri RCF with Nedbank Limited for a further 3 years. The current interest rate charged is LIBOR +8.50%. The Siguiri RCF matures in 3 May 2022 and was fully drawn as of 31 December 2020.
During April 2018, Geita Gold Mining Limited, as borrower, entered into a three-year unsecured multi-currency revolving credit facility of $115 million with Nedbank Limited, as underwriter and agent, and certain financial institutions party thereto, as original banks (Geita RCF). The agreement was amended and restated in January 2019 to add $35 million. Facility A is a syndicateUS dollar based facility with interest charged at a margin of lenders. Amounts may be repaid6.7% above LIBOR and reborrowedfacility B is a Tanzanian shilling facility capped at the equivalent of $45 million with interest charged at a margin of 5% plus a reference rate as determined by the lending agent. The Geita RCF matures in June 2021. As of 31 December 2020, the equivalent of $41 million was undrawn under the $150 million Geita RCF.
During October 2018, AngloGold Ashanti Holdings plc and AngloGold Ashanti Australia Limited, as borrowers, entered into a five-year unsecured multi-currency syndicated revolving credit facility during its five-year termof $1.4 billion ($1.4 billion multi-currency RCF) with the Bank of Nova Scotia, as facility agent, and thecertain financial institutions party thereto, as lenders. The loan consists of a US dollar based facility bearswith interest charged at a margin of 1.45% above LIBOR plus 1.5%.and an Australian dollar based facility capped at A$500 million with interest charged at a margin of 1.45% above BBSY. The facility matures in July 2019. Theapplicable margin is subject to a ratings grid. In this regard, the interest margin will reduce should the group’s credit rating improve from its current BB+/Baa3 status and should increase shouldif its credit rating worsen.
181
In addition, AngloGold Ashanti Limited, as borrower, on an annual basis renews its corporate overnight facility of $100 million. Interest is currently charged at a marginZAR 500 million (ZAR 500 million RMB corporate overnight facility). As of between 6.2% and 8% above LIBOR. The facilities mature in August 2019.
A full analysis of the borrowings as presented on 12 December 2017.the statement of financial position is included in “Item 18: Financial Statements—Note 26—Borrowings”.
Amounts are converted to US dollars at exchange rates as of 31 December 2017.2020.
Pursuant to environmental regulations in the countries with in which the company operates, in connection with planning for end-of-life of our mines, AngloGold Ashanti is obligated to rehabilitate the lands where such mines are located. In most cases, AngloGold Ashanti is required to provide financial guarantees for such work, including reclamation bonds or letters of credit issued by third party entities, independent trust funds or cash reserves maintained by the operation, to cover the estimated environmental rehabilitation obligations. In most cases, the environmental obligations will expire on completion of the rehabilitation although, in some cases, AngloGold Ashanti may be required to post bonds for potential events or conditions that could arise after the rehabilitation has been completed.
AngloGold Ashanti intends to finance its capital expenditure, capital lease obligations, other purchase obligations, environmental rehabilitation expenditures and debt repayment requirements in 20182021 from cash on hand, cash flow from operations, existing credit facilities and, potentially, if deemed appropriate, long-term debt financing, the issuance of equity and equity linkedequity-linked instruments. As part of the management of liquidity, funding and interest rate risk the group regularly evaluates market conditions and may enter into transactions, from time to time, to repurchase outstanding debt, pursuant to open market purchases, tender offers or other means.
Current borrowings
AngloGold Ashanti’s current borrowings increaseddecreased by $592 million to $38$142 million at 31 December 20172020 from $34$734 million at 31 December 2016.2019. The decrease in current borrowings is largely due to the settlement of the 5.375% notes which matured on 15 April 2020. See “Item 18: Financial Statements—Note 25-Borrowings”26—Borrowings”.
Non-current borrowings
AngloGold Ashanti’s non-current borrowings increased by $490 million to $2,230$1,789 million at 31 December 20172020 compared to $2,144$1,299 million at 31 December 2016.2019. See “Item 18: Financial Statements—Note 25-Borrowings”26—Borrowings”.
As at 31 December 2017,2020, AngloGold Ashanti’s total non-current borrowings, including the short-term portion maturing within 2018,2020, was made up as follows:
| $ (million) | ||||||
| Unsecured borrowings | ||||||
| Total borrowings | ||||||
| Less: Short-term maturities | ||||||
| Total non-current borrowings | ||||||
Amounts falling due are scheduled as follows:
| $ (million) | ||||||
| Within one year | ||||||
| Between one and two years | ||||||
| Between two and five years | ||||||
| After five years | ||||||
| Total | ||||||
182
At 31 December 20172020, the currencies in which the borrowings were denominated were as follows:
| $ (million) | ||||||
| United States dollars | ||||||
| Australian dollars | ||||||
| South African rand | ||||||
| Total | 1,931 | |||||
At 31 December 2017,2020, AngloGold Ashanti had the following undrawn amounts available under its borrowing facilities:
| $ (million) | ||||||
| 34 | ||||||
| Multi-currency syndicated revolving credit facility ($ | ||||||
| Total undrawn facilities | ||||||
AngloGold Ashanti had no other committed lines of credit as of 31 December 2017.2020.
As of 31 December 2017,2020, the company was in compliance with all debt covenants and provisions related to potential defaults.
See “Item 18: Financial Statements—Note 35-Capital36—Capital Management” and “Item 10C: Material Contracts”.
At 31 December 2020, lease liabilities were as follows:
| $ (million) | |||||
| Non-current | 116 | ||||
| Current | 37 | ||||
| Total | 153 | ||||
AngloGold Ashanti, through its executive committee, reviews its short-, medium- and long-term funding, treasury and liquidity requirements and positions monthly. The Audit and Risk Committee also reviews these on a quarterly basis at its meetings.
Contractual commitments and contingencies
For a detailed discussion of commitments and contingencies, see note 33 to the consolidated financial statements “Contractual commitments“Item 18: Financial Statements—Note 34—Contractual Commitments and contingencies”Contingencies”.
As at 31 December 2017,2020, capital commitments can be summarised over the periods shown below as follows:
| Expiration per period | |||||||||||||||||||||||||||||
| Commitment | Total amount | Less than 1 year | 1 – 3 years | 4 – 5 years | Over 5 years | ||||||||||||||||||||||||
| (in millions) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Capital expenditure (contracted and not yet contracted)(1) | 487 | 416 | 71 | — | — | ||||||||||||||||||||||||
Other commercial commitments(2) | 1,273 | 391 | 588 | 242 | 52 | ||||||||||||||||||||||||
| Total | 1,760 | 807 | 659 | 242 | 52 | ||||||||||||||||||||||||
(1) Including commitments through contractual arrangements with equity accounted joint ventures of $12 million.
(2) Excludes commitments through contractual arrangements with equity accounted joint ventures.
To service the above capital commitments and other operational requirements, the group is dependent on existing cash resources, cash generated from operations and borrowing facilities.
183
| Expiration per period | ||||||||||||||
| Commitment | Total amount | Less than 1 year | 1 – 3 years | 4 – 5 years | Over 5 years | |||||||||
| (in millions) | $ | $ | $ | $ | $ | |||||||||
Capital expenditure (contracted and not yet contracted)(1) | 200 | 188 | 12 | — | — | |||||||||
Other commercial commitments(2) | 698 | 274 | 232 | 81 | 111 | |||||||||
| Total | 898 | 462 | 244 | 81 | 111 | |||||||||
Recent developments
Recent developments disclosed in “Item 18: Financial Statements—Note 36-Recent developments”37—Subsequent Events” include the following details:
Dividend declaration:On 2022 February 2018,2021, the directors of AngloGold Ashanti declared a gross cash dividend per ordinary share of 70705 South African cents (assuming an exchange rate of ZAR11.66/ZAR14.70/$, the gross dividend payable per ADS is equivalent to 648 US cents).
As of 19 March 2021, all of AngloGold Ashanti’s mines are operating normally, subject to enhanced COVID-19 safety protocols and various travel restrictions, except Cerro Vanguardia which is currently running at between 60% to 80% operating capacity due to continuing inter-provincial travel restrictions in Argentina which prevents certain employees from getting to the conditions precedent were fulfilledsite.
As of 19 March 2021, new waves of the outbreak are being experienced in several of our operating jurisdictions, coinciding with the spread of new, more contagious variants of the virus. As with the first waves, the increase in cases has triggered and may in the future trigger government-imposed movement restrictions, including mandatory isolation and quarantine measures. We continue to observe strict health protocols and to exercise vigilance in relation to business continuity, including our supply chain. We remain mindful that the COVID-19 pandemic, its impacts on the sale of Moab Khotsongcommunities and Kopanang mineseconomies, and the transactions were completed with ownership of the Moab Khotsongactions authorities may take in response to it, are subject to change in response to current and Kopanang mines transferring to Harmony and Heaven-Sent, respectively.future conditions.
Related party transactions
For a detailed discussion of related party transactions, see “Item 7B.:7B: Related Party Transactions”.
Recently adopted accounting policies and pending adoption of new accounting standards
AngloGold Ashanti’s accounting policies are described in note 1 to the consolidated financial statements “Accounting policies”“Item 18: Financial Statements—Note 1—Accounting Policies”.
Critical accounting policies
AngloGold Ashanti’s accounting policies are described in note 1 to the consolidated financial statements “Accounting policies”“Item 18: Financial Statements—Note 1—Accounting Policies”.
The preparation of the company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The following are considered to be the accounting policies that are most critical to the company’s results of operations, financial condition and cash flows.
Use of estimates and making of assumptions
The more significant areas requiring the use of management estimates and assumptions relate to Ore Reserve that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation, rehabilitation and closure obligations; asset impairments/reversals (including impairments of goodwill); production start date; and write-downs of inventory to net realisable value. Other estimates include employee benefit liabilities and unrecognizedunrecognised tax positions.
On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ significantly due to the ultimate conclusion of uncertainties.
Ore Reserve and life-of-mines
AngloGold Ashanti estimates on an annual basis its Ore Reserve at its mining operations. There are a number of uncertainties inherent in estimating quantities of Ore Reserve, including many factors beyond the company’s control. Estimates of Ore Reserve are based upon engineering evaluations of assay values derived from samplings of drill holes and other openings. Additionally, declines in the market price of gold may render certain Ore Reserve containing relatively lower grades of mineralisation uneconomic to mine. Further, availability of permits, changes in operating and capital costs, and other factors could materially and adversely affect the Ore Reserve. The company uses its estimates of Ore Reserve to determine the unit basis for mine depreciation and
closure rates, and to evaluate mine asset impairments. Changes in estimates of Ore Reserve could significantly affect these items. At least annually, the company reviews mining schedules, production levels and asset lives in the company’s life-of-mine planning for all of the company’s operating and development properties. Significant changes in the life-of-mine plans may occur as a result of mining experience, new ore discoveries, changes in mining methods and rates, process changes, investment in new equipment and technology and gold prices. Based on the life-of-mine analysis the company reviews its accounting estimates and adjusts depreciation, amortisation, reclamation costs and evaluation of each mine for
184
impairment where necessary. Accordingly, this analysis and the estimates made therein have a significant impact on the company’s results of operations and financial condition.
Contingencies
Accounting for contingencies requires the recording of an estimated loss for a loss contingency when information available indicates that it is probable that an asset has been impaired or a liability has been incurred, and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal and income tax matters requires the use of judgements to determine the amount to be recorded in the financial statements. By their nature, contingencies will only be resolved when one or more future events occur or fail to occur, and typically, those events will occur a number of years into the future. The company assesses such contingent liabilities, which inherently involves the exercise of significant management judgement and estimates of the outcome of future events.
Production start date
AngloGold Ashanti assesses the stage of each mine construction project to determine when a project moves into the production stage. The criteria used to assess the start date are determined by the unique nature of each mine construction project and include factors such as the complexity of a plant and its location. When the construction project is substantially complete and ready for its intended use it moves into the production stage and capitalisation of certain mine construction costs cease. Further costs incurred on the project are recognised as inventory or expensed, except for capitalisable costs related to mining asset additions or improvements, underground mine development, deferred stripping activities, or Ore Reserve development.
Phase 1 of the Obuasi mine re-development project moved into the production stage on 1 October 2020 when it was determined that the Phase 1 assets were capable of operating in the manner intended by management. The criteria used in the assessment of Obuasi start date included, the following:
•level of capital expenditure compared to the construction cost estimates;
•completion of a reasonable period of testing of the constructed asset;
•the ability to consistently produce saleable product in the processing plant;
•consistent ore mining rate per day over a period of time, underground development metre rate;
•adequacy of stope face;
•level of milling rate at a sustainable recovery and grade;
•ability to produce metals in saleable form (within specifications); and
•ability to sustain ongoing production of metal.
Recoverable tax, rebates, levies and duties
In a number of countries, particularly in the Africa region and Argentina, AngloGold Ashanti is due refunds of indirect tax which remain outstanding for periods longer than those provided for in the respective statutes. Management assesses recovery of the receivables based on probability weighted cashflows the timing of the recoveries.
Provision for environmental rehabilitation
AngloGold Ashanti’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment.environment including in respect of obligations to reclaim or rehabilitate lands once mining operations cease. The company recognises management’s best estimate for asset retirement obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision. Changes in Ore Reserve could similarly affect the useful lives of assets depreciated on a straight-line-basis, where those lives are limited to the life of mine.
5C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Research and development expenditure included in the income statement amounted to $11 million, $15 million and $18$1 million during 2017, 20162020, nil during 2019 and 2015, respectively.$1 million during 2018.
5D. TREND INFORMATION
For a discussion of trends affecting AngloGold Ashanti’s business and operations, see “Item 5A.:5A: Operating Results – Results—Key factors affecting results”.
185
5E. OFF-BALANCE SHEET ARRANGEMENTS
AngloGold Ashanti does not engage in off-balance sheet financing activities, and does not have any off-balance sheet debt obligations, special purpose entities or unconsolidated associates. The most significant off-balance sheet item is the unaccrued future rehabilitation obligations.
See Item“Item 5F: Tabular disclosureDisclosure of contractual obligations.Contractual Obligations”.
186
5F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
As at 31 December 20172020 AngloGold Ashanti had the following known contractual obligations:
| Total | Less than 1 year | 1 – 3 years | 4 – 5 years | More than 5 years | ||||||||||
| (in millions) | $ | $ | $ | $ | $ | |||||||||
Long-term debt obligations including interest(1) | 3,090 | 138 | 1,367 | 890 | 695 | |||||||||
| Capital lease obligations | 119 | 14 | 27 | 24 | 54 | |||||||||
| Operating lease obligations | 90 | 45 | 38 | 7 | — | |||||||||
| Purchase obligations | ||||||||||||||
- Contracted capital expenditure(2) | 87 | 87 | — | — | — | |||||||||
- Other purchase obligations(3) | 698 | 274 | 232 | 81 | 111 | |||||||||
Environmental rehabilitation costs(4) | 991 | 74 | 95 | 67 | 755 | |||||||||
Pensions and other post-retirement medical obligations(5) | 123 | 11 | 22 | 24 | 66 | |||||||||
| Total | 5,198 | 643 | 1,781 | 1,093 | 1,681 | |||||||||
| Total | Less than 1 year | 1 – 3 years | 4 – 5 years | More than 5 years | |||||||||||||||||||||||||
| (in millions) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Long-term debt obligations including interest(1) | 2,658 | 205 | 947 | 92 | 1,414 | ||||||||||||||||||||||||
| Capital lease obligations | 160 | 42 | 60 | 39 | 19 | ||||||||||||||||||||||||
| Purchase obligations | |||||||||||||||||||||||||||||
- Contracted capital expenditure(2) | 120 | 120 | |||||||||||||||||||||||||||
- Other purchase obligations(3) | 1,273 | 391 | 588 | 242 | 52 | ||||||||||||||||||||||||
Environmental rehabilitation costs(4) | 643 | 51 | 82 | 73 | 437 | ||||||||||||||||||||||||
Pensions and other post-retirement medical obligations(5) | 83 | 9 | 19 | 18 | 37 | ||||||||||||||||||||||||
| Total | 4,937 | 818 | 1,696 | 464 | 1,959 | ||||||||||||||||||||||||
(1) Interest calculations are at the rate existing at the year end. Actual rates are set at floating rates for some of the borrowings (Refer to “Item 18: Financial Statements—Note 26—Borrowings”).
(2) Represents contracted capital expenditure for which contractual obligations exist. Amounts stated include commitments of equity accounted joint ventures.
(3) Other purchase obligations represent contractual obligations for mining contract services, purchase of power, supplies, consumables, inventories, explosives and activated carbon.
(4) Pursuant to environmental requirements, AngloGold Ashanti is obligated to close its operations and reclaim and rehabilitate the lands upon which it conducted its mining and gold recovery operations. The present value of estimated closure costs at existing operating mines as well as mines in various stages of closure are reflected in this table. Costs are calculated using undiscounted real cash flows, not nominal cash flows. The amount will change from year to year depending on rehabilitation work undertaken, changes in design and methodology, and new occurrences. For more information on AngloGold Ashanti’s environmental rehabilitation obligations, see "Item 4B: Business Overview-Mine Site Rehabilitation and Closure" and "Item 4B: Business Overview-Environmental, Health and Safety Matters”. Amounts stated include a total estimated liability of $24 million in respect of equity accounted joint ventures.
(5) Represents payments for unfunded plans or plans with insufficient funding.
187
ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
188
6A. DIRECTORS AND SENIOR MANAGEMENT
Directors
As at 2919 March 2018,2021, AngloGold Ashanti has a unitary board comprising 119 directors - nine8 independent non-executive directors and twoone executive directors.director. Certain information with respect to AngloGold Ashanti’s directors is set forth below:
| Name | Age | Position | Year first appointed(1) | |||
| Srinivasan Venkatakrishnan | 53 | Executive director and chief executive officer | 2005 | |||
| Christine Ramon | 50 | Executive director and chief financial officer | 2014 | |||
Sipho Pityana(2) | 58 | Independent non-executive director and chairman | 2007 | |||
| Nozipho January-Bardill | 67 | Independent non-executive director | 2011 | |||
| Albert Garner | 62 | Independent non-executive director | 2015 | |||
| Rhidwaan Gasant | 58 | Independent non-executive director | 2010 | |||
| Dave Hodgson | 70 | Independent non-executive director | 2014 | |||
| Michael J. Kirkwood | 70 | Independent non-executive director | 2012 | |||
| Maria Richter | 63 | Independent non-executive director | 2015 | |||
| Rodney J. Ruston | 67 | Independent non-executive director | 2012 | |||
| Sindiswa Zilwa | 50 | Independent non-executive director | 2017 | |||
| Name | Age | Position | Year first appointed(1) | |||||||||||||||||
| Christine Ramon | 53 | Executive director and interim chief executive officer | 2014 | |||||||||||||||||
Maria Ramos (2) | 62 | Independent non-executive director and chairman | 2019 | |||||||||||||||||
| Kojo Busia | 58 | Independent non-executive director | 2020 | |||||||||||||||||
| Alan Ferguson | 63 | Independent non-executive director | 2018 | |||||||||||||||||
| Albert Garner | 65 | Independent non-executive director | 2015 | |||||||||||||||||
| Rhidwaan Gasant | 61 | Lead independent non-executive director | 2010 | |||||||||||||||||
| Nelisiwe Magubane | 55 | Independent non-executive director | 2020 | |||||||||||||||||
| Maria Richter | 66 | Independent non-executive director | 2015 | |||||||||||||||||
| Jochen Tilk | 57 | Independent non-executive director | 2019 | |||||||||||||||||
(1)Directors serve for a period of three years unless re-elected. At each annual general meeting, directors appointed since the previous annual general meeting are required to retire but are eligible for re-election. In addition, one-third of the directors (if their number is not a multiple of three, then the number nearest to but not less than one third), must retire according to seniority or by lot but may be re-elected.
(2)Appointed as Chairman with effect from 5 December 2020.
| Independent | ||||||||
Appointed: | ||||||||
| Board committee memberships: | ||||||||
| Remuneration and Human Resources Committee | ||||||||
Between March 2009 and February 2019, Ms. Ramos served as Chief Executive Officer of Absa Group Afrox, SPESCOM, Scaw Metalsleading the Group through a number of significant milestones including the acquisition of the Barclays Africa subsidiary banks; the sell-down by Barclays PLC and setting a new strategy and refreshed brand for the Old Mutual Leadership Group. He previously workedbank. Before joining Absa (previously Barclays Africa Group Limited) as Group Chief Executive in March 2009, Ms. Ramos served as the Chief Executive of Transnet Limited for five years. This followed an executiveeight-year tenure as director general of Nedcor Investment Bank and managing director of Nedbank. In addition to his private sector track record, Sipho has extensive public sector experience and international exposure. He was the first Director General ofSouth Africa’s National Treasury (formerly the Department of LabourFinance) during which time she played a crucial role in transforming the former President Mandela’s Government. As the Foreign Affairs Director General he represented South Africa in various international fora including the United Nations, African Union, Commonwealth and the International Labour Organization. He wasTreasury into one of the founding membersmost effective and efficient state departments in the post-apartheid administration.
Ms. Ramos has in the past served as a non-executive and independent director on the boards of Sanlam Ltd, Remgro Ltd and SABMiller PLC. She was a member of the governing bodyWorld Economic Forum’s International Business Council and member of its executive Committee for 12 years and its chairman between 2017 and 2019.
She is a member of the Commission for Conciliation, MediationGroup of Thirty and Arbitration and Convenorserves on the International Advisory Board of the South African government delegation toBlavatnik School of Government, Oxford University. She is a member of the National Economic Development and LabourBretton Woods Committee Advisory Council.
189
Appointed: | ||||||||
| Board committee memberships: | Investment Committee Nominations Committee Remuneration and Human Resources Committee | |||||||
Rhidwaan Gasant is the development of a strong pipeline of brownfields investment options. He has prioritised high-return, self-funded project options designed to improve production life and margins with optimal capital investment and payback periods. Venkat has built a strong, stable senior management team focused on consistently meeting challenging operating and financial targets that directly support AngloGold Ashanti’s strategy. In each of the five years of his tenure, all capital, cost and production targets have either been met or improved upon.
Lead Independent Non-Executive Director. He was previously the Chief FinancialExecutive Officer at AngloGold Ashanti, a post he also held at Ashanti Goldfields before its merger with AngloGold in 2004. In these roles he oversaw funding for both companies, gaining detailed knowledge of the portfolio of mines and operating jurisdictions,Energy Africa Limited. He serves as well as commodity and capital markets. During this time he also bore responsibility for eliminating AngloGold Ashanti’s 12Moz of legacy hedge positions. Prior to joining Ashanti Goldfields, Venkat was a director and chairs the Audit and Risk Committees of corporate reorganisation services at Deloitte & Toucheinternational companies in London.
| Independent Non-Executive Director | ||||||||
Appointed: 1 October | ||||||||
| Board committee memberships: | Nominations Committee | |||||||
| Albert Garner | ||||||||
| BSE, Aerospace and Mechanical Sciences | ||||||||
| Independent | ||||||||
Appointed: 1 January 2015 | ||||||||
| Board committee memberships: | Remuneration and Human Resources Committee | |||||||
Albert Garner is an Independent Non-Executive Director. He has extensive experience in capital markets, corporate finance and mergers and acquisitions having worked with Lazard Frères & Co., LLC for 39over 40 years in various leadership positions. He is one of the most senior bankers at Lazard, currently leading their special committee practice and chairing their fairness opinion committee. He formerly led Lazard’s corporate finance practice. AlbertMr. Garner became a general partner in 1989 and is now Vice Chair -Investment Banking. Over the past 10 years he has advised and acted as lead adviser to more than 50 companies and their boards of directors on transformative transactions.
190
| Independent | ||||||||
Appointed: | ||||||||
| Board committee memberships: | ||||||||
| Social, Ethics and Sustainability Committee | ||||||||
Neli Magubane has extensive experience in the energy sector, having started her career in Eskom. After a stint in the private sector as a consulting electrical engineer, she joined the Department of Minerals and Energy as the chief director responsible for the restructuring of the electricity sector, planning and implementation of the electrification programme. She was previouslylater appointed as the Chief Executive OfficerDeputy Director General responsible for the development of the policies that govern electricity, nuclear and clean energy in South Africa.
In 2009, Ms. Magubane was appointed as Director General of Energy, Africa Limited. He servesresponsible for, amongst other things, the development of the integrated resource plan and improved access to electricity for over a million households in four years. She was responsible for the regulatory framework and policies that govern the liquid fuels and gas sectors. She was also responsible for oversight of the State-Owned Companies (SOC) that operate in the energy sector, namely CEF SOC LTD, NECSA SOC LTD, and the Regulatory Authorities that govern the energy sector. She established the Renewable Energy Independent Power Producer Program.
More recently, she has been appointed to the current board of Eskom Holdings SOC Limited as a director and chairsnon-executive director. Ms. Magubane has been named one of the Audit and Risk Committees of international companiestop 50 most influential figures in the MTN Group. His other directorships include thoseSouthern African Power sector by the ESI Africa Magazine. In 2019 she was awarded a Big 5 Energy Award by Africa Oil and Power Conference for outstanding contribution in the Rapid Africanshaping energy policy in Sub Saharan Africa. As an entrepreneur, she has established Matleng Energy Holdings Group,Solutions, a start up oil and gas exploration business focused on Africa, and Edcon Limited.70% women-owned company that provides energy solutions.
| Independent | ||||||||
Appointed: | ||||||||
| Board committee memberships: | ||||||
Audit and Risk Committee | ||||||
Nominations Committee | ||||||
Maria Richter is an experienced FTSE 100 non-executive director who has served on a diverse range of UKUS and International boards. She previously served on the board of Barclays International and Barclays Bank plc (2017-2019) and National Grid plc in the UK from( 2003 to July 2014-2014) where she was the chairperson of the finance committee and member of the audit and nominations committees. She currently sits on the boards of Rexel Group, France, a global leader in the professional distribution of energy products and services, and Bessemer Trust, a US wealth management company, and is a member of the audit and compensation committees of Rexel and the remuneration committee of Bessemer Trust. As of 1 September 2017 she joined the divisional Board of Barclays International which in 2018 will become Barclays’ non ring fenced bank, responsible for oversight of the Corporate and Investment Bank and International Cards and Payments businesses. Maria’s
Ms. Richter's professional career spanned 1980 to 2002 during which time she served in various positions at the former Dewey Ballantine, Prudential, Salomon Brothers Inc. and Morgan Stanley & Co.
| Jochen Tilk (57) | ||||||||||
| Independent | Non-Executive Director | |||||||||
Appointed:1 | ||||||||||
| Board committee memberships: | Investment Committee (Chairman) Social, Ethics and Sustainability Committee Nominations Committee Audit and Risk Committee | |||||||||
191
Jochen Tilk is well regardedan Independent Non-Executive Director. He is the former Executive Chair of Nutrien Inc., a Canadian global supplier of agricultural products and services based in Saskatoon, Saskatchewan. He is the areasformer President and Chief Executive Officer of accounting, auditingPotash Corporation of Saskatchewan. Mr. Tilk, previously spent 25 years with Inmet Mining Corporation, a Canadian-based, international metals company, with five of those years as the company’s president and business management. Shechief executive officer. He is also a director of Emera Inc., a publicly listed energy utility company and the Princess Margaret Cancer Foundation, a not-for-profit organization, which raises funds to support the Princess Margaret Cancer Centre.
| Kojo Busia (58) | ||||||||
| BA, MA, PhD | ||||||||
| Independent Non-Executive Director | ||||||||
Appointed: 1 August 2020 | ||||||||
| Board committee memberships: | Social, Ethics and Sustainability Committee (Chairman) Investment Committee Nominations Committee | |||||||
Dr. Kojo Busia has extensive board and audit committeeover 25 years of professional experience in African natural resources governance and management working at both bilateral and multilateral organisations. He recently held the publicposition of Chief of the Natural Resources Management Section, Technology, Climate Change and private sectors,Natural Resource Management Division, at the United Nations Economic Commission for Africa (UNECA).
He previously served as coordinator of the African Mineral Development Centre (AMDC) at the UNECA, where he was charged with the implementation of the African Mining Vision, an African Union policy framework for sustainable mineral resources development. Prior to heading the AMDC, Dr. Busia spent nearly a decade leading the African Peer Review Mechanism Support Section, Governance and currently sitsPublic Administration Division, also at the UNECA. In addition, Dr. Busia has served on several advisory boards including the Responsible Mining Foundation Advisory Council, Advisory Director of Global Mining Sustainability, and Mining Indaba’s Sustainability Advisory Committee. He is a founding director of the Africa Resource Management, Environment and Climate Change (ARMECC) Institute, a think-do-tank recently established in Accra, Ghana.
| Christine Ramon (53) | ||||||||
| BCompt, BCompt (Hons), CA(SA), Senior Executive Programme (Harvard) | ||||||||
| Interim Chief Executive Officer and Executive Director | ||||||||
Appointed: 1 October 2014 | ||||||||
| Board committee memberships: | Investment Committee | |||||||
Ms. Ramon was appointed Interim Chief Executive Officer of AngloGold Ashanti with effect from 1 September 2020. Prior that she served as AngloGold Ashanti’s Chief Financial Officer and has been an executive director of the company since 1 October 2014. Ms. Ramon has held senior financial management and executive positions in various companies. She previously served as Chief Financial Officer and Executive Director of Sasol from 2006 to 2013. Prior to this, she was CEO of Johnnic Holdings, having previously served as Financial Director. She serves as a director of the World Gold Council and the International Council on Mining and Metals. She previously served on the boards of Discovery Limited, Aspen Limited, Metrofile LimitedMTN Group, International Federation of Accountants, Rand Refinery, Lafarge SA (France), Transnet and Johnnic Communications.
Ms. Ramon is a member of the following unlistedSouth African Institute of Chartered Accountants. She was recently appointed on the Presidential Council for State Owned Enterprises in South Africa. She was nominated as a Young Global Leader of the World Economic Forum in 2007. Christine previously served as the Chairperson of the listed companies Consol Glass Limited, Mercedes BenzCFO Forum in South Africa Limited, Tourvest Group (Pty) Ltd and Gijima Group Limited. Sindi iswas awarded CFO of the Year in 2018. She also previously served as a professional director following her retirement in October 2016 after her 23 year stintmember of the Standing Advisory Committee to the International Accounting Standards Board and as Co-Founder and CEODeputy Chair of Nkonki Inc. As an author, Sindi has published two books, “Audit Committee Effectiveness Model” and “Creating Effective Boards and Committees”. Sindi is a Chartered Accountant (SA) and a Chartered Director (SA).
Board movements during 20172020 and subsequent to year endyear-end
The following changes to the board of directors took place during the period from 1 January 20172020 to 31 December 20172020 and subsequent to year-end:
•On 6 May 2020, Ms. Maria Ramos became chair of the Social, Ethics and Sustainability Committee, following the retirement of Ms. Nozipho January-Bardill from the board. Effective 6 May 2020, Ms. Ramos also stepped down as a member of the Investment Committee and was appointed as a member of the Remuneration and Human Resources Committee. On 6 May
192
2020, Mr. Jochen Tilk became chair of the Investment Committee, following directors retired at the Annual General Meeting on 16 May 2017 and being eligible for re-election were re-elected by the shareholders: Sipho Pityana,retirement of Mr. Rodney Ruston from the board.
•On 10 June 2020, Mr. Jochen Tilk was appointed as a member of the Audit and Maria Richter.Risk Committee.
•On 1 September 2020, Mr. Kelvin Dushnisky stepped down as chief executive officer (CEO). Mr. Dushnisky remained available until 28 February 2021 to assist the group with a smooth handover. Ms. Christine Ramon, previously chief financial officer (CFO), has been appointed Interim CEO, effective 1 September 2020, while the board embarks on a comprehensive recruitment process to find a new permanent CEO to deliver on the Group’s strategy for enhanced value creation. Mr. Ian Kramer, previously Senior Vice President: Group Finance, was appointed Interim CFO for the duration of the transition period, effective 1 September 2020.
•On 13 October 2020, the Nominations Committee was reconstituted to include Mr. Sipho Pityana (chairman of the committee), Mr. Rhidwaan Gasant, Ms. Maria Ramos, Dr. Kojo Busia, Mr. Jochen Tilk and Mr. Alan Ferguson. Ms. Maria Richter and Mr. Albert Garner stepped down as members of the Nominations Committee, effective 13 October 2020.
•On 1 December 2020, the below changes to the membership of certain board committees became effective:
–Ms. Maria Richter stepped down as chairman of the Remuneration and Human Resources Committee, but remained a member of the committee;
–Ms. Maria Ramos was appointed as chairman of the Remuneration and Human Resources Committee. Further, Ms. Ramos stepped down as chair of the Social, Ethics and Sustainability Committee, but remained a member of the committee;
–Dr. Kojo Busia was appointed as chairman of the Social, Ethics and Sustainability Committee;
–Mr. Rhidwaan Gasant stepped down as chairman of the Audit and Risk Committee, but remained a member of the committee; and
–Mr. Alan Ferguson was appointed as chairman of the Audit and Risk Committee.
•On 5 December 2020, independent non-executive director Ms. Maria Ramos was appointed chair of the board of directors of AngloGold Ashanti. Ms. Ramos succeeded Mr. Sipho Pityana who resigned from the board on 16 May 2017.effective 7 December 2020.
•On 14 December 2020, the below changes to the membership of certain board committees became effective:
–Ms. Maria Ramos stepped down as chairman of the Remuneration and Human Resources Committee, but remained a member of the committee. Further, Ms. Ramos was appointed as chairman of the Nominations Committee;
–Ms. Maria Richter was re-appointed as chairman of the Remuneration and Human Resources Committee and was re-appointed as a member of the Nominations Committee;
–Ms. Nelisiwe Magubane stepped down as a member of the Investment Committee and was appointed as a member of the Audit and Risk Committee; and
–Mr. Albert Garner was appointed as a member of the Remuneration and Human Resources Committee.
•On 18 February 2021, Ms. Ramos stepped down as a member of the Remuneration and Human Resources Committee and Mr. Rhidwaan Gasant was appointed as a member of the Remuneration and Human Resource Committee.
In terms of the company’s Memorandum of Incorporation (MoI), one third of the following directors are required to retire at each AGM and if they are eligible and available for re-election, will be put forward for re-election by the Annual General Meetingshareholders. The board has determined that the directors to be held on 16 May 2018: Albert Garner, Nozipho January-Bardill, Rhidwaan Gasant andretire at the next AGM are Mr. Alan Ferguson, Ms. Christine Ramon and Mr. Jochen Tilk. Ms. Ramon and Messrs. Ferguson and Tilk are eligible and have offered themselves for re-election.
EXECUTIVE COMMITTEE
AngloGold Ashanti’s executive management team (Executive Committee)Committee or Executive Management) comprises nineeight members of whom two areone is an executive directors. This committeedirector. The Executive Committee oversees the day-to-day management of the group’s activities and is supported by country and regional management teams as well as by group corporate functions.
In addition to Srinivasan Venkatakrishnan and Christine Ramon, the following people are members of the Executive Committee:
Executive Vice President - Group Human ResourcesCorporate Affairs and Sustainability
193
194
Graham Ehm (61)(64)
BSc Hons, MAusIMM, MAICD
Executive Vice President - Group Planning and Technical
Graham who has multi-commodity experience, has held senior leadership positions in AngloGold Ashanti in Tanzania and Australia. His current portfolio entailsEhm is accountable for business planning and portfolio optimisation, capital investment optimisation, monitoring of projects,major project execution, governance pertaining to studies and exploration,capital management, mineral resources and non-managed joint ventures. In 2014 he was also assigned accountability for the closure and redevelopment of the Obuasi Gold Mine.
Ludwig Eybers (51)(54)
BSc (Min. Eng)(Mining Engineering), Post graduate qualifications with Darden Business School, USA
Chief Operating Officer - International
Ludwig Eybers has over 2730 years international mining experience, heexperience. He joined AngloGold Ashanti in 2011 as Senior Vice President Namibia and Mining Task Force, based in Perth Australia. In 2013, he relocated to AngloGold Ashanti in South Africa to take-up the position of Senior Vice President Continental Africa Region. LudwigHe was subsequently promoted to Chief Operations Officer - InternationalOfficer-International in 2017. He is currently accountableresponsible for overall strategic and operational responsibilities for production at the company’s mining operations across three continentsfor the International Region.
Sicelo Ntuli (42)
BSc Eng. (Electrical), MBA
Chief Operating Officer - Africa
Sicelo Ntuli has over 20 years work experience in the mining industry and eight countries.has held various senior roles in Operations, Engineering, Business Strategy and Investor Relations. In 2011, he was appointed Managing Director of Iduapriem Mine and played a key role in the turnaround of the mine’s operating performance and reduction of costs. Mr. Ntuli was promoted to Senior Vice President Africa Region in 2016 where he led the transition of Geita from open pit to underground operations, amongst other achievements. He was subsequently promoted to role of Chief Operating Officer Africa, including South African operations in 2019. Mr. Ntuli is also a Harvard Business School alumnus.
Tirelo Sibisi (52)
BSSc, Advanced HR Executive Development Programme, Post Graduate Diploma in Business Management and an MBA
Executive Vice President - Group Human Resources
In her role as Executive Vice President - Group Human Resources, Tirelo Sibisi is responsible for Group Human Resources, which entails attracting, retaining and developing a highly engaged, diverse and productive workforce. She has more than 20 years’ experience in the field of human resources both local and Internationally, having been the Group executive for human resources and corporate social investment at PPC Cement.
Ms. Sibisi's experience includes 10 years in the information technology sector at IBM (South Africa and Europe) and 7 years at Telkom, making her a well-rounded human resources generalist with strengths in talent management, succession planning, organisational transformation and diversity management, union negotiations and executive compensation. She served on the Board of the Institute of People Management in SA as a Non-Executive Director and was a member of the Remuneration Committee and the Finance Committee. She currently sits on the board of AngloGold Ashanti in Ghana and serves on the Council of the University of Free State.
Ms. Sibisi has given notice of her resignation effective 1 April 2021 and her contract of employment will terminate on 30 September 2021.
Lizelle Marwick (43)
B.Proc; LLB; LLM (Corporate Law)
Executive Vice President - General Counsel and Compliance
Lizelle Marwick was appointed as Executive Vice President: General Counsel and Compliance on 1 July 2020, after previously serving as Senior Vice President: Deputy General Counsel. She joined the company in 2011 establishing and heading up the legal function for the Africa operations. She is familiar with all aspects of the organisation and well versed on multi-jurisdictional legal work covering a wide range of subjects, with extensive experience in governance, corporate transactions and government negotiations. Prior to joining AngloGold Ashanti, Ms. Marwick practiced law at Bowman Gilfillan in South Africa and Herbert Smith
195
in the United Kingdom. She is admitted as an attorney in South Africa and a solicitor in England and Wales and holds a B.Proc, LLB and a Master of Laws in corporate law.
Ian Kramer (50)
B.Com (Acc); B.Com (Hons) Acc; CA(SA)
Interim Chief Financial Officer
Ian Kramer became Interim Chief Financial Officer effective 1 September 2020. Mr. Kramer joined AngloGold Ashanti on 1 November 2012 as a Vice President: Finance, mainly responsible for all JSE and NYSE external reporting responsibilities of AngloGold Ashanti. He was promoted to Senior Vice President: Group Finance on 1 March 2019 taking responsibility for all financial and management reporting aspects of the group.
Prior to joining AngloGold Ashanti, Mr. Kramer spent 20 years at KPMG, 11 thereof as an external audit partner as part of KPMG’s Energy and Natural Resources Business Unit, mainly focusing on the mining industry. As partner, he was seconded to KPMG Toronto, Canada in an advisory partner capacity. During the latter part of his career at KPMG, he was appointed as the KPMG Head of Mining for Africa. Mr. Kramer is a director and a member of the Audit and Risk Committee of Rand Refinery (Pty) Limited and an executive director of AGRe Insurance Company Limited, a wholly-owned subsidiary of the Company.
Executive Committee movements during 2020 and subsequent to year-end
The following changes to the Executive Committee took place during the period from 1 January 2020 to 31 December 2020 and subsequent to year-end:
•Ms. Maria Sanz Perez, EVP: General Counsel and Compliance and company secretary resigned, effective 30 June
2020.
•Ms. Lizelle Marwick appointed as EVP: General Counsel and Compliance, effective 1 July 2020.
•Mr. Ian Kramer, formerly SVP: Group Finance, appointed as Interim CFO, effective 1 September 2020.
•Ms. Tirelo Sibisi has given notice of her resignation, effective 1 April 2021, and her contract of employment will
terminate on 30 September 2021.
COMPETENT PERSONS
As part of its suite of annual reports, AngloGold Ashanti produces a Mineral Resource and Ore Reserve Statement and all the information in this report that relates to Exploration Results, Mineral Resource and Ore Reserve is based on information compiled by the Competent Persons.
During the past decade, the company has developed and implemented a system of internal and external reviews aimed at providing assurance in respect of Ore Reserve and Mineral Resource estimates. A documented chain of responsibility exists from the Competent Persons at the operations to the Company’s Mineral Resource and Ore Reserve Steering Committee. Accordingly, the Chairman of the AngloGold Ashanti Mineral Resource and Ore Reserve Steering Committee, Mr VAMr. Vaughan Chamberlain, assumes responsibility for the Mineral Resource and Ore Reserve processes for AngloGold Ashanti and is satisfied that the Competent Persons have fulfilled their responsibilities.
MSc (Mining Engineering), BSc (Hons) (Geology), FAusIMM
Vaughan Chamberlain holds a Bachelor of Science (Honours)BSc (Hons) degree in Geology from the University of Natal and a Master’s degreeMSc in Mining Engineering from the University of the Witwatersrand. He started his career with Anglo American Corporation in 1987 as a geologist at Western Deep Levels East Mine (now TauTona mine). He joined AngloGold in 1998 and currently holds the position of Senior Vice President: Strategic Technical Group and is Chairman of the AngloGold Ashanti Mineral Resource and Ore Reserve Steering Committee.
196
6B. COMPENSATION
REMUNERATION AND HUMAN RESOURCES COMMITTEE
Remuneration and Human Resources Committee (Remco)
The Remco comprisesis composed of fivefour non-executive directors and itsdirectors. Its purpose is to discharge the responsibilities of the board relating to all compensation, including all salary and equity compensation of the company’s executives. The committeeRemco establishes and administers the company’s executive remuneration and its broad objectives include; aligning executive remuneration with company performance and shareholder interests; setting remuneration standards aimed at attracting, motivating and retaining a competent executive team; linking individual executive pay with operational and company performance aligned to strategic objectives; and evaluating the compensation of executives including approval of salary, equity and incentive based awards.
With respect to its mandate on human resources, the committee has oversight to all strategic aspects of people development and human resource issues. The committee also considers and makes recommendations to shareholders on non-executive director’s fees.
The performance of the executive team, including the executive directors, is considered relative to the prevailing business climate and market conditions, as well as to annual evaluations of the achievement of key performance objectives. Bonuses paid to the executives are a reflection of performance of each of the executives and the company as a whole.
Members
Sipho Pityana (resigned effective 7 December 2020)
Nozipho January-Bardill (retired effective 6 May 2020)
Alan Ferguson
Albert Garner (appointed effective 15 December 2020)
The meetings of the committee are attended by the Chief Executive Officer, Chief Financial Officer and Executive Vice President: Group Human Resources, except when they are conflicted or have a personal financial interest, such as when their own remuneration or benefits are being discussed.
Remuneration policy
Linking pay and performance for our executives is important and by having a large portion of executive pay defined as at riskat-risk pay, the policy ensures that executive compensation is aligned with the overall performance of the company, the regions in which it operates and theits business units. The executives have an overriding focus on social sustainability including safety, and a large percentage of variable pay is directly linked to keeping our employees safe.
Total reward
When determining remuneration AngloGold Ashanti considers all elements of short-short-term and long-termlong-term; fixed and variable pay and ensures that it is consistent with the overall strategic direction of the company and each employee’s individual performance.
For a description of share-based compensation and awards (including cash awards) see “Item 6E: Share Ownership”.
Benchmarking
Our executivesexecutive employees and non-executives are benchmarkednon-executive director’s remuneration is evaluated against a global group of competitors.comparator companies. AngloGold Ashanti’s size and complexity as well as each individual executive’s role areis reviewed against the benchmarkour peer group from a base pay, benefits,and benchmarked based on guaranteed pay and variable pay perspective (which takes into consideration individual performance).pay. Performance (Company and individual) is a key factor influencing the remuneration of the executive employees.
Our salary benchmarks are targeted at the market median of a global market; wheremarket in our industry. Where there is a shortage of specialist and/or key technical skillstechnically skilled employees, we offer a salary that may be higher than the benchmark median is paid.salary.
197
Each executive’s role is individually sized to ensure the best match possible. The comparison is done onfor the same or similar roles irrespective of placelocation of work (including a review of purchasing power parity between countries). Each component of remuneration (base salary, short-term incentives, long-term incentives Co-investment plan and employee benefits and allowances) is analysed and compared with the benchmarksour global peer group’s market range and the overall package is reviewed accordingly., Our new incentive scheme, the Deferred Share Plan (DSP), was implemented in January 2018. For a description of the DSP, see “Item 6E: Share Ownership—AngloGold Ashanti share incentive scheme—Deferred Share Plan (DSP)”.
Retirement benefits/pension
Retirement benefits are granted to all executives. All new executives and employees, receive retirement benefits under defined contribution plans. There are no longer any executives in the legacy defined benefit plans. Contributions vary based on the employee’s retirement plan. See “Item 18: Financial Statements—Note 10—Employee Benefits” and “Item 18: Financial Statements—Note 28—Provision for Pension and Post-Retirement Benefits”.
EXECUTIVE DIRECTORS' AND EXECUTIVE MANAGEMENT REMUNERATION
See "Item18: "Item 18: Financial Statements—Note 32 - 33—Related Parties - Parties—Directors and other key management personnel - personnel—Executive Directors’ and Prescribed Officers renumeration"Officers’ remuneration".
NON-EXECUTIVE DIRECTORS' COMPENSATION
FEES
The fees of non-executive directors areis fixed by shareholders at the annual general meeting and, other thanmeeting. In addition to their compensation, the non-executive directors receive fees they receive for their participation on board committees and allowances for travelling internationally to attend board meetings, non-executivemeetings. Non-executive directors do not receive no further payments from the company and are precluded from participation in the company’s share incentive scheme.
NON-EXECUTIVE DIRECTORS’ REMUNERATION
See "Item18: "Item 18: Financial Statements—Note 32 - 33—Related Parties - Parties—Directors and other key management personnel - personnel—Non-Executive Director renumeration"remuneration".
198
6C. BOARD PRACTICES
The Board of Directors
The company is governed by a unitary board of directors, the composition of which promotes the balance of authority and precludes any one director from dominating decision-making. Our board membership at year-end comprised elevennine directors, nineeight independent non-executive directors and twoone executive directors.director.
The board is supported by its committees and has delegated certain functions to these committees without abdicating any of its own responsibilities. This process of formal delegation involves approved and documented terms of reference, which are reviewed annually.
Appointment and rotation of directors
Several factors including the requirements of relevant legislation, best practice recommendations, qualifications and skills of a prospective board member and the requirements of the Director’s Fit and Proper Standards of the company, as well as regional demographics are considered in appointing board members. New directors are appointed pursuant to the recommendations of the Nominations Committee, which conducts a rigorous assessment of the credentials of each candidate. Newly appointed directors are elected at the next annual general meeting following their appointment and to stand for approval by shareholders.
At the next AGM Dr. Kojo Busia will be named for election by shareholders as a director of AngloGold Ashanti.
In terms of the company’s Memorandum of Incorporation (MOI)(MoI), one third of the directors are required to retire at each Annual General Meeting (AGM) and if they are eligible and available for re-election, will be put forward for re-election by the shareholders. The board has determined that the directors to stand for re-electionretire at the next AGM on 16 May 2018 are Albert Garner, Nozipho January-Bardill, Rhidwaan GasantAlan Ferguson, Christine Ramon and Christine Ramon.Jochen Tilk. Ms Ramon and Messrs Ferguson and Tilk are eligible and have offered themselves for re-election.
The company’s Memorandum of IncorporationMoI does not set a mandatory retirement age for non-executive directors. However, in accordance with recommendations of King IV - any independent non-executive director serving more than nine years should be subjected to a rigorous review of his or her independence and performance by the board.
Service contracts
Non-Executive Directors
Non-executive directors receive fees for their services as directors which are approved by shareholders at annual general meetings. Non-executive directors do not participate in the company’s share incentive scheme.
Non-executive directors do not hold service contracts with the company.
Executive Committee
All members of the Executive Management team have permanent employment contracts which entitle them to standard group benefits as defined by their specific region and participation in the company’s BonusDeferred Share Plan (DSP). Interim appointments (including interim CEO and interim CFO) include an allowance aligned to the Long-Term Incentive Plan. All recently updated executive contracts include details on participation inCompany’s acting allowance policy to recognise the Co-Investment Plan.additional responsibilities associated with these roles.
South African-based executives are paid a portion of their remuneration offshore, which is detailed under a separate contract. This reflects global roles and responsibilities and takes account of offshore business requirements.
The executive contracts are reviewed annually and include a change of control provision. The change of control is subject to the following triggers:
•The acquisition of all or part of AngloGold Ashanti; or
•A number of shareholders holding less than thirty-five percent of the company’s issued share capital consorting to gain a majority of the board and make management decisions; and
•The contracts of Executive Committee members are either terminated or their role and employment conditions are curtailed.
In the event of a change of control becoming effective, the executive will in certain circumstances be subject to both the notice period and the change of control contract terms. The notice periodand change of control periods applied per category of executive and the change of control periods(excluding interim appointments) as at 31 December 20172020 were as follows:
199
| Executive committee member | Notice period | Change of control | ||||||
| Chief Executive Officer | 12 months | 12 months | ||||||
| Chief Financial Officer | 6 months | 6 months | ||||||
| Other Executive Management team members | 6 months | 6 months | ||||||
As at 19 March 2021:
KC Ramon, the Interim CEO remains on a 6 months notice period and a 6 months change of control period.
Ian Kramer, the Interim CFO remains on a 3 months notice period and a 3 months change of control period.
Key activities of the board and committees during 20172020
The activities of the board and committees during 20172020 were aimed at promoting the economic stability of the business. This entailed ensuring that its operations were conducted with due regard to the expectations and needs of stakeholders, the safety and health of employees and communities, and the development of systems to ensure proper access to and dissemination of credible information.
Board and committee meeting attendance
Directors’ attendance at board and committee meetings during 2020 was as follows:
Board (12) | Audit and Risk | Investment | Remuneration and Human Resources | Social, Ethics and Sustainability | Nominations | NED Search (13) | Special Committee A (13) | Special Committee B (13) | |||||||||||||||||||||
| Number of meetings in 2020 | 11 | 5 | 4 | 5 | 5 | 4 | 1 | 4 | 3 | ||||||||||||||||||||
SM Pityana (1) | 11 | n/a | n/a | 5 | 5 | 3 | 1 | 4 | 2 | ||||||||||||||||||||
KOF Busia (2) | 5 | n/a | 2 | n/a | 2 | 3 | n/a | n/a | n/a | ||||||||||||||||||||
KPM Dushnisky (3) | 7 | n/a | n/a | n/a | n/a | n/a | n/a | 4 | n/a | ||||||||||||||||||||
AM Ferguson (4) | 11 | 5 | n/a | 5 | n/a | 3 | n/a | 4 | n/a | ||||||||||||||||||||
AH Garner (5) | 11 | n/a | 4 | n/a | n/a | 1 | n/a | 4 | n/a | ||||||||||||||||||||
| R Gasant | 11 | 5 | 4 | n/a | n/a | 3 | 1 | n/a | 3 | ||||||||||||||||||||
NP January-Bardill (6) | 4 | n/a | n/a | 1 | 2 | n/a | 1 | n/a | n/a | ||||||||||||||||||||
NVB Magubane (7) | 11 | n/a | 4 | n/a | 5 | n/a | n/a | n/a | n/a | ||||||||||||||||||||
| KC Ramon | 11 | n/a | 4 | n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||||||||||||
MDC Ramos (8) | 11 | n/a | 1 | 4 | 5 | 3 | 1 | 4 | 3 | ||||||||||||||||||||
MC Richter (9) | 11 | 5 | n/a | 5 | n/a | 1 | n/a | n/a | n/a | ||||||||||||||||||||
RJ Ruston (10) | 4 | 2 | 1 | n/a | n/a | n/a | n/a | n/a | n/a | ||||||||||||||||||||
JE Tilk (11) | 11 | 2 | 4 | n/a | 5 | 3 | n/a | n/a | 3 | ||||||||||||||||||||
(1) SM Pityana resigned from the board with effect from 7 December 2020.
(2) KOF Busia was appointed to the board, Social, Ethics and Sustainability Committee and the Investment Committee with effect from 1 August
2020. Dr. Busia was appointed to the Nominations Committee with effect from 13 October 2020.
(3) KPM Dushnisky resigned as CEO with effect from 1 September 2020.
(4) AM Ferguson was appointed to the Nominations Committee with effect from 13 October 2020.
(5) AH Garner stepped down from the Nominations Committee with effect from 13 October 2020 and was appointed to the Remuneration and
Human Resources Committee with effect from 15 December 2020.
(6) NP January-Bardill retired from the board on 6 May 2020.
(7) NVB Magubane stepped down from the Investment Committee and was appointed to the Audit and Risk Committee with effect from
14 December 2020.
(8) MDC Ramos stepped down from the Investment Committee and was appointed to the Remuneration and Human Resources Committee with
effect from 6 May 2020. Ms. Ramos was appointed to the Nominations Committee with effect from 13 October 2020.
(9) MC Richter stepped down from the Nominations Committee with effect from 13 October 2020.
(10) RJ Rustonretired from the board on 6 May 2020.
(11) JE Tilk was appointed to the Nominations Committee with effect from 13 October 2020.
(12) During 2020 the board held 6 scheduled board meetings and 5 special board meetings.
(13) Three special purpose committees were established by the board during 2020 being the NED Search Committee and Special Board
Committees A and B. The compositionSpecial Board Committees were constituted to provide oversight for various aspects of the boardcompany’s strategy,
including the optimal corporate attributes for the company following the disposal of the South African assets. Special Committee A was wound-
up on 28 May 2020 and committees at the dateSpecial Committee B was constituted on 5 July 2020.
200
| Board | Audit and Risk | Investment | Remuneration and Human Resources | Social, Ethics and Sustainability | Nomination | ||||||||||||
| No of Meetings in 2017 | 7 | 5 | 4 | 4 | 5 | 2 | |||||||||||
| SM Pityana | 7 | n/a | n/a | 4 | 5 | 2 | |||||||||||
LW Nkuhlu(1) | 2 | 3 | 1 | 2 | n/a | 1 | |||||||||||
| R Gasant | 7 | 5 | 4 | n/a | n/a | n/a | |||||||||||
| DL Hodgson | 7 | n/a | 4 | n/a | 5 | n/a | |||||||||||
| NP January-Bardill | 7 | n/a | n/a | 4 | 5 | n/a | |||||||||||
| MJ Kirkwood | 7 | 5 | n/a | 4 | n/a | 2 | |||||||||||
| AH Garner | 7 | 5 | 4 | n/a | n/a | n/a | |||||||||||
| RJ Ruston | 7 | 5 | 4 | n/a | n/a | n/a | |||||||||||
MDC Richter(2) | 7 | 5 | n/a | 4 | n/a | 1 | |||||||||||
SV Zilwa(3) | 5 | 2 | 3 | 3 | n/a | n/a | |||||||||||
| S Venkatakrishnan | 7 | n/a | n/a | n/a | 5 | n/a | |||||||||||
| KC Ramon | 7 | n/a | 4 | n/a | n/a | n/a | |||||||||||
Audit and Risk Committee
The Audit and Risk Committee comprises sixfour independent Non-Executive Directorsnon-executive directors who collectively possess the skills and knowledge to oversee and assess the strategies and processes developed and implemented by management to manage the business within a continually evolving mining environment.
The Audit and Risk Committee’s duties as required by section 94(2) of the South African Companies Act, King IV and JSE Listing requirementsRequirements are set out in its board-approved terms of reference which is reviewed and updated annually. These duties were discharged as follows:
•reviewed the quarterly market updates and the half year results;
•confirmed the integrity of the group’s Integrated Report, Annual Financial Statements and the Form 20-F;
•reviewed the expertise, experience and performance of the finance function and (Interim) Chief Financial Officer;
•assessed the scope and effectiveness of the systems to identify, manage and monitor financial and non-financial risks;
•reviewed the procedures for detecting, monitoring and managing the risk of fraud;
•reviewed the scope, resources, results and effectiveness of the internal audit department;
•approved the internal audit plan and subsequent changes to the approved plan;
•ensured that a combined assurance model is applied to provide a co-ordinatedcoordinated approach to all assurance activities;
•nominated the appointment of independent external auditors by the shareholders;
•reviewed and approved the terms of engagement as contained in the engagement letter of the external auditors;
•approved the remuneration of the external auditors;
•pre-approved all non-audit services in line with a revised formal policy on non-audit services;
•assessed the external auditors’ independence;
•annually consider the suitability, after assessing the information provided by the audit firm in terms of section 22.15(h) of the JSE Listings Requirements, for appointment of the audit firm and the designated individual partner;
•assessed the effectiveness of the group’s external audit function;
•approved the appointment of the external auditors to provide independent limited assurance on certain sustainability indicators as included in the Sustainable Development Report;
•assessed the audit tender process for the 2023 year-end audit;
•reviewed developments in reporting standards, corporate governance and best practice;
•monitored the governance of information technology (IT) and the effectiveness of the group’s information systems;
•reviewed the adequacy and effectiveness of the group’s compliance function; and
•evaluated the effectiveness of the committee through a self-assessment.
Proceedings and Performance Review
The current members of the Committee are:
| Audit and Risk Committee Members | AM Ferguson (Chairman and independent NED) | ||||
| R Gasant (Independent NED) | |||||
| MC Richter (Independent NED) | |||||
| JE Tilk (Independent NED) | |||||
| Number of meetings held from January to December 2020 | Five | ||||
NED - Non-Executive Director
The Chief Financial Officer, Senior Vice President: Finance, GroupExecutive Vice President: General Counsel and Company Secretary,Compliance, Senior Vice President: Group Internal Audit; Vice President: Group Tax; Group Risk Manager; Chief Information Officer; Group Compliance Officer, the external auditors, as well as other assurance providers are invited toregularly attend committee meetings in an ex officio capacity and provide responses to questions raised by committee members during meetings. The full Audit and Risk Committee meets separately during closed sessions with management (including the Chief Executive Officer), internal audit and external audit at every scheduled quarterly meeting.
The Audit and Risk Committee assessedwill assess its effectiveness through the completion of an independent external evaluation process, during which results were discussed, actions taken and processes put in place to address areas identified for refinement.
Remuneration and Human Resources Committee
The Remuneration and Human Resources Committee activities are governed by the Terms of Reference (these were reviewed and approved atby the August 2017 Remuneration and Human Resources Committee meeting)board in November 2020). The purpose of the Committee is to assist the Board in discharging its oversight responsibilities relating to all compensation, including annual base salary, annual incentive compensation, long-term incentive compensation, employment,
201
severance pay and ongoing perquisites or special benefit items and equity compensation of the Company’s executives, including the Chief Executive Officer as well as retention strategies, design and application of material compensation programmes and share ownership guidelines.
With respect to its mandate on human resources, the Committee has strategic oversight of matters relating to the development of the Company’s human resources with the main objective of creating a competitive human resource for the Group.
The committeeCommittee operates in an independent role, operating as an overseer with accountability to the board.Board. This is accomplished by:
•Reviewing and approving corporate goals and objectives relevant to the compensation of the executive management team;Chief Executive Officer;
•Evaluating the performance of the executive managementExecutive Management team in light of these goals and objectives annually and setting each executive’s compensation based on such evaluation;
•Ensuring that the mix of fixed and variable pay, in base pay, shares and other elements of compensation meets the company’s requirements and strategic objectives;
•Linking individual pay with operational and company performance in relation to strategic objectives;
•Considering the sentiments and views of the company’s investors;
•Regularly reviewing incentive schemes to ensure continued contribution to shareholder value and ensure that these are administered in terms of the rules;
•Oversee the establishment of a remuneration policy that will promote the achievement of strategic objectives and encourage individual performance.
•Regularly reviewing human resources strategy aimed at ensuring the supply and retention of sufficient skilled resources to achieve the company’s objectives;
•Ensure that the remuneration policy and implementation report is put to a non-binding advisory vote at the general meeting of shareholders once every year; and
•Review the outcome of the implementation of the remuneration policy to ensure that the set objectives are being achieved and fairness is addressed.
The current members of the Committee are:
Remuneration and Human Resource Committee Members | |||||
Number of meetings held from January to December 2020 | Four | ||||
Other individuals who regularly attended meetings (attended by invitation or if needed to contribute pertinent insights and information) | |||||
| SD Van Rensburg (VP: Group Remuneration and Benefits and Secretary to the Committee) | |||||
NED – Non-Executive Director
Remuneration Consultants
The Committee has appointed PwC to provide specialist, independent remuneration advice on all forms of executive and non-executive pay.
Mercer performs an independent bespoke executive survey and its advice is primarily around salary benchmarking for both executive and non-executive pay.
202
6D. EMPLOYEES
The average number of attributable employees (including contractors) in the AngloGold Ashanti group over the last three financial years was:
| 2020 | 2019 | 2018 | |||||||||||||||
| Africa | 16,829 | 15,786 | 14,833 | ||||||||||||||
| Australia | 1,230 | 1,140 | 1,051 | ||||||||||||||
| Americas | 8,789 | 8,114 | 7,973 | ||||||||||||||
| Other, including corporate and non-gold producing subsidiaries | 1,807 | 1,353 | 1,589 | ||||||||||||||
South Africa - discontinued operations (1) | 8,297 | 7,870 | 18,803 | ||||||||||||||
| Total* | 36,952 | 34,263 | 44,249 | ||||||||||||||
| 2017 | 2016 | 2015 | ||||||
| South Africa | 26,245 | 28,507 | 28,325 | |||||
| Continental Africa | 13,593 | 12,691 | 11,942 | |||||
| Australasia | 974 | 925 | 836 | |||||
Americas(1) | 8,511 | 8,126 | 8,432 | |||||
| Other, including corporate and non-gold producing subsidiaries | 2,157 | 2,400 | 2,731 | |||||
| Total* | 51,480 | 52,649 | 52,266 | |||||
(1) In 2020, represents the monthly average number of employees for the nine months as a discontinued operation before completion of sale on 30 September 2020.
Labour relations and collective bargaining
In Continental Africa - labour relations remained stable across the region and, despite labour disputes on salaries at our Malian operations and protracted wage negotiations at Siguiri, there were no production interruptions. The Company successfully completed annual wage negotiations for the period at all sites.region.
In Guinea, at Siguiri, annual93.6% of the mine employees are unionised. Collective bargaining negotiations for wage negotiations ledand conditions and services are said to the conclusion of a one-year wage agreement.start between July and September 2021 and in order to bolster relations and to manage potential conflict, regular capacity building for union/management on collective negotiation techniques and mediation are conducted.
In Ghana, Iduapriem successfully concluded a two-year wage agreement withat Obuasi, the reintroduction of the Ghana Mineworkers Union in respectwas successful and there is an understanding that the level of 2016representation will be limited and 2017. As partnot extend to stratum 1 employees (excluding certain sensitive positions). There was a Board agreement with the union relating to the process of unionisation, and a process to conclude a three-year collective bargaining agreement was embarked upon. At Iduapriem, four unions represent junior staff and senior staff respectively, comprising 94.5% of the employees. These employees are also subject to collective bargaining. Collective bargaining and wage negotiations took place during 2020 and a three-year agreement management andwas successfully negotiated, wage discussions for 2021 are said to be held during the union further committed to the developmentfirst half of a salary adjustment framework which would be a guide for future negotiations.2021.
In Tanzania at Geita, management and55.78% of the majority union reached an agreement on a compressed working-week shift roster effective from December 2017employees are unionised in the bargaining unit. In 2020 business wage negotiations with the unions and a one-year wagenew collective bargaining was successfully concluded without strike action and/ or operational disruption and a process was started to renegotiate the compressed working week agreement implemented effective January 2017.following the termination notice of the existing agreement by the trade union (TAMICO).
In Mali,Brazil, all three collective agreements (Nova Lima/Sabará, Santa Bárbara and Crixás) were signed with the mine labour relations climate was informed by the uncertainty relating to the Sadiola sulphide project and a potential decision that would place the mine in limited operations and care and maintenance phase. The annual wage negotiations were successfully concludedunions and implemented effective 1 August 2020. A new routine to continuously strengthen the relationship with the employees and their representatives was key to that achievement. CVSA, in Argentina, completed the 2020 salaries negotiation in January 2017.
203
6E. SHARE OWNERSHIP
DIRECTORS’ AND PRESCRIBED OFFICERS’ INTERESTS IN ORDINARY SHARES
The interests of directors and prescribed officers in the ordinary shares of the company at 31 December 20172020, which individually did not exceed 1one percent of the company’s issued ordinary share capital are included in the annual financial statements, see "Item 18: Note 32 - Related Parties - Directors’33-Related Parties-Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares".
A register detailing Directors and Prescribed Officers’ interests in contracts is available for inspection at the company’s registered and corporate office. See "Item 10H: Documents on Display".
CHANGE IN DIRECTOR’S AND PRESCRIBED OFFICER’S INTERESTS IN ANGLOGOLD ASHANTI SHARES SINCE 31 DECEMBER 20172020
Refer "Item 18: Note 3233 - Related Parties - Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares"
SHARE OWNERSHIP OF EXECUTIVE OFFICERS/EXECUTIVE MANAGEMENT
MINIMUM SHAREHOLDING REQUIREMENT FOR EXECUTIVES
With effect from March 2013, a minimum shareholding requirement (MSR) is applicablewas introduced for the executive management team (including executive directors). All executive management team members (including executive directors) are required to all executiveshave a minimum shareholding in the Company as indicated below:per the table below.
| Role | Within three | Within six years of appointment/from introduction of MSR (1 January 2020) | Within three years of appointment/from introduction of MSR (prior) | Within six years of appointment/from introduction of MSR (prior) | Holding requirement | ||||||||||||
| CEO | 150% of net annual base salary | 300% of net annual base salary | 100% of net annual base salary | 200% of net base salary | Indefinite | ||||||||||||
| CFO | 125% of net annual base salary | 250% of net annual base salary | 75% of net base salary | 150% of net base salary | Indefinite | ||||||||||||
| Executive Management Team | 100% of net annual base salary | 200% of net base salary | 75% of net base salary | 150% of net base salary | Indefinite | ||||||||||||
The following count towards an individual MSR: •Shares purchased on the market, either directly or indirectly •Vested shares from AngloGold Ashanti's share incentive schemes | |||||||||||||||||
204
The table below summarises each executive director and executive committee member’smember's accomplishment of the MSR:
| Executive | Target Achievement Date | Three Year MSR Target Achievement Percentage | MSR holding as at 31 Dec 2017 as % of net base pay | Six-year MSR Target Achievement Percentage | |||||||
| Executive Directors | |||||||||||
| S Venkatakrishnan | March 2016 | 100 | % | 1,229 | % | 200 | % | ||||
| KC Ramon | March 2018 | 75 | % | 188 | % | 150 | % | ||||
| Prescribed Officers | |||||||||||
| CE Carter | March 2016 | 75 | % | 239 | % | 150 | % | ||||
| GJ Ehm | March 2016 | 75 | % | 387 | % | 150 | % | ||||
L Eybers(1) | March 2020 | 75 | % | 58 | % | 150 | % | ||||
| DC Noko | March 2016 | 75 | % | 519 | % | 150 | % | ||||
| ME Sanz Perez | March 2016 | 75 | % | 405 | % | 150 | % | ||||
C Sheppard(2) | March 2019 | 75 | % | 35 | % | 150 | % | ||||
TR Sibisi(3) | March 2020 | 75 | % | 21 | % | 150 | % | ||||
| Executive | Six-year target achievement date | MSR holding as at 31 December 2020 as a percentage of net base pay | Three-year MSR target achievement percentage | Six-year MSR target achievement percentage | ||||||||||
| Executive directors | ||||||||||||||
KPM Dushnisky (1) | – | 141 | 150 | 300 | ||||||||||
| KC Ramon | March 2021 | 553 | 125 | 250 | ||||||||||
| Prescribed officers | ||||||||||||||
| SD Bailey | January 2025 | 115 | 100 | 200 | ||||||||||
PD Chenard (2) | – | 119 | 100 | 200 | ||||||||||
| GJ Ehm | March 2019 | 279 | 100 | 200 | ||||||||||
| L Eybers | March 2023 | 291 | 100 | 200 | ||||||||||
I Kramer (3) | September 2026 | 27 | 100 | 200 | ||||||||||
L Marwick (4) | July 2026 | 78 | 100 | 200 | ||||||||||
| S Ntuli | March 2025 | 95 | 100 | 200 | ||||||||||
| TR Sibisi | March 2022 | 282 | 100 | 200 | ||||||||||
(1) Resigned as director with his last day being 28 February 2021. MSR holding not required. (2) Retired prescribed officer |
(3) Appointed prescribed officer with effect from 1 September 2020; the opportunity, on a voluntary basis,three-year MSR achievement is due in September 2023.
(4) Appointed prescribed officer with effect from 1 July 2020; the three-year MSR achievement is due in July 2023.
ANGLOGOLD DEFERRED SHARE PLAN (DSP)
On 16 May 2017, the shareholders approved the introduction of the Deferred Share Plan (DSP), to participate incommence effective 1 January 2018. The DSP replaced all previous AGA incentive schemes, i.e. Bonus Share Plan (BSP), Long Term Incentive Scheme (LTIP) and the Co-Investment Plan (CIP), schemes. The last allocations granted in the BSP, LTIP and this hasCIP schemes have vested during 2020; there are no further allocations and vesting as the schemes have been adopted onclosed. The DSP, designed with feedback from shareholders in mind, aims to better align the conditions below:
The scope of participation for the new incentive scheme, Deferred Share Plan in January 2018, the last CIP participation will be in 2018 in respect of the cash bonus for 2017 performance year.
Non-Executive Directors are not eligible to participate in the share incentive scheme.DSP.
205
| Cash | Shares | Total Incentive | |||||||||
| Level | On Target Achievement | ||||||||||
| CEO | 100.00% | 200.00% | 300.00% % % | ||||||||
| CFO | 85.00% % | 185.00% % | 270.00% % % | ||||||||
| EVP/COO | 75.00% % | 174.00% % | 249.00% % % | ||||||||
CEO means Chief Executive Officer.
CFO means Chief Financial Officer.
EVP/COO means Executive Vice President/Chief Operating Officer.
One set of performance metrics is used to determine the cash portion and deferred portion. Future vesting of the deferred portion is subject to continued employment. Effective 1 January 2020, all Executive Committee members including the CEO and CFO have streamlined strategic objectives (KPIs), between 3 to 4 at a maximum, as compared to the previous 10 KPI’s as held by the CEO. Individual KPI’s now account for 20% of the performance scorecard in the shareDSP incentive scheme toand 80% towards the extentcompany scorecard. This was previously 30%/70% for the CEO and 40%/60% for CFO and Exco members.
Company and individual performance measures are assessed over each financial year, with the exception of certain company measures that they are granted options or rights to acquire shares and accept them. All options or rights which have not been exercised within ten years frommeasured over a trailing three-year basis. The first allocation under the date of grant, automatically expire.
PARTICIPATION BY EXECUTIVE DIRECTORS, EXECUTIVE MANAGEMENT TEAM MEMBERS AND OTHER MANAGERS IN THE ANGLOGOLD SHARE INCENTIVE SCHEME
For details of the optionsshare-based awards and rights to subscribe for ordinary shares in each company granted to, and exercised by, executive directors, executive management team members and other managers on an aggregate basis during the year to 31 December 2020 and subsequent to year end up to 19 March 2021, see "Item 18: Financial Statements-Note 33-Related Parties-Directors and other key management personnel".
PARTICIPATION BY EMPLOYEES IN THE ANGLOGOLD SHARE INCENTIVE SCHEME
For details of the share-based awards and rights to subscribe for ordinary shares in the company granted to, and exercised by, executive directors, executive management and other managersemployees on an aggregate basis during the year to 31 December 2017 and subsequent to year end up to 16 March 2018,2020, see "Item 18: Financial Statements—Note 32 - Related Parties - Directors and other key management personnel - Number of options and awards granted"11—Share—based payments".
206
Bonus Share Plan(1) | Long-Term Incentive Plan(1)(2) | |||||
| At 1 January 2017 | 4,198,285 | 4,435,368 | ||||
| Movement during the year | ||||||
– Granted | 1,926,549 | — | ||||
– Exercised | (1,426,554 | ) | (404,301 | ) | ||
– Lapsed/forfeited | (218,601 | ) | (1,512,857 | ) | ||
| At 31 December 2017 | 4,479,679 | 2,518,210 | ||||
| Subsequent to year-end | ||||||
– Exercised | (64,165 | ) | (7,344 | ) | ||
– Lapsed/forfeited | (19,995 | ) | (5,593 | ) | ||
| At 28 February 2018 | 4,395,519 | 2,505,273 | ||||
ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Overview
Description of AngloGold Ashanti’s share capital
AngloGold Ashanti’s share capital consists of four classes of stock:
•Ordinary shares, par value 25 South African cents each (the “ordinary shares”);
•A redeemable preference shares, par value 50 South African cents each (the “A preference shares”);
•B redeemable preference shares, par value 1 South African cent each (the “B preference shares”); and
•C redeemable preference shares of no par value (the “C preference shares”).
The authorised and issued share capital of AngloGold at 31 December 20172020 is set out below:
| Title of class | Authorised | Issued | ||||||||||||
| Ordinary shares | 600,000,000 | 416,890,087 | ||||||||||||
| A preference shares | 2,000,000 | 2,000,000 | ||||||||||||
| B preference shares | 5,000,000 | 778,896 | ||||||||||||
| C preference shares | 30,000,000 | 0 | ||||||||||||
| Title of class | Authorised | Issued | ||||
| Ordinary shares | 600,000,000 | 410,054,615 | ||||
| A preference shares | 2,000,000 | 2,000,000 | ||||
| B preference shares | 5,000,000 | 778,896 | ||||
| C preference shares | 30,000,000 | 0 | ||||
All the issued ordinary shares, A redeemable preference shares and B redeemable preference shares are fully paid and are not subject to further calls or assessment by AngloGold Ashanti. For a discussion of rights attaching to the ordinary shares, the A redeemable preference shares, the B redeemable preference shares and the C redeemable preference shares, see “Item 10B: Memorandum of Incorporation”.
The following are the movements in the ordinary issued share capital at 31 December:
Ordinary shares
| Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | |||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||||||
| At 1 January | 415,301,215 | 103,825,307 | 412,769,980 | 103,192,498 | 410,054,615 | 102,513,654 | ||||||||||||||||||||||||||||||||
| Issued during the year: | ||||||||||||||||||||||||||||||||||||||
| Exercise of options by participants in the AngloGold Share Incentive Scheme | 1,588,872 | 397,218 | 2,531,235 | 632,809 | 2,715,365 | 678,844 | ||||||||||||||||||||||||||||||||
| 31 December 2020 | 416,890,087 | 104,222,525 | 415,301,215 | 103,825,307 | 412,769,980 | 103,192,498 | ||||||||||||||||||||||||||||||||
Number of Shares | Rand | Number of Shares | Rand | Number of Shares | Rand | |||||||||||||
| 2017 | 2016 | 2015 | ||||||||||||||||
| At 1 January | 408,223,760 | 102,055,940 | 405,265,315 | 101,316,329 | 404,010,360 | 101,002,590 | ||||||||||||
| Issued during the year: | ||||||||||||||||||
| Exercise of options by participants in the AngloGold share Incentive Scheme | 1,830,855 | 457,714 | 2,958,445 | 739,611 | 1,254,955 | 313,739 | ||||||||||||
| 410,054,615 | 102,513,654 | 408,223,760 | 102,055,940 | 405,265,315 | 101,316,329 | |||||||||||||
During the period 1 January 20182021 to and including 19 March 2018, 683,5442021, 351,674 ordinary shares were issued at an average issue price of R178.70R231.06 per share, resulting in 410,738,159417,241,761 ordinary shares being in issue at 19 March 2018.2021.
Redeemable preference shares
Ashanti. The C redeemable preference shares have no par value but have the same rights as the B preference shares save that the C preference shares rank after the B preference shares (but prior to the A preference shares) as regards the payment of dividends, redemption proceeds and payment on winding up of the company. The process to cancel all the A, B and C redeemable preference shares is ongoing.
207
7A. MAJOR SHAREHOLDERS
According to information available to the directors, the following are the only shareholders or their associates holding, directly or indirectly, in excess of 5five percent of the ordinary issued share capital of the company:
| Ordinary shares held at | 31 December 2020 | 31 December 2019 | 31 December 2018 | |||||||||||||||||||||||||||||||||||
| Shareholder* | Number of Shares | Percent Voting Rights | Number of Shares | Percent Voting Rights | Number of Shares | Percent Voting Rights | ||||||||||||||||||||||||||||||||
| Public Investment Corp. of South Africa | 39,846,637 | 9.56 | 30,439,075 | 7.33 | 25,395,823 | 6.15 | ||||||||||||||||||||||||||||||||
| BlackRock Inc. | 27,956,084 | 6.71 | 41,236,154 | 9.93 | 32,926,713 | 7.98 | ||||||||||||||||||||||||||||||||
| Van Eck Global | 26,488,311 | 6.35 | 27,375,511 | 6.59 | 52,402,004 | 12.70 | ||||||||||||||||||||||||||||||||
| Ordinary shares held at | 31 December 2017 | 31 December 2016 | 31 December 2015 | ||||||||||||
| Shareholder* | Number of Shares | Percent Voting Rights | Number of Shares | Percent Voting Rights | Number of Shares | Percent Voting Rights | |||||||||
| BlackRock Inc. | 38,926,159 | 9.49 | 42,966,540 | 10.53 | |||||||||||
| Public Investment Corp. of South Africa | 25,808,607 | 6.29 | 25,580,542 | 6.27 | 25,936,314 | 6.40 | |||||||||
| Van Eck Global | 24,485,374 | 6.00 | 26,941,752 | 6.65 | |||||||||||
| Investec Asset Management (Pty) Limited (South Africa) | 31,185,069 | 7.69 | |||||||||||||
| Paulson & Co., Inc | 25,027,300 | 6.18 | |||||||||||||
| Dimensional Fund Advisors | 20,901,571 | 5.16 | |||||||||||||
* Shares may not necessarily reflect the beneficial shareholder.
At 31 December 2017,2020, a total of 159,347,405145,927,871 shares (or 3935 percent of issued ordinary share capital) were held by The Bank of New York Mellon, as Depositary for the company’s American Depositary Receipt programme. Each American Depositary Share (ADS) is equivalent to one ordinary share. At 31 December 2017,2020, the number of persons who were registered holders of ADSs was reported at 2,423.2,095. AngloGold Ashanti is aware that many ADSs are held of record by brokers and other nominees, and accordingly the above numbers are not necessarily representative of the actual number of persons who are beneficial holders of ADSs or the number of ADSs beneficially held by these persons.
All ordinary shareholders have the same voting rights.
As at 31 December 2017,2020, there were 11,92523,043 holders on record of AngloGold Ashanti ordinary shares. Of these holders 447498 had registered addresses in the United States and held a total of 56,677,31667,474,889 ordinary shares, 13.8216.18 percent of the total outstanding ordinary shares. In addition, certain accounts on record with registered addresses outside the United States, including The Bank of New York Mellon, hold AngloGold Ashanti ordinary shares, in whole or in part, beneficially for United States persons.
At 19 March 2018,2021, a total of 164,571,109148,623,301 ADSs or 4036 percent of total issued ordinary share capital were issued and outstanding and held on record by 2,4022,072 registered holders.
Insofar as is known to AngloGold Ashanti, there was no person who, directly or indirectly, jointly or severally, exercised or could exercise control over AngloGold Ashanti, nor is AngloGold Ashanti aware of any arrangements which might result in a change in control of AngloGold Ashanti.
208
7B. RELATED PARTY TRANSACTIONS
The Company had the following transactions with related parties during the year ended 31 December 2017:
December:
Purchases from related party | ||||||
| (in million) | $ | |||||
| Purchases of goods and services from related parties | ||||||
| Rand Refinery (Pty) Limited | ||||||
Margaret Water Company(1) | ||||||
Société d’Exploitation des Mines d’Or de Sadiola S.A.(1) | ||||||
| 2020 | |||||
| Sales and services rendered to related parties | |||||
| (in million) | $ | ||||
| Sales and services rendered to related parties | |||||
| Rand Refinery (Pty) Limited | 11 | ||||
Mali joint ventures (1) | 8 | ||||
| 19 | |||||
(1) The Sadiola and Morila joint ventures in Mali, and the Margaret Water Company in South Africa were sold during 2020.
Amounts due by joint ventures and associates arising from purchases of goods and services are unsecured and non-interest bearing.
As at 31 December 20172020 the outstanding balances arising from the sale of goods and services due by related partiesassociates and joint ventures is $9m.$11 million.
As at 31 December 20172020 there are no outstanding balances arising from loans owed to related parties.
209
7C. INTERESTS OF EXPERTS AND COUNSEL
Not applicable.
210
ITEM 8: FINANCIAL INFORMATION
211
8A. CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION
See “Item 18: Financial statements”Statements”.
212
LEGAL PROCEEDINGS
There is no material proceeding in which a director, officer or affiliate of AngloGold Ashanti is either a party adverse or has a material interest adverse to the company.
In addition to the proceedings described below, the company becomes involved, from time to time, in various claims, legal proceedings and complaints incidental to the ordinary course of its business.
TAX MATTERS
•The State of Minas Gerais v. Mineração Serra Grande S.A. (MSG): In Brazil, MSG received a tax assessment in October 2003 from the State of Minas Gerais related to VAT on gold bullion transfers. The tax administrators rejected the company’sMSG’s appeal against the assessment. The companyMSG is now appealing the dismissal of the case to the State Court of Minas Gerais. The assessment is approximately $13.6$9 million. Any possible payment by MSG would be set off by an indemnity from Kinross Gold Corporation (Kinross) of $8.4 million.
$6 million provided for as part of the company’s acquisition of Kinross’ interest in MSG in 2012. The matter is currently pending in the State Court of Minas Gerais.•Brazilian tax authorities v. AngloGold Ashanti BrazilCórrego do Sítio Mineração (AABM): SA: AngloGold Ashanti’s subsidiaries in Brazil, including AABM,AGA Mineração (formerly AngloGold Ashanti Brasil Minera��ão Ltda) and MSG, are involved in various disputes with the Brazilian tax authorities. These disputes date back to 2007 and involve federal tax assessments including income tax, royalties, social contributions, VAT and annual property tax. In December 2017,Various new claims, relating to VAT assessments (totalling $14 million)on diesel and consumables, for $12 million were received.assessed by management during the second half of 2020 and classified as possible claims, based on external legal opinions. Collectively, the total possible amount involved across all disputes is approximately $24$42 million.
In January 2018, AGAC received notice from the DIAN that it also disagreed with AGAC’s 2013 income and equity tax returns on the same basis as the 2010 and 2011 returns, calculating additional tax, along with penalties and interest, of $9 million. On 13 March 2020, AGAC filed a lawsuit before the Administrative Court of Cundinamarca challenging the DIAN’s 2013 assessment. The matter is currently pending. In May 2019, AGAC received notice from the DIAN that it also disagreed with AGAC’s 2014 income and equity tax returns on the same basis as the 2010, 2011 and 2013 returns, calculating additional tax, along with penalties and interest, of $7 million.
In February 2019, Gramalote received notice from the DIAN that it disagreed with its 2013 income and equity tax returns on the same basis as the abovementioned AGAC returns, calculating additional tax, along with penalties and interest, of $9 million which was confirmed in its official assessment issued on 24 January 2020. On 17 September 2020, Gramalote filed a lawsuit before the Administrative Court of Cundinamarca to challenge the official assessment of the DIAN disagreeing with Gramalote’s 2013 income and equity tax returns. In addition, in March 2019, Gramalote received notice from the DIAN that it disagreed with its 2014 income and equity tax returns on the same basis as its 2013 returns, calculating additional tax, along with penalties, of approximately $3 million. In October 2019, the DIAN issued the official assessment for 2014 confirming this amount. On 23 December 2019, Gramalote filed a motion for reconsideration before the DIAN.
The total amount claimed by the DIAN, related to the above tax matters, amounts to $162 million of which $143 million relates to penalties and interest.
Argentina Tax Authority (AFIP) andv. Cerro Vanguardia S.A. (CVSA):On 12 July 2013, CVSA received a notification from the AFIP requesting corrections to the 2007, 2008 and 2009 income tax returns of about $6$1.3 million relating to the non-deduction of tax losses previously claimed on hedge contracts. The AFIP is of the view that the financial derivatives could not be considered as hedge contracts, as hedge contract losses could only be offset against gains derived from the same kind of hedging contracts.Penalties and interest on the disputed amounts are estimated at a further $21$6.6 million. CVSA and AFIP have corresponded on this issue over the past several years, and the government continuesArgentinian tax authorities continue to assert its
213
their position regarding the use of the financial derivatives. CVSA filed an appeal with the Tax Court on 19 June 2015, and the parties submitted their final reports in July 2017. The matter is pending with the Tax Court.
•Ghanaian tax authorities v. AngloGold Ashanti (Ghana) Limited (AGAG): In Ghana, AGAGreceived tax assessments of $28$11.1 million as of 31 December 20132020 in respect of the 2006-2008 and 2009-20112004-2014 tax years, following an audit by the Ghanaian tax authorities related to withholding taxes on payments to non-resident persons. AGAG raised objections with the Ghanaian tax authorities and believes that the withholding taxes were not properly assessed and has lodged an objection to the assessment. In 2012,assessed. On several occasions, most recently in 2017, AGAG met with the Commissioner-General of the Ghana Revenue Authority and provided its position in writing together with the relevant supporting documentation. AGAG has yet to receive a response from the Commissioner-General. Nonetheless, in 2015 the tax authorities again raised the issue of paying withholding taxes as part of their findings covering the 2012 - 2014 tax years. AGAG raised objections with the tax authorities.
COLOMBIA
•Santa María-Montecristo and La Colosa class action lawsuits: Four (4) classlawsuits: Class action lawsuits are pendinghave been filed in relation to each of AngloGold Ashanti Colombia S.A.’s (AGAC) Santa Maria-MontecristoMaría-Montecristo and La Colosa projects. Each lawsuitof the two lawsuits aims to stop exploration and mining in certain restricted areas affected by the projects due to environmental concerns or alleged breachesconcerns.
In respect of environmental laws. Inthe Santa María-Montecristo class action lawsuit, in September 2011, the Administrative Court of Tolima granted one of these lawsuits, the court granted the plaintiffplaintiffs a preliminary injunction suspending AGAC’s mining concession contracts in relation to this project. AGAC challenged this injunction. On 30 May 2019, the Administrative Court of Tolima ruled that a technical study be prepared to define the places in which mining activities could be performed in the Combeima canyon without posing any threat to the water reservoirs of Ibagué, the capital of the Tolima department. In respect of the Santa María-Montecristo class action lawsuit, in September 2011, the Administrative Court of Tolima granted one of the plaintiffs a preliminary injunction suspending theAGAC’s mining concession contracts of the Santa Maria-Montecristoin relation to this project. TheAGAC has challenged this injunction, nevertheless, it remains in place during the course of the court proceedings. On 30 May 2019, the Administrative Court of Tolima ruled that a technical study be prepared to define the places in which mining activities could be performed in the Combeima canyon without posing any threat to the water reservoirs of Ibagué, the capital of the Tolima department. On 14 September 2020, the Council of State of Colombia (the highest court for administrative matters) on appeal overruled Tolima’s Administrative Court decision. The Council of State’s decision, which is final and not subject to further appeal, determined that AGAC, as concessionaire, has been challenged by AGAC; however,a right to develop the project if it iscan demonstrate to the mining and environmental authorities on the basis of technical studies that its mining exploration and, eventually, exploitation activities, will not a critical path item forimpact the project.water resources of the Coello River basin and its tributaries.
The consolidated La Colosa class action lawsuit originally consisted of four separate class actions. In another lawsuit,relation to this project, on 10 October 2016, Tolima’s Administrative Court ordered that a technical study be prepared by April 2017 by a panel of seven (7) experts (selected by the plaintiff, AGAC, universities, the Colombian government and an NGO) to determine whether the La Colosa Projectproject presents a “threat” to the environment during its exploration phase. AGAC successfully appealed the order to prepare the technical study and the order has been temporarily suspended, pending resolution by the State Council (appellate court). In another of the lawsuits, onOn 4 December 2017, Ibague’sIbagué’s Third Administrative Court ordered that aanother technical study, similar to the one described onin the October 2016 order, be prepared for the La Colosa Project.project. AGAC also intendsappealed both orders. On 6 September 2018, Tolima’s Administrative Court consolidated all class actions in relation to the La Colosa project into one single class action lawsuit which is currently pending before the Council of State. The orders to prepare the technical studies have been temporarily suspended pending resolution by the Council of State. If AGAC’s appeal this order.before the Council of State is not successful, the company may have to perform one or more technical studies in relation to the La Colosa project. If the studies were to conclude that a “threat” exists, certain development activities at the La Colosa project may be suspended.
•Cortolima’s injunction against AGACAngloGold Ashanti Colombia S.A. (AGAC): On 11 In March 2013, Cortolima, a regional environmental authority in Colombia,the Tolima department, issued a regulatory injunction against AGAC alleging, among other things, that in relation to certain of AGAC’s La Colosa explorationmine design-related activities AGAC (1) did not provide timely notice toin the government prior to performing certain exploration activities and (2)municipality of Piedras, AGAC engaged in drilling and other activities that could have negative effects on the environment. On 22 MarchThe injunction did not include any allegation that AGAC’s actions actually caused any environmental damages in Piedras. AGAC’s challenge of the injunction was unsuccessful before Cortolima. In August 2013, AGAC challengedinitiated legal proceedings before the injunction,Council of State of Colombia (the highest court for administrative matters) seeking an annulment of the action and theinjunction as well as restoration of AGAC’sits rights to continue explorationits activities in the area. The requestIn November 2019, the Council of State ruled that the competent judicial authority to annuldecide on this matter is the Administrative Court of Tolima and referred the case to that court. On 30 July 2020, the Twelfth Administrative Court of Tolima ruled that since the injunction was denied byis a preliminary and temporary measure imposed as part of the Director ofadministrative approval process within Cortolima and not a final decision, it is not yet amenable to administrative judicial review. AGAC subsequently appealed this decision. The appeal is continuing with its plans to challenge the injunction through a variety of legal actions. On 31 August 2013, AGAC presentedcurrently pending before the State Council its claim for the annulment and rights re-establishment. ThisAdministrative Superior
214
Court of Tolima. The company expects that a final resolution of this matter is pending. While the injunction remainswill include payment of a penalty by AGAC in place, AGACan amount that is not ableexpected to engage in certain of its activities related to the La Colosa Project.
be material.•Piedras and Cajamarca: popular consultations: In 2013, the Council forlocal council of the city of Piedras, near the La Colosa Project, issuedproject, organised a referendum attemptingpopular consultation to ban all mining activities in Piedras. This referendum doesPiedras (Piedras popular consultation), the result of which was validated by the Administrative Court of Tolima as part of an administrative procedure. Although the Piedras popular consultation did not have an immediate impact on the La Colosa Project, however,project (due to its distant location from the project), AGAC believes this referendum isthe Piedras popular consultation was in violation of federal law. The referendum was subsequently validated by the local administrative courtnational law in Tolima (the Department in which Piedras is located).Colombia. In 2013, AGAC subsequently filed a request for annulment of the referendum with the Second Administrative Court of Ibaque and a tutela‘tutela’ action (a legal action alleging a violation of AGAC’s constitutional rights) with the Council of State Council (Supreme Courtof Colombia (the highest court for administrative purposes)issues). On 21 AugustIn 2014, AGAC’s ‘tutela’ action was dismissed by the State Council dismissed the tutela actionof State for lack of standing which AGEAC appealed to a different division of the State Council. On 11 December 2014, this State Council division affirmed the earlier dismissal on the grounds that AGAC did not have mining tenements in Piedras. However,In addition, in the same ruling the court recognised that Piedras did not follow the correct procedure when it issued the 2013 referendum. AGAC’s2015, AGAC filed a request for annulment of the referendumadministrative acts adopted by the local authorities in furtherance of the results of the Piedras popular consultation, which was rejected by the Second Administrative Court of Ibagué. AGAC’s appeal of this ruling is pending.
currently pending before the Administrative Court of Tolima which will have to decide on this matter in light of the recent ruling of the Constitutional Court on popular consultations described below.•La Colosa Human Rights Litigation:Litigation: In November 2014, the Personero (Ombudsman) of IbaqueIbagué, the capital of the Tolima department, filed suita petition against the Colombian government before the Inter-American Commission on Human Rights (Commission), based in Washington, D.C., for alleged human rights violations protected by the American Convention on Human Rights (Convention) which has been ratified by Colombia along with many other Central and South American countries. The Commission has the power to refer a case to the Inter-American Court of Human Rights. This CourtRights (Court) which is an autonomous judicial institution based in San José, Costa Rica whose purpose is the application and interpretation of the American Convention on Human Rights (Colombia, along with many other Central and South American countries, has ratified this Convention).Convention. The suitpetition alleges that the Colombian government has faileddenied justice to protect the interestsPersonero as a result of the peoplefailure of Ibaque by issuing permits to AGAC for the La Colosa project and by failingColombian judiciary to resolve the issues raised in two class actions that have been pending for an extendedfiled by him before the local Colombian administrative courts within a reasonable period of time. Although AGAC is not a party to the suit, its outcome is nevertheless important to the development of the La Colosa project. The first step inCommission currently has not accepted nor referred the litigation process is forcase to the Court to decide whether to accept the case.Court. If the case iswould be accepted or referred in the future, the Colombian government will have to defend itself against the lawsuit and will be bound by the findings of the Court. AGAC continues to regularly follow-upfollow up with the Colombian government for updates.
•Paramo Delimitation: Delimitation: In November 2016, the Colombian government issued Resolution 1987 which delineatesdelineating certain wetlands or moorlands as environmentally important and establishes protected areas, andwhich designation includes certain areas in and around the La Colosa Project.project. In these areas there are limitations, or in some instances outright bans, on mining and mining-related activities. These limitations and bans could potentiallyadversely impact the design, operations and production of the mining project at the La Colosa Project.project. On 12 June 2017, AGAC filed suit against the Colombian Ministry of the Environment in the Administrative TribunalCourt of CajamarcaCundinamarca to challenge the paramo delimitationannul Resolution 1987 on technical and other grounds. The lawsuit was admitted on 30 April 2019. The Ministry of the Environment, as defendant in this action, is pending admission.
expected to file its response to the annulment claim.•Zonte Metals:Metals: A Canadian junior mining company, Zonte Metals, filed applications for title to certain corridors, or small slivers of land, overlaying sections of the Gramalote project. The Secretary of Mines of Antioquia, the department in Antioquiawhich the Gramalote project is located, denied the applications filed by Zonte Metals. However, Zonte Metals then filed a claim against the Colombian National Mining Agency (ANM) and the Antioquia Secretary of Mines before the ColombianCouncil of State Council,of Colombia, by which it seeks to (i) revoke the resolution that denied its application and (ii) obtain the rights over the corridors requested in its application. The Council of State subsequently enjoined the Antioquia Secretary of Mines and AGACGramalote Colombia Limited (Gramalote) from moving forward onprogressing a pending application to integrate the disputed corridors with ourGramalote’s tenement. The Antioquia Secretary of Mines has filed its response to the Zonte Metals claim, which includes arguments aligned with the interests and position of Gramalote. On 4 September 2017, the Council AGACof State approved AGAC’sGramalote’s request to be made an interested party to the lawsuit.lawsuit, but it rejected Gramalote’s request to join the Antioquia Secretary of Mines as a co-defendant on 28 August 2019. On 24 January 2019, the Council of State also re-affirmed that the Council of State is the competent judicial authority to hear the matter. The date for the first hearing is currently pending.
215
GHANA
•Pompora Treatment Plant Litigation: On 022 April 2013, AGAGAngloGold Ashanti (Ghana) Limited (AGAG) received a summons from Abdul Waliyu and 152 others in which the plaintiffs allege that they were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected by emissions and/or other environmental impacts arising in connection with the current and/or historical operations of the Pompora Treatment Plant (PTP), which was decommissioned in 2000. The plaintiffs’ alleged injuries include respiratory infections, skin diseases and certain cancers. The plaintiffs subsequently did not timely file their application for directions but AGAG intends to allow some time to pass prior to applying to have the matter dismissed for want of prosecution. On 24 February 2014, executive members of the PTP (AGAG) Smoke Effect Association (PASEA) (Frank Adjei Danso and five others), sued AGAG by themselves and on behalf of their members (undisclosed number) on grounds similar to those discussed above, as well as economic hardships resulting from the failure of their crops. This matter has been adjourned indefinitely. AGAG intends to allow some time to pass prior to applying to have the matter struck out for want of prosecution.
•Mining and Building Contractors Limited: On 11 October 2011, AGAG terminated Mining and Building Contractors Limited’s (MBC) underground development agreement, construction on bulkheads agreement and diamond drilling agreement at Obuasi mine. The parties reached agreement on the terms of the separation and concluded a separation agreement on 8 November 2012. In February 2014, AGAG was served with a demand issued by MBC claiming a total of $97 million. In December 2015, the proceedings were stayed in the Ghanaian High Court pending arbitration. In February 2016, MBC submitted the matter to arbitration. The arbitration panel has been constituted and held an arbitration management meeting to address initial procedural matters on 26 July 2019. On 1 May 2020, the Ghana Arbitration Centre granted MBC’s request to stay the arbitral proceedings indefinitely to enable it and AGAG to explore possible settlement. •Ghana Mining Licenses Litigation: In January 2019, AGAG and AngloGold Ashanti (Iduapriem) Limited (AAIL), along with other Ghanaian mining companies, were served with writs by two members of the Ghanaian Parliament seeking to invoke the jurisdiction of the Ghanaian Supreme Court (highest court in Ghana) for a declaration that the mining companies were not entitled to carry out any exploitation of minerals otherwise allowed under their relevant mining leases unless the leases had been timely ratified by the Parliament of Ghana. On 19 January 2019, the Ghanaian Attorney General filed its statement of case, agreeing with the position of the plaintiffs (that the mining leases required parliamentary ratification) and requesting that the Supreme Court order the mining companies to pay the Ghanaian government all revenue related to mining activities accrued during the time such mining leases were unratified. On 18 April 2019, AGAG and AAIL, in coordination with the other mining companies, filed their statement of case. The Supreme Court has not yet set a date for the first hearing to commence the case. On 13 December 2019, AGAG, together with six other mining companies, were served with writs by a private individual seeking similar relief in the High Court |
GUINEA
•Government of Guinea (National Claim Commission) v. Société AngloGold Ashanti Goldfields de Guinée SA (SAG): A national claim recovery commission established by the government of Guinea has demanded that SAG pay $43 million in dividends and penalties that would allegedly have been owed to the government of Guinea for the accounting years 2004 - 2007. SAG opposes the claim. The twoEven though both parties had originally decided to submit their dispute to an independent audit firm to be appointed by a common accord; however,accord, the independent audit firm was never appointed. In December 2010, the national claim recovery commission was disbanded and the matter was turned over to the Inspector General of the Ministry of Finance.Finance of Guinea. This matter has been dormant since it was handed over to the Inspector General.
TANZANIA
•Geita Gold Mining Limited (GGM): In January 2007, Jackson Manyelo and other plaintiffs filed a suit against GGM in the Mwanza High Court alleging that they were affected by blasting activities in the Katoma area carried out by GGM and had suffered damages in the amount of Tshs9.6TZS9.6 billion (approximately $6 million). On 30 April 2015, the High Court issued a judgement in favour of GGM. In 2016, Plaintiffsplaintiffs appealed to the Court of Appeal, where the matter is pending.
216
(UNCITRAL). The Arbitral Tribunal has been duly constituted. The next step will be forSince January 2019, at the request of the parties, the arbitral proceedings have been stayed several times in order to afford the parties the opportunity to achieve an amicable resolution of the dispute and as a result of the impact of the COVID-19 pandemic. Recently, on 5 October 2020, the Tribunal granted another extension to holdstay the proceedings until 12 March 2021 on the basis that the parties were making progress with negotiations after COVID-19 restrictions were eased. The extension should be considered final unless new circumstances justify a first procedural hearing.
further extension. On 15 March 2021, and due to continuing COVID-19 issues in sub-Saharan Africa, GGM and Samax requested a further extension to stay the proceedings. This request is pending with the Tribunal.•Arbitration under the United Kingdom-Tanzania Bilateral Investment Treaty (UK-Tanzania BIT):Separate fromUnrelated to the arbitration proceedings under the MDA described above, on 044 September 2017, the Companies (togetherGGM and Samax, together with Cluff Oil Limited and Cluff Mineral Exploration Limited) wrote toLimited, notified the Governmentgovernment of Tanzania setting outin writing that the Government of Tanzania’sTanzanian government’s conduct amounted to a breach of its commitments under the UK-Tanzania BIT (the Notice). The NoticeBIT. This notice triggered a ‘cooling-off’ period under the UK-Tanzania BIT, pursuant to which the parties had six months to achieve an amicable resolution to their dispute (the Cooling Off Period). The Cooling Off Period expired 04dispute. Following the expiry of the ‘cooling off’ period on 4 March 2018, and now the Companies,GGM, Samax, Cluff Oil Limited and Cluff Mineral Exploration Limited are now entitled to submit their dispute with the Governmentgovernment of Tanzania to ICSID arbitration in accordance with the terms of the UK-Tanzania BIT.BIT to the extent that they may deem this necessary.
BRAZIL
•Public Civil Action between Mineração Serra Grande S.A. (MSG) and the Goiás State Public Prosecutor's Office (Prosecutor): On 28 August 2019, the Prosecutor filed a public civil action against MSG in the local court of Crixás (Court) arguing that the Serra Grande tailings dam should be deactivated and decommissioned due to its size and upstream construction method. The Prosecutor requested the Court to grant an injunction ordering MSG to, inter alia, completely deactivate the tailings dam by 15 September 2021 and decommission the tailings dam, including complete removal of tailings material, by 15 September 2022. Further, the Prosecutor requested that a daily penalty of approximately $245,000 be imposed for MSG’s failure to comply with such injunction. MSG submitted its defence on 27 September 2019 and contends that it has not violated any Brazilian laws or regulations applicable to operations of the Serra Grande tailings dam. On 10 February 2020, the Court granted an injunction in respect of a number of the requests made by the Prosecutor. In line with the legal requirements of ANM Resolution No. 13/19, the injunction ordered the deactivation of the Serra Grande tailings dam by 15 September 2021, but did not include requirements to decommission the tailings dam, or to conduct complete removal of tailings material, by 15 September 2022. On 20 February 2020, MSG filed a motion for clarification in relation to certain items of the Court’s decision. On 25 May 2020, the Court clarified that its injunction should be interpreted in line with the legal requirements of ANM Resolution No. 13/19. On 4 June 2020, the Prosecutor presented further technical arguments in court, reiterating its request for an injunction ordering MSG to, inter alia, deactivate the tailings dam by September 2021 and to decommission the tailings dam, including complete removal of tailings material. On 22 June 2020, MSG filed an interlocutory appeal against the preliminary injunction granted on 10 February 2020 and a motion for further clarification. In August 2020, both MSG and the Prosecutor filed petitions informing the Court that the parties did not wish to produce oral evidence at a hearing. This matter is ongoing.
•Public Civil Action between AngloGold Ashanti Córrego do Sítio Mineração SA (AGA Mineração) and the Minas Gerais State Public Prosecutor's Office (Prosecutor): In March 2020, the Prosecutor filed a public civil action against AGA Mineração in the local court of Sabará (Court) alleging a violation of Minas Gerais Law No. 23.291/19, which was adopted in February 2019. Article 12 of this law prohibits the grant of an environmental license for construction, installation, expansion or raising of a tailings dam if the “dam break” studies identify communities that are located in the self-rescue zone. In February 2020, the state of Minas Gerais approved AGA Mineração’s permit to operate the Cuiabá tailings dam following the determination by the Minas Gerais’ Attorney’s Office that Law No. 23.291/19 does not apply to tailings dams already in operation. In its lawsuit, the Prosecutor requested the Court to grant an injunction ordering the suspension of AGA Mineração’s operational permit for the Cuiabá tailings dam on the grounds that it was issued in violation of this law. During the months of March through May 2020, all parties presented their arguments in court. In June 2020, the Court rejected the Prosecutor’s request to grant an injunction. In July 2020, the Court’s decision not to grant an injunction was upheld on appeal by the Court of Appeals of Minas Gerais. Subsequently, the Court issued an order proposing a conciliation hearing between the parties. None of the parties objected to such conciliation hearing and a date remains to be scheduled by the Court. This matter is ongoing.
217
DIVIDENDS
General
Dividends are proposed by and approved by the board of directors of AngloGold Ashanti (Board), based on the company’s financial performance.performance and compliance with applicable laws, including in respect of the solvency and liquidity test contemplated in the Companies Act. Dividends are recognised when declared by the board of directors of AngloGold Ashanti.Board. AngloGold Ashanti’s dividend policy allows the Board to declare an annuala semi-annual dividend to be based on 1020 percent of the free cash flow generated by the business for that financial year, before taking into account growth capital expenditure.expenditure, subject to applicable laws required to be complied with before a dividend may be declared by the Board. The Board may exercise its discretion on an annual basis, taking into consideration the prevailing market conditions, balance sheet flexibility and future capital commitments of the group.
Dividends declared (in the ordinary course from trading and non-trading profits) to foreign shareholders are not subject to the approval by the South African Reserve Bank (SARB) in terms of South African foreign exchange control regulations. Dividends are freely transferable to foreign shareholders from both trading and non-trading profits earned in South Africa by publicly listed companies. Dividends in specie or special dividends may require SARB approval prior to declaration and payment to foreign shareholders.
Under South African law, the company may declare and pay dividends from any reserves included in total shareholder’s equity (including share capital and share premium) calculated in accordance with International Financial Reporting Standards (IFRS), subject to the solvency and liquidity test.
Withholding tax
South Africa currently imposes a Dividend Withholding Tax on Companies (dividends tax) at a rate of 20 percent on the net amount of the dividend declared and paid by a resident company, other than a Headquarter Company. On 22 February 2017, the rate increased from 15 percent to 20 percent for any dividends paid after 1 March 2017.
The dividends tax is generally imposed on the beneficial owner.owner of the dividends. The dividends paid to South African shareholders may be exempt from dividend withholding tax couldin terms of certain domestic exemptions, or may be reduced to a lower rate under an applicable double tax treaty, if all requirementsthe required declarations and undertakings are met.provided by the beneficial owner of the dividend. In the case of dividends paid to a US holder with respect to shares, the TreatyConvention Between the Government of the United States of America and the Republic of South Africa for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains, signed 17 February 1997 (Treaty) would generally limit the dividends tax rate to five percent of the gross amount of the dividends if a corporate US holder holds directly at least 10 percent of the voting stock of AngloGold Ashanti. In all other cases, the maximum tax rate under the Treaty is 15 percent of the gross amount of the dividend. There are differentDifferent rules to considermay apply if the beneficial owner of the dividends is a US resident who carries on business in South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed basepermanent establishment situated in South Africa, and the dividends are attributable to such permanent establishment or fixed base. Moreover, if the dividends tax rate is reduced under the auspicesestablishment.
218
8B. SIGNIFICANT CHANGES
Refer to “Item 18: Financial Statements—Note 36—Recent developments”37—Subsequent Events”.
219
ITEM 9: THE OFFER AND LISTING
9A. OFFER AND LISTING DETAILS
The following table sets out, for the periods indicated, the reported high and low market quotationsprincipal trading markets for AngloGold Ashanti’s ordinary shares onare the New York Stock Exchange (NYSE), in the form of ADSs, under the symbol “AU” and the JSE and for its sponsored ADSs onLimited, in the NYSE:form of ordinary shares, under the symbol “ANG”. Each ADS represents one ordinary share.
9B. PLAN OF DISTRIBUTION
| JSE | NYSE(1) | ||||||||||
Year ended 31 December | High | Low | High | Low | |||||||
| (South African cents per ordinary share) | (US dollars per ADS) | ||||||||||
| Annual information | |||||||||||
| 2013 | 27,048 | 11,401 | 31.88 | 11.14 | |||||||
| 2014 | 20,952 | 8,836 | 19.53 | 7.45 | |||||||
| 2015 | 14,999 | 7,159 | 13.12 | 5.64 | |||||||
| 2016 | 31,775 | 10,700 | 22.91 | 7.09 | |||||||
| 2017 | 18,711 | 11,499 | 13.68 | 8.86 | |||||||
| 2016 | |||||||||||
| First quarter | 22,360 | 10,700 | 14.31 | 7.09 | |||||||
| Second quarter | 27,892 | 19,664 | 18.49 | 13.16 | |||||||
| Third quarter | 31,775 | 20,792 | 22.91 | 15.00 | |||||||
| Fourth quarter | 22,055 | 12,906 | 15.92 | 9.32 | |||||||
| 2017 | |||||||||||
| First quarter | 18,711 | 12,502 | 13.68 | 9.67 | |||||||
| Second quarter | 17,950 | 12,600 | 13.31 | 9.64 | |||||||
| Third quarter | 14,323 | 11,670 | 10.86 | 8.88 | |||||||
| Fourth quarter | 14,579 | 11,499 | 10.63 | 8.86 | |||||||
| September 2017 | 14,323 | 12,126 | 10.86 | 9.10 | |||||||
| October 2017 | 13,828 | 12,315 | 9.87 | 9.17 | |||||||
| November 2017 | 14,579 | 12,884 | 10.63 | 9.08 | |||||||
| December 2017 | 14,360 | 11,499 | 10.59 | 8.86 | |||||||
| January 2018 | 14,140 | 12,000 | 12.00 | 10.34 | |||||||
| February 2018 | 13,400 | 10,720 | 11.34 | 9.16 | |||||||
March 2018(2) | 11,560 | 10,635 | 9.94 | 8.88 | |||||||
Not applicable.
9C. MARKETS
NATURE OF TRADING MARKET
The principal trading markets for AngloGold Ashanti’s ordinary shares are the New York Stock Exchange, in the form of ADSs, under the symbol “AU” and the JSE Limited, in the form of ordinary shares, under the symbol “ANG”.
AngloGold Ashanti’s ordinary shares are also listed on the Ghana Stock Exchange, as ordinary shares under the symbol “AGA” and in the form of Ghanaian Depositary Shares or GhDSs (each representing one one-hundredth of an ordinary share) under the symbol “AADs”, and the Australian Securities Exchange, in the form of Chess Depositary Interests (each representing one-fifth of an ordinary share) under the symbol “AGG” and on the Ghana Stock Exchange, in the form of Ghanaian Depositary Shares or GhDSs (each representing one one-hundredth of an ordinary share) under the symbol “AADS”.
9D. SELLING SHAREHOLDERS
Not applicable.
9E. DILUTION
Not applicable.
9F. EXPENSES OF THE ISSUE
Not applicable.
220
ITEM 10: ADDITIONAL INFORMATION
10A.SHARE CAPITAL
10B.MEMORANDUM OF INCORPORATION
At the latest practicable date prior to the publication of this document) is set out below:
| Title of Class | Authorised | Issued | ||||
19 March 2018 | 31 December 2017 | |||||
| Ordinary shares at par value of R0.25 each | 600,000,000 | 410,738,159 | 410,054,615 | |||
| A redeemable preference shares at par value of R0.50 each | 2,000,000 | 2,000,000 | 2,000,000 | |||
| B redeemable preference shares at par value of R0.01 each | 5,000,000 | 778,896 | 778,896 | |||
| C redeemable preference shares at no par value | 30,000,000 | 0 | 0 | |||
| Period to | Description | Number of Shares | ||
31 December 2014 | 404,010,360 | |||
| Ordinary shares issued during | 2014 | AngloGold Share Incentive Scheme | 1,254,955 | |
31 December 2015 | 405,265,315 | |||
| Ordinary shares issued during | 2016 | AngloGold Share Incentive Scheme | 2,958,445 | |
31 December 2016 | 408,223,760 | |||
| Ordinary shares issued during | 2017 | AngloGold Share Incentive Scheme | 1,830,855 | |
31 December 2017 | 410,054,615 | |||
AngloGold Ashanti is incorporated under the laws of the Republic of South Africa and registered with the Companies and Intellectual Property Commission under registration number 1944/017354/06. The Companies Act has abolished the requirement for specific “object and purpose” provisions to be included in an MoIa memorandum of incorporation and although the new MoI is now silent on the matter, the company continues to carry on as its main business, gold exploration, the mining and production of gold, the manufacturing, marketing and selling of gold products and the development of markets for gold.
AngloGold Ashanti’s MoI is available for inspection as set out in “Item 10H: Documents on Display” and a summary of pertinent provisions, including rights of the holders of shares in AngloGold Ashanti, are set out below.
This summary does not contain all the information pertaining to the rights of holders of AngloGold Ashanti’s ordinary shares and is qualified in its entirety by reference to the laws of South Africa and AngloGold Ashanti’s governing corporate documents. As well as being governed by the provisions of the MoI, the rights of holders of AngloGold Ashanti’s ordinary shares are governed by the JSE Listings Requirements, the Companies Act and the Companies Regulations, 2011, promulgated under the Companies Act (Regulations), which include the Takeover Regulations. Further, the rights of holders of AngloGold Ashanti ADSs are governed by the Deposit Agreement between AngloGold Ashanti and The Bank of New York Mellon. See “Item 10C: Material Contracts-The Deposit Agreement”.
The Companies Act provides that shares will no longer have a par or nominal value and hence no new shares having a nominal or par value may be authorised. However, any shares which have a nominal or par value authorised prior to the1 May 2011 (the effective date of the Companies ActAct) continue to have that nominal or par value and can be issued as such for so long as there are par value shares in the company’s authorised share capital. Should the company wish, it may also elect to convert its authorised par value shares to shares of no par value, subject to the relevant process and approvals contemplated in the Companies Act.
The management and control of any business of AngloGold Ashanti is vested in the board of directors (board). The authority of the board to manage and direct the business and affairs of the company is not limited, restricted or qualified by the MoI.
Appointment and Retirement of Directors
The shareholders of the company have the power to elect the directors, and shareholders are also entitled to elect one or more alternate directors, in accordance with the provisions of the MoI.
The board of directors may appoint any person who satisfies the requirements for election as a director to fill any vacancy and serve as a director on a temporary basis until the vacancy is filled by election by shareholders entitled to exercise voting rights in such an election.
The MoI authorises the chairman of the board, subject to the written approval of the majority of the directors, to appoint any person as a director provided that such appointment is approved by shareholders at the next shareholders’ meeting or annual general meeting.
At every annual general meeting one-third of the directors will retire by rotation, or if their number is not a multiple of three, then the number nearest to but not less than one third. The directors so to retire at every annual general meeting will be those who have been the longest in office since their last election. Directors retiring by rotation are eligible for re-election. Directors who
221
voluntarily decide not to make themselves available for re-election may be counted towards the one-third of directors required to retire at the relevant annual general meeting.
The MoI contains no provision for directors to hold qualification shares. The MoI does not impose an age limit for the retirement of directors.
Remuneration
In accordance with the Companies Act, the MoI provides that the directors are entitled to such remuneration for their services as directors as AngloGold Ashanti’s shareholders may approve by special resolution in a general meeting or annual general meeting within the previous two years of the date of payment of such remuneration. If a director is employed in any other capacity, or holds an executive office or performs services that, in the opinion of the board, are outside the scope of the ordinary duties of a director, he or she may be paid such additional remuneration as a disinterested quorum of directors may reasonably determine.
Interests of Directors and Restriction on Voting
Although the interests of directors are not dealt with in the MoI, the provisions of the Companies Act in this regard are unalterable and will automatically apply, together with the applicable common law.law rules. Under the Companies Act, the procedures to deal with the personal financial interests of directors also apply to prescribed officers (i.e. persons who exercise general executive control over and management of the whole, or a significant portion, of the business and activities of the company or regularly participate to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company, irrespective of the office held or function performed by such persons) and any person who is a member of a committee of the board of the company, whether or not that person is also a member of the company’s board. The Companies Act provides that a director or such other person with a personal financial interest must disclose this to the board and cannot vote on or, after having made the disclosures to the meeting as prescribed by the Companies Act, remain present during the meeting when the matter in which he has interest is being discussed but will be counted as present for the purposes of a quorum.
Share Rights, Preferences and Restrictions
Allotment and Issue of Ordinary Shares
Subject to the JSE Listings Requirements, the Companies Act and/or with approval of shareholders in a general meeting, unissued ordinary shares must be offered to existing ordinary shareholders, pro rata to their shareholdings, unless they are issued for the acquisition of assets. The shareholders in a general meeting may authorise the AngloGold Ashanti board to issue any unissued ordinary shares.
Dividends, Rights and Distributions
The ordinary shares participate fully in all dividends, other distributions and entitlements as and when declared by AngloGold Ashanti in respect of fully paid ordinary shares. Under South African law, AngloGold Ashanti may declare and pay dividends, subject to the company satisfying the solvency and liquidity test as provided by the Companies Act and the board passing a resolution acknowledging that such test has been applied and has reasonably concluded that the company would satisfy such test immediately after completing the distribution. Dividends are payable to shareholders registered at a record date after the date of declaration of the dividend.
The holder of the B preference shares is entitled to the right to an annual dividend amounting to the lesser of five5 percent of the issue price of the B preference shares or an amount equivalent to the balance of the after-taxafter tax profits arising from income derived from mining the Moab Lease Area (which is part of the Vaal River operations in South Africa) as determined by the directors in each financial year. ThisThe annual dividend isshall be a first charge on any profit available for distribution from the Moab Lease Area.Area but shall not be payable from any other profits of the Company.
The holder of the C preference shares is entitled to the right to an annual dividend amounting to the lesser of 5 percent of the issue price of the C preference shares or an amount equivalent to the balance of the after tax profits arising from income derived from mining the Moab Lease Area as determined by the directors in each financial year. The annual dividend isshall be a first charge on any profit available for distribution from the Moab Lease Area ranking after and following payment of any annual dividend payable to the holder of the B preference shares, but shall not be payable from any other profits of AngloGold Ashanti’s other profits.the Company.
222
The holder of the A preference shares is entitled to an annual dividend equivalent to the balance of the after-tax profits from income derived from mining the Moab Lease Area as determined by AngloGold Ashanti’s directors in each financial year, only once the annual dividend on the B preference shares hasand the C preference shares have been paid in full.
Although not stated in the MoI, but subject to the JSE Listings Requirements and the Companies Act, any dividend may be paid and satisfied, either wholly or in part, by the distribution of specific assets, or in paid-up securities of AngloGold Ashanti or of any other company, or in cash, or in any one or more of such ways as the directors may at the time of declaring the dividend determine and direct.
All dividends remaining unclaimed for a period of not less than three years from the date on which they became payable, may, by a resolution of the directors, become forfeited for the benefit of the company.
Voting Rights
Each ordinary share confers the right to vote at all general meetings. Each holder present in person or by proxy or, in the case of a corporate entity, represented, has one vote on a show of hands. If a poll is held, holders present or any duly appointed proxy will have one vote for each ordinary share held. A holder of ordinary shares is entitled to appoint a proxy to attend, speak and vote at any meeting on his or her behalf and the proxy need not be a shareholder. Holders of ADSs are not entitled to vote in person at meetings, but may vote by way of proxy through The Bank of New York Mellon as the ADS issuer. Holders of CDIsAustralian Chess Depositary Interests (CDIs) and GhDSsGhanaian Depositary Shares (GhDSs) are not entitled to vote in person or by proxy at meetings, but may vote by instructing Chess Depository Nominees and NTHC Limited as depositary, respectively, how to vote their shares.
There are no limitations on the right of non-South African registered shareholders to hold or exercise voting rights attaching to any of the ordinary shares.
The A redeemable preference shares have similar voting rights to those of ordinary shares.The B and C redeemable preference shares have voting rights only in the event that a dividend on this class of share has not been paid and remains unpaid for six months or more, or in connection with resolutions directly affecting these preference shares or in limited circumstances affecting AngloGold Ashanti as a whole, such as disposal of substantially all of the company’s assets, winding up AngloGold Ashanti or reducing the company’s share capital.
At any meeting of AngloGold Ashanti at which the holders of the ordinary shares, A redeemable preference shares, B redeemable preference shares and C redeemable preference shares are present and entitled to vote on a poll, each holder of the A redeemable preference shares shall be entitled to 50 votes for every A redeemable preference share held, each holder of the ordinary shares is entitled to 50 votes for every ordinary share held and each holder of the B redeemable preference shares and the C redeemable preference shares is entitled to one vote for every B redeemable preference share and C redeemable preference share held respectively.
The MoI specifies that the rights relating to any class of shares may be modified or abrogated with the sanction of a resolution passed as if it were a special resolution of the holders of shares in that class at a separate general meeting. The MoI also specifies that the holders of the A, B and C preference shares may provide written consents to the modification of their rights.
Increase and Reduction of Capital
The company is authorised to issue the shares specified in the MoI and all such shares are required to be issued as fully paid up in accordance with the applicable approval and/or other requirements of the Companies Act and the JSE Listings Requirements.
The directors are authorised, subject to any requirements of the JSE Listings Requirements, the Companies Act and the MoI, to increase or decrease the number of authorised shares of any class of shares, reclassify any shares that have been authorised but not issued, classify any unclassified shares that have been authorised but not issued, and determine the preferences, rights, limitations or other terms of any class of authorised shares or amend any preferences, rights, limitations or other terms as determined. However, such capital amendments require an amendment to the MoI, the Companies Act and the JSE Listings Requirements currently does not allow the MoI to be amended to give effect to such capital amendments without the approval of ordinary shareholders by special resolution.
Rights Upon Liquidation
In the event of the winding up of AngloGold Ashanti:
•The A preference shares shall confer the right, on a winding-up of the company, in priority to any payment in respect of the Ordinary Sharesordinary shares in the capital of the company then issued, but after any payment in respect of the B preference shares and the C preference shares in the capital of the company then issued, to receive only so much of the net proceeds from the disposal of the assets relating to the Moab Lease Area as is then available for distribution;
•The B preference shares shall confer the right, on a winding-up of the company in priority to any payment in respect of the Ordinary Shares,ordinary shares, the A preference shares and the C preference shares then in issue, to receive only so much of the net
223
proceeds from the disposal of the assets relating to the Moab Lease Area as is available for distribution but not exceeding a return per B preference share of the capital paid-up thereon and any share premium paid on the issue of the B preference shares outstanding at that time;
•The C preference shares shall confer the right, on a winding-up of the company, ranking after and following payment of the holders of the B preference shares, but in priority to any payment in respect of the Ordinary Sharesordinary shares and the A preference shares in the capital of the company then issued, to receive only so much of the net proceeds from the disposal of the assets relating to the Moab Lease Area as is available for distribution but not exceeding a return per C preference share of the capital paid-up on the issue of the C preference shares outstanding at that time;
•The A, B and C preference shares shall not be entitled to any participation, on a winding-up, in any of the surplus funds of the company in any other manner arising; and
•the ordinary shares confer the right to participate equally in any surplus arising from the liquidation of all other assets of AngloGold Ashanti.
Redemption Provisions
The A redeemable preference shares may be redeemed for their nominal value, plus a premium per share of an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area, after redemption in full of the B preference shares and the C preference shares, and payment of the nominal value of the A preference shares, divided by 2,000,000.
The B redeemable preference shares may be redeemed for their nominal value, plus a premium of upan amount equal to R249.99 per share,175,096,390 divided by that number of B preference shares in issue, but limited to an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area after payment of the nominal value of of the B preference shares.
The C redeemable preference shares may be redeemed for their aggregate issue price of the said C preference shares, but shall be limited to an amount equal to the net proceeds available from the disposal of the assets relating to the Moab Lease Area and only after redemption in full of the B preference shares.
Shareholders’ meetings
The directors may convene meetings of AngloGold Ashanti shareholders. Subject to the provisions of the Companies Act, the shareholders may requisition for the convening of a meeting.
Notice of each AngloGold Ashanti annual general meeting and general meeting of AngloGold Ashanti shareholders must be delivered at least 15 business days before that shareholders’ meeting is to begin. In accordance with the Companies Act, business days are calculated by excluding the first day, including the last day and excluding Saturdays, Sundays and any public holiday in the Republic of South Africa. In terms of the MoI, all shareholders are entitled to attend shareholders’ meetings.meetings at which they are entitled to vote.
In the case of a class meeting of the A, B or BC preference shares, the sole holder of such shares shall constitute a quorum. Save as aforesaid, the quorum of a shareholders’ meeting to begin is sufficient persons present, in person or by proxy, at the meeting to exercise, in aggregate, at least 25 percent of all of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the meeting and a quorum must remain present for the continuation of that shareholders meeting, provided that at least three shareholders must be present at the meeting. Such quorum requirement also applies for the consideration of any matter to be decided at the meeting. If the meeting is not quorate within 30 minutes after the appointed time for the meeting to begin (or such longer or shorter period as the chairperson may determine), it will be postponed, without motion, vote or further notice, for 1 week and the shareholders present, in person or by proxy, at the postponed meeting will constitute a quorum. For an ordinary resolution to be approved by shareholders, it must be supported by more than 50 percent of the voting rights exercised on the resolution. For a special resolution to be approved by shareholders, it must be supported by at least 75 percent of the voting rights exercised on the resolution.
Disclosure of Interest in Shares
Under South African law, a person must notify AngloGold Ashanti within three business days after that person (i) acquires a beneficial interest in sufficient securities of a class issued by AngloGold Ashanti such that, as a result of the acquisition, the person holds a beneficial interest in securities amounting to five percent, 10ten percent, 15 percent or any further whole multiple of five percent of the issued securities of that class or (ii) disposes of any beneficial interest in sufficient securities of a class issued by AngloGold Ashanti such that the result of the disposition the person no longer holds a beneficial interest in securities amounting to a particular multiple of five percent of issued securities of that class. When AngloGold Ashanti has received the notice referred to above it must file a copy with the Takeover Regulation Panel and report the information to holders of the relevant class of securities unless the notice concerned a disposition of less than one percent of the class of securities.
If the securities of AngloGold Ashanti are registered in the name of a person who is not the holder of the beneficial interest in all of the securities in AngloGold Ashanti held by that person, that registered holder of the securities must disclose the identity of the
224
person on whose behalf that security is held and the identity of each person with a beneficial interest in securities so held, the number and the class of securities held for each such person with a beneficial interest and the extent of each such beneficial interest. This information must be disclosed in writing to the company within five business days after the end of every month during which a change has occurred in the information or more promptly or frequently to the extent so provided by the requirements of a Central Securities Depository. A company that knows or has reasonable cause to believe that any of its securities are held by one person for the beneficial interest of another may by notice in writing require either of those persons to confirm or deny that fact, provide particulars of the extent of the beneficial interest held during the three years preceding the date of the notice and disclose the identity of each person with a beneficial interest in the securities held by that person, which information must be provided within 10 business days of the receipt of the notice.
AngloGold Ashanti is obligated to establish and maintain a register of the disclosures described above and to publish in its annual financial statements a list of the persons who hold beneficial interests equal to or in excess of five percent of the total number of ordinary shares issued by AngloGold Ashanti together with the extent of those beneficial interests.
Rights of Minority Shareholders
Majority shareholders of South African companies have no fiduciary obligations under South African common law to minority shareholders. However, under the Companies Act, a shareholder or director may, under certain circumstances, seek relief from the court if he has been unfairly prejudiced by any act or omission of the company or a related person, by the conduct of the business
of the company or a related person in a particular manner, the exercise of the powers of the directors of the company or a related person in a particular manner. There may also be personal and derivative actions available to a shareholder of a company.
Pursuant to the Companies Act, a shareholder may petition a South African court for relief from the actions or omissions or, business conduct of the company or the actions of the company’s directors or officers that is oppressive or unfairly prejudicial to, or unfairly disregards the interest of the shareholder. In addition, a shareholder who voted against a resolution to amend the company’s MoI, or to approve a fundamental transaction, (and complied with other requirements set out in the Companies Act) may exercise its appraisal right to demand that the company pay to it the fair value for all the shares of the company held by that shareholder.
Description of ADSs
The Bank of New York Mellon issues AngloGold Ashanti’s American Depositary Shares, or ADSs. Please see “Item 10C: Material Contracts”Contracts—Description of AngloGold Ashanti ADSs”.
225
10C.MATERIAL CONTRACTS
Multi-currency Revolving Credit FacilitiesFacility
General
On 17 July 2014,23 October 2018, AngloGold Ashanti Holdings plc (AGAH) and AngloGold Ashanti USA Incorporated,Australia Limited, as borrowers, entered into a five-year unsecured multi-currency syndicated revolving credit agreementfacility of $1.4 billion (the US$ Revolving Credit Agreement)$1.4 billion multi-currency RCF) with The Bank of Nova Scotia, as facility agent, and certain financial institutions party thereto, as lenders. The US$ Revolving Credit Agreement provides forloan consists of (i) a $1.0 billion revolving creditUS dollar based facility (the US$ Revolving Credit Facility) available for drawing in US dollars.(base currency) and (ii) an Australian dollar based facility capped at A$500 million which will be used to fund the working capital and development costs associated with the group’s mining operations within Australia (without eroding the group’s headroom under its other facilities and exposing the group to foreign exchange gains/losses each quarter). As of 19 March 2018, we have drawn $65 million under2021, the US$ Revolving Credit Facility.$1.4 billion multi-currency RCF was undrawn.
The $1.4 billion multi-currency RCF is guaranteed by AGAH and AngloGold Ashanti Australia Limited entered into a credit agreement (the A$ Revolving Credit Agreement), as borrower with Commonwealth Bank of Australia, as facility agent, and certain financial institutions party thereto as lenders. The A$ Revolving Credit Agreement provides for a A$0.5 billion revolving credit facility (the A$ Revolving Credit Facility) available for drawing in Australian dollars. As of 19 March 2018, we have drawn A$195 million under the A$ Revolving Credit Facility.
Security
Amount and repayment of borrowings
Loans under the US$ Revolving Credit Facility$1.4 billion multi-currency RCF must be for a minimum of $10 million, (or forif the balance ofcurrency selected is the undrawn total commitments at the time of the drawing)base currency (US dollar), and no more than 14 loans may be outstanding at any time. Each loan must be repaid on the last day of the loan’s interest period, which can be a period of one, two, three or six months or any other period agreed by AngloGold Ashanti Holdings plc, in its capacity as obligors’ agent, and the lenders. All loans must be repaid in full on the final maturity date. The final maturity date is17 July 2019.
Interest rates and fees
The annual interest rate on loans drawn under the US$ Revolving Credit Facility$1.4 billion multi-currency RCF is calculated based on LIBOR, plus aan initial margin of 1.45 percent per annum that varies between 0.95 percent and 2.202.15 percent per annum depending on the long-term debt rating of AngloGold Ashanti Limited,AGAH, and in relation to any Loan in Australian Dollars, BBSY, and certain mandatory costs. The applicable margin is subject to a ratings grid. In this regard, the interest margin will reduce should the group’s credit rating improve from its current BB+/Baa3 status and should increase if its credit rating worsens. Interest on loans is payable on the last day of the loan’s interest period and, if the interest period exceeds six months, on the dates falling at six monthsix-monthly intervals after the day the loan was made.
The borrowers under the US$ Revolving Credit Facility$1.4 billion multi-currency RCF are required to pay a commitment fee in the base currency equal to 35 percent of the then applicable margin per annum on the undrawn and uncancelled amount of each lender’s commitment during the commitment period. The borrowers are also required to pay a utilisation fee of 0.150.10 percent per annum (if the aggregate outstanding loans are less than one third of the total commitments then in effect), 0.300.20 percent per annum (if the aggregate outstanding loans are equal to or greater than one third but less than two thirds of the total commitments then in effect) or 0.450.40 percent per annum (if the aggregate outstanding loans are equal to or greater than two thirds of the total commitments then in effect).
Financial covenant applicable to all Revolving Credit Facilities (RCF)
The Revolving Credit Agreements include$1.4 billion multi-currency RCF includes a financial maintenance covenant which requires that the ratio of Total Net Financial Indebtedness to EBITDA (as such terms are defined in the Revolving Credit Agreements)revolving credit agreement) does not at any time exceed 3.50 to 1.00, with the proviso that this ratio may exceed 3.50 to 1.00 once during the life of the Revolving Credit Agreement,revolving credit agreement, for one six-month period subject to certain criteria. Refer Itemto “Item 18: note 35 “CapitalFinancial Statements-Note 36-Capital Management” for the formulae used in terms of the RCF’srevolving credit agreement to test compliance with the covenants.
Change of control
If a lender so requires, the commitment of such lender under a Revolving Credit Agreementthe $1.4 billion multi-currency RCF will be cancelled and the participation of such lender in all outstanding loans, together with accrued interest and all other amounts accrued, will become immediately due and payable in case any person or group of persons acting in concert becomes (directly or indirectly) the beneficial owner of more than 50 percent of the issued share capital of AngloGold Ashanti Limited.
226
Undertakings applicable to all Revolving Credit Agreements
The Revolving Credit Agreements contain$1.4 billion multi-currency RCF contains a negative pledge covenants,covenant, including restrictions on the granting of security, a change of business of AngloGold Ashanti Limited and its subsidiaries, acquisitions or participations in joint ventures and mergers and disposals.
The Revolving Credit Agreements$1.4 billion multi-currency RCF also contain,contains, among others,other things, the following affirmative covenants: mandatory periodic reporting of financial and other information, notice upon the occurrence of events of default and certain other events, compliance with environmental laws and other obligations requiring each of AngloGold Ashanti LimitedAGAH and its subsidiaries to maintain its corporate existence and qualifications to conduct its business as currently conducted in all applicable jurisdictions and to maintain insurance coverage.
The covenants are subject to exceptions and materiality thresholds.
Events of default applicable to all Revolving Credit Agreements
The Revolving Credit Agreements contain$1.4 billion multi-currency RCF contains events of default including failure to make payment of amounts due, breach of obligations under the loan documents, defaults under other agreements evidencing indebtedness, certain bankruptcy events and a cessation of business, failure of any of the borrowers to be a wholly-owned subsidiary of AngloGold Ashanti LimitedAGAH and the occurrence of a material adverse change in the business and financial condition of the borrowers and guarantors under the Revolving Credit Agreements,revolving credit agreement, or AngloGold Ashanti and its subsidiaries as a whole, or in the ability of the borrowers and guarantors to perform their payment obligations under the loan documents. The occurrence of an event of default could result in the immediate and automatic cancellation of all commitments and the acceleration of all payment obligations under the Revolving Credit Agreementsrevolving credit agreement and the other loan documents.
The above description is only a summary of certain provisions of the Revolving Credit Agreementsrevolving credit agreement and is qualified in its entirety by reference to the provisions of the Revolving Credit Agreements,revolving credit agreement, a copy of which is attached hereto as Exhibit 19.4.4.1 and is incorporated herein by reference.
Bridge Facility
On 28 April 2020, AngloGold Ashanti Holdings plc (AGAH), as borrower, entered into a US$1.0 billion unsecured bridge facility agreement with a syndicate of lenders, guaranteed by AngloGold Ashanti Australia Limited. The bridge facility was for a term of 364 days which could be extended for a further six months with consent of the lenders. Amounts outstanding under the bridge facility bore interest at LIBOR plus a margin that increased over time. The bridge facility contained certain restrictive and affirmative covenants, events of default as well as a financial maintenance covenant. The lenders under the bridge facility were required to fund only if our $1.4 billion multi-currency RCF was drawn by at least $1.39 billion. The bridge facility agreement also contained a mandatory prepayment and cancellation clause. In particular, commitments under the bridge facility were automatically cancelled upon, among other matters, the incurrence of certain indebtedness (including the offering of the 2020 Notes as described below) and the consummation of certain disposals (including, for example, the disposal of our South African operations). The bridge facility, which remained undrawn, was cancelled on 1 October 2020.
The above description is only a summary of certain provisions of the bridge facility agreement and is qualified in its entirety by reference to the provisions of the cancelled bridge facility agreement.
Notes
Each of the series of notes described below were issued under the indenture, dated as of 28 April 2010, among AngloGold Ashanti Holdings plc (AGAH), as issuer, AngloGold Ashanti Limited, as guarantor, and The Bank of New York Mellon, as trustee (the Indenture). The below descriptions are only a summary of certain provisions of those series of notes and are qualified in their entirety by reference to the provisions of the Indenture and such relevant series of notes, a copy of each is attached hereto as Exhibit 19.4.4Exhibits 19.2.1, 19.2.2, 19.2.3 and 19.2.4 and is incorporated herein by reference.
2020 Notes
On 30 July 2013, AngloGold Ashanti Holdings plc (AGAH)1 October 2020, AGAH issued $1,250$700 million 8.5003.750 percent Notes due 20202030 (the 20132020 Notes). The interest on the 20132020 Notes wasis payable semi annuallysemi-annually on 15 January1 April and 15 July1 October of each year, commencing on 15 January 2014. 1 April 2021. AGAH may on any one or more occasions redeem all or part of the 2020 Notes, at a redemption price equal to the greater of (1) 100 percent of the principal amount of the 2020 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 2020 Notes (excluding any portion of such payments of interest accrued or unpaid as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate, plus 50 basis points, plus accrued and unpaid interest, if any, to the date of redemption. AGAH has agreed to pay certain additional amounts in respect of any withholdings or deductions for certain types of taxes in certain jurisdictions on payments to holders of the 2020 Notes. The 2020 Notes are unsecured and unsubordinated and are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
AGAH has agreed to observe certain covenants with respect to the 2020 Notes restricting, subject to certain limitations, the ability of AngloGold Ashanti Limited and AGAH to amalgamate, reconstruct, consolidate or merge with another company or other
227
legal entity, and the ability of AngloGold Ashanti Limited and its restricted subsidiaries to pledge their assets to secure certain borrowings, create or incur liens on certain of their property or to engage in sale and leaseback transactions. In case of a change of control of the guarantor and a downgrade, within a specified period, of the 2020 Notes by three rating agencies, holders of the 2020 Notes have the right to require the issuer to repurchase all or any part of their 2020 Notes in cash for a value equal to 101 percent of the aggregate principal amount of 2020 Notes repurchased, plus accrued and unpaid interest, if any, on the 2020 Notes repurchased to the date of repurchase.
The offering of the 20132020 Notes was registered under the Securities Act and the 2013Act. The 2020 Notes were listed on the New York Stock Exchange. On 24 August 2015, AGAH offered to buy back up to $810 million in aggregate principal amount of the outstanding 2013 Notes. The offer was partially accepted and $779 million was settled in September 2015. The balance of the 2013 Notes was redeemed on 1 August 2016.
2012 Notes
On 30 July 2012, AGAH issued $750 million 5.125 percent Notes due 2022 (the 2012 Notes). The interest on the 2012 Notes is payable semi-annually on 1 February and 1 August of each year, commencing on 1 February, 2013. AGAH may on any one or more occasions redeem all or part of the 2012 Notes, at a redemption price equal to the greater of (1) 100 percent of the principal amount of the 2012 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 2012 Notes (excluding any portion of such payments of interest accrued or unpaid as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate, plus 50 basis points, plus accrued and unpaid interest, if any, to the date of redemption. AGAH has agreed to pay certain additional amounts in respect of any withholdings or deductions for certain types of taxes in certain jurisdictions on payments to holders of the 2012 Notes. The 2012 Notes are unsecured and unsubordinated and are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
AGAH has agreed to observe certain covenants with respect to the 2012 Notes restricting, subject to certain limitations, the ability of AngloGold Ashanti Limited and AGAH to amalgamate, reconstruct, consolidate or merge with another company or other legal entity, and the ability of AngloGold Ashanti Limited and its restricted subsidiaries to pledge their assets to secure certain borrowings, create or incur liens on certain of their property or to engage in sale and leaseback transactions. In case of a change of control of the guarantor and a downgrade, within a specified period, of the 2012 Notes below an investment grade rating by two rating agencies, holders of the 2012 Notes have the right to require the issuer to repurchase all or any part of their 2012 Notes in cash for a value equal to 101 percent of the aggregate principal amount of 2012 Notes repurchased, plus accrued and unpaid interest, if any, on the 2012 Notes repurchased to the date of purchase.
The offering of the 2012 Notes was registered under the Securities Act. The 2012 Notes were listed on the New York Stock Exchange.
2010 Notes
On 28 April 2010, AGAH issued $700 million 5.375 percent Notes due 2020 and $300 million 6.500 percent Notes due 2040 (together, the 2010 Notes). The interest on the 2010 Notes is payable semi-annually on 15 April and 15 October of each year, commencing on 15 October 2010. AGAH may on any one or more occasions redeem all or part of the 2010 Notes, at a redemption price equal to the greater of (1) 100 percent of the principal amount of the 2010 Notes to be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the 2010 Notes (excluding any portion of such payments of interest accrued or unpaid as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate, plus 25 basis points with respect to the 2010 Notes maturing in 2020 and 30 basis points with respect to the 2010 Notes maturing in 2040, plus accrued and unpaid interest, if any, to the date of redemption. AGAH has agreed to pay certain additional amounts in respect of any withholdings or deductions for certain types of taxes in certain jurisdictions on payments to holders of the 2010 Notes. The 2010 Notes are unsecured and unsubordinated and are fully and unconditionally guaranteed by AngloGold Ashanti Limited.
AGAH has agreed to observe certain covenants with respect to the 2010 Notes restricting, subject to certain limitations, the ability of AngloGold Ashanti Limited and AGAH to amalgamate, reconstruct, consolidate or merge with another company or other legal
entity, and the ability of AngloGold Ashanti Limited and its restricted subsidiaries to pledge their assets to secure certain borrowings, create or incur liens on certain of their property or to engage in sale and leaseback transactions. In case of a change of control of the guarantor and a downgrade, within a specified period, of a series of 2010 Notes below an investment grade rating by two rating agencies, holders of the 2010 Notes have the right to require the issuer to repurchase all or any part of their 2010 Notes in cash for a value equal to 101 percent of the aggregate principal amount of 2010 Notes repurchased, plus accrued and unpaid interest, if any, on the 2010 Notes repurchased to the date of purchase.
The offering of the 2010 Notes was registered under the Securities Act. The 2010 Notes were listed on the New York Stock Exchange.
The $700 million 5.375 percent Notes due 2020 were repaid at maturity on 15 April 2020 and are no longer outstanding.
For further information, see “Note 25:26: Borrowings” to our Annual Financial Statements included in Item 18 of this Annual Report, “Item 5B.:5B: Liquidity and Capital Resources” and “Item 19: Exhibits to Form 20-F”.
228
Description of AngloGold Ashanti ADSs
The Bank of New York Mellon issues AngloGold Ashanti’s American Depositary Shares, or ADSs. OneEach ADS represents the ownership interest of one ordinary share of AngloGold Ashanti.
The Deposit Agreement
This section provides a summary description of AngloGold Ashanti’s ADSs.
AngloGold Ashanti has entered into an Amended and Restated Deposit Agreement dated 3 June 2008 with The Bank of New York Mellon as depositary and the owners and beneficial owners of American Depositary Receipts (Deposit Agreement).
The following is a summary of the material provisions of the Deposit Agreement. For more complete information, read the entire Deposit Agreement and the Form of American Depositary Receipt, which AngloGold Ashanti has filed with the SEC as an exhibit to AngloGold Ashanti’s registration statementstatements on Form F‑6/A (FileF-6 (Registration No. 333‑133049)333-133049 and No. 333-159248) on 27 May 2008.2008 and 14 May 2009, respectively. A copy thereof is also attached hereto as Exhibit 19.2.6 and is incorporated herein by reference. See “Item 10.H.:10H: Documents Onon Display”. Copies of the Deposit Agreement are also available for inspection at the Corporate Trust Office of The Bank of New York Mellon currently located at 101 Barclay240 Greenwich Street, New York, New York 10286.
Description of the ADSs
The Bank of New York Mellon, as depositary, will registerregisters and deliverdelivers ADSs. Each ADS will representrepresents one ordinary share (or a right to receive one share) deposited with The Standard Bank of South Africa Limited, Société Générale South Africa Limited, FirstRand Bank Limited Nationalor HSBC Bank Australia Bank Limited of Australia and New Zealand Banking Group Limited, each as a custodian for The Bank of New York Mellon, and all of which are referred to collectively as “the Custodian”. Each ADS will also representrepresents any other securities, cash or other property which may be held by The Bank of New York Mellon. The Bank of New York Mellon’s Corporate Trust Office at which the ADSs will beare administered is located at 101 Barclay240 Greenwich Street, New York, New York 10286. The Bank of New York Mellon’s principal executive office is also located at One Wall240 Greenwich Street, New York, New York 10286.
ADSs may be held either (A) directly (i) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs, registered in the holder’s name, or (ii) by having ADSs registered in a holder’s name in the Direct Registration System, or (B) indirectly by holding a security entitlement in ADSs through a broker or other financial institution. If ADSs are held directly, such holders are ADS holders. This description applies to AngloGold Ashanti’s ADS holders. If ADSs are held indirectly, such holders must rely on the procedures of their broker or other financial institution to assert the rights of ADS registered holders described in this section. Such holders should consult with their broker or financial institution to find out what those procedures are.
The Direct Registration System, or DRS, is a system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership will be evidenced by periodic statements sent by the depositary to the registered holders of uncertificated ADSs.
AngloGold Ashanti willdoes not treat ADS holders as its shareholders and ADS holders do not have shareholder rights. South African law governs shareholder rights. The Bank of New York Mellon is the holder of the shares underlying the ADSs. Registered holders of ADSs have ADS holder rights. The Deposit Agreement sets out ADS holder rights as well as the rights and obligations of The Bank of New York Mellon. New York law governs the Deposit Agreement and the ADSs.
Dividends and Other Distributions
The Bank of New York Mellon has agreed to pay to holders of ADSs the cash dividends or other distributions it or a custodianCustodian receives on AngloGold Ashanti ordinary shares or other deposited securities after deducting any fees and expenses and any applicable withholding taxes. Holders of ADSs will receive these distributions in proportion to the number of AngloGold Ashanti’s ordinary shares that their ADSs represent.
Cash
The Bank of New York Mellon will convert any cash dividend or other cash distribution (in South African rands) that AngloGold Ashanti pays on ordinary shares into US dollars (unless AngloGold Ashanti pays such dividend or cash distribution in US dollars) and distribute to registered holders of ADSs. If that is no longer possible or if any approval from any government is needed and cannot be obtained, The Bank of New York Mellon may distribute non-US currency only to those ADS holders to whom it is possible to make this type of distribution.
The Bank of New York Mellon may hold the non-US currency it cannot convert for the account of holders of ADSs who for one reason or the other have not been paid. It will not invest the non-US currency, and it will not be liable for interest on such amounts. Before making a distribution, any withholding taxes that must be paid will be deducted. See “Payment of Taxes” below. The Bank of New York Mellon will distribute only whole US dollars and cents and will round fractional cents to the nearest whole
229
cent. If the exchange rates fluctuate during a time when The Bank of New York Mellon cannot convert the non-US currency, holders of ADSs may lose some or all of the value of the distribution.
Ordinary Shares
The Bank of New York Mellon may distribute to holders of ADSs additional ADSs representing ordinary shares that AngloGold Ashanti distributes as a dividend or free distribution, if AngloGold Ashanti provides such distributionit promptly with satisfactory evidence that it is legal to do so. If The Bank of New York Mellon does not distribute additional ADSs, the outstanding ADSs will also represent the newly distributed AngloGold Ashanti ordinary shares. The Bank of New York Mellon will only distribute whole ADSs. It will sell AngloGold Ashanti ordinary shares that would require it to deliver a fraction of an ADS and distribute the net proceeds in the same way as it distributes cash. The Bank of New York Mellon may sell a portion of the distributed shares sufficient to pay its fees and expenses in connection with that distribution.
Rights to Subscribe for Additional Ordinary Shares
If AngloGold Ashanti offers holders of its ordinary shares any rights to subscribe for additional AngloGold Ashanti ordinary shares or any other rights, The Bank of New York Mellon, after consultation with AngloGold Ashanti, may make these rights available to holders of ADSs or sell the rights and distribute the proceeds in the same way as it distributes cash. If The Bank of New York Mellon cannot do either of these things for any reason, it may allow these rights to lapse. In that case, holders of ADSs will receive no value for them.
If The Bank of New York Mellon makes these types of subscription rights available to holders of ADSs,ADS, upon instruction from holders of ADSs, it will exercise the rights and purchase AngloGold Ashanti’s ordinary shares on their behalf. The Bank of New York Mellon will then deposit the AngloGold Ashanti ordinary shares and deliver ADSs to the holders of ADSs. It will only exercise these rights if holders of ADSs pay it the exercise price and any other charges the rights require them to pay.
US securities laws may restrict the sale, deposit, cancellation and transfer of the ADSs issued after the exercise of rights. For example, holders of ADSs may not be able to trade the ADSs freely in the United States. In this case, The Bank of New York Mellon may deliver ADSs which are "restricted securities" within the meaning of Rule 144 which will have the same provisions as the ADSs described here, except for the changes needed to put the restrictions in place.
Other Distributions
The Bank of New York Mellon will send to holders of ADSs any other distributions that AngloGold Ashanti makes on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, The Bank of New York Mellon may decide to sell what AngloGold Ashanti distributes, and then distribute the net proceeds in the same way as it distributes cash, or it may decide to hold what AngloGold Ashanti distributes, in which case the outstanding ADSs will also represent the newly distributed property. However, The Bank of New York Mellon is not required to distribute any securities (other than ADSs) to ADS holders unless it receives satisfactory evidence from AngloGold Ashanti that it is legal to make that distribution. The Bank of New York Mellon may sell a portion of the distributed securities or property sufficient to pay its fees and expenses in connection with that distribution.
The Bank of New York Mellon is not responsible if, based on available information, it decides that it is unlawful or impractical to make a distribution available to any ADS holders. AngloGold Ashanti has no obligation to register ADSs, AngloGold Ashanti ordinary shares, rights or other securities under the US Securities Act of 1933. AngloGold Ashanti also has no obligation to take any other action to permit the distribution of ADSs, AngloGold Ashanti ordinary shares, or any other rights to ADS holders. This means that the holders of ADSs may not receive the distribution AngloGold Ashanti makes on its ordinary shares or any value for them if it is illegal or impracticalimpracticable for AngloGold Ashanti to make them available to the holders of ADSs.
Deposit, Withdrawal and Cancellation
The Bank of New York Mellon will deliver ADSs if a holder of AngloGold Ashanti’s ordinary shares or theirits broker deposits AngloGold Ashanti’s ordinary shares or evidence of rights to receive ordinary shares with the Custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will register the appropriate number of ADSs in the names such holder of AngloGold Ashanti ordinary shares requests and will deliver the ADSs at its Corporate Trust officeOffice to the persons such holders request.
Holders of ADSs may turn in their ADSs at The Bank of New York Mellon’s Corporate Trust Office. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, The Bank of New York Mellon will deliver (1) the underlying ordinary shares to an account designated by the relevant holder of ADSs and (2) any other deposited securities underlying the ADSs at the office of the Custodian, or, at the request, risk and expense of ADS holders, The Bank of New York Mellon will deliver the deposited securities at its Corporate Trust Office.
230
Interchange Between Certificated ADSs and Uncertificated ADSs
ADS registered holders may surrender their ADS to The Bank of New York Mellon for the purpose of exchanging such ADS for uncertificated ADSs. The Bank of New York Mellon will cancel that ADS and will send to the ADS registered holder a statement confirming that the ADS registered holder is the registered holder of uncertificated ADSs. Alternatively, upon receipt by The Bank of New York Mellon of a proper instruction from a registered holder of uncertificated ADSs requesting the exchange of uncertificated ADSs for certificated ADSs, The Bank of New York Mellon will execute and deliver to the ADS registered holder an ADS evidencing those ADSs.
Voting Rights
ADS registered holders may instruct The Bank of New York Mellon to vote the number of deposited shares their ADSs represent. The Bank of New York Mellon will notify ADS registered holders of shareholders’ meetings and arrange to deliver AngloGold Ashanti’s voting materials to them if AngloGold Ashanti asks it to. Those materials will describe the matters to be voted on and explain how ADS registered holders may instruct The Bank of New York Mellon how to vote. For instructions to be valid, they must reach The Bank of New York Mellon by a date set by The Bank of New York Mellon.
Otherwise, ADS registered holders will not be able to exercise their right to vote unless they withdraw the shares. However, ADS registered holders may not know about the meeting sufficiently in advance to withdraw the shares.
The Bank of New York Mellon will try, as far as practical,practicable, to vote or to have its agents vote the ordinary shares or other deposited securities as holders of ADSs instruct, but this is subject to South African law, the provisions of AngloGold Ashanti’s MoI and of the deposited securities and any applicable rule of the JSE. The Bank of New York Mellon will only vote or attempt to vote as such holders of ADSs instruct.
AngloGold Ashanti cannot assure the holders of ADSs that they will receive the voting materials in time for them to instruct The Bank of New York Mellon to vote their ordinary shares. In addition, The Bank of New York Mellon and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. This means that holders of ADSs may not be able to exercise their right to vote and there may be nothing they can do if their ordinary shares are not voted as they requested.
Fees and expenses
Expenses
| ADS holders must pay: | For: | ||||
$5.00 (or less) per 100 ADSs | Each issuance of an ADS, including as a result of a distribution of AngloGold Ashanti ordinary shares or rights or other property Each cancellation of an ADS, including if the Deposit Agreement terminates | ||||
$0.02 (or less) per ADS | Any cash payment | ||||
| Registration or transfer fees | Transfer and registration of AngloGold Ashanti ordinary shares on the AngloGold Ashanti share register to or from the name of The Bank of New York Mellon or its agent when AngloGold Ashanti ordinary shares are deposited or withdrawn | ||||
$0.02 (or less) per ADS per year | Depositary services | ||||
| Expenses of The Bank of New York Mellon | Conversion of non-US currency to US dollars Cable, telex and facsimile transmission expenses Servicing the deposited securities | ||||
Taxes and other governmental charges that The Bank of New York Mellon or any | As necessary | ||||
A fee equivalent to the fee that would have been payable if the securities distributed had been ordinary shares deposited for issuance of ADSs | Distribution of securities distributed to holders of deposited securities that are distributed by The Bank of New York Mellon to ADS holders | ||||
231
Payment of Taxes
Holders of ADSs will be responsible for any taxes or other governmental charges payable on their ADSs or on the deposited securities underlying their ADSs. The Bank of New York Mellon may refuse to transfer their ADSs or allow them to withdraw the deposited securities underlying their ADSs until such taxes or other charges are paid. It may apply payments owed to holders of ADSs or sell deposited securities underlying their ADSs to pay any taxes they owe, and they will remain liable for any deficiency. If theThe Bank of New York Mellon sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to holders of ADSs any proceeds, or send to them any property remaining after it has paid the taxes.
Reclassifications
| If AngloGold Ashanti: | Then: | ||||||||||
Reclassifies, splits up or consolidates any of the deposited securities; | The cash, ordinary shares or other securities received by The Bank of New York Mellon will become deposited securities. Each ADS will automatically represent its equal share of the new deposited securities. | ||||||||||
Distributes securities on the ordinary shares that are not distributed to holders of ADSs; or Recapitalises, reorganises, merges, liquidates, sells all or substantially all of AngloGold Ashanti’s assets, or takes any similar action. | The Bank of New York Mellon may, and will if AngloGold Ashanti asks it to, distribute some or all of the cash, AngloGold Ashanti ordinary shares or other securities it receives. It may also issue new ADSs or ask holders of ADSs to surrender their outstanding ADSs in exchange for new ADSs identifying the new deposited securities. | ||||||||||
Amendment and Termination
AngloGold Ashanti may, for any reason, agree with The Bank of New York Mellon to amend the Deposit Agreement and the ADSs without the consent of holders. If the amendment increases fees or charges (except for taxes and other governmental charges or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses) or if the amendment prejudices an important right of ADS holders, it will only become effective 30 days after The Bank of New York Mellon notifies holders of ADSs of the amendment. At the time an amendment becomes effective, holders of ADSs are considered, by continuing to hold their ADSs, to agree to the amendment and to be bound by the ADSs and the agreement as amended.
The Bank of New York Mellon may terminate the Deposit Agreement by mailing notice of termination to ADS holders at least 30 days prior to the date fixed in the notice if AngloGold Ashanti asks it to do so. The Bank of New York Mellon may also terminate the Deposit Agreement if The Bank of New York Mellon has told AngloGold Ashanti that it would like to resign and AngloGold Ashanti has not appointed a new depositary bank within 90 days. In both cases, The Bank of New York Mellon must notify holders of AngloGold Ashanti ADSs at least 30 days before termination.
After termination, The Bank of New York Mellon and its agents will be required to do only the following under the Deposit Agreement: collect distributions on the deposited securities, sell rights, and, upon surrender of ADSs, deliver AngloGold Ashanti ordinary shares and other deposited securities. Four months after the date of termination or later, The Bank of New York Mellon may sell any remaining deposited securities by public or private sale and will hold the proceeds of the sale, as well as any other cash it is holding under the Deposit Agreement, for the pro rata benefit of the ADS holders who have not surrendered their ADSs. It will not invest the money and will have no liability for interest. The Bank of New York Mellon’s only obligations will be to account for the proceeds of the sale and other cash. After termination, AngloGold Ashanti’s only obligations will be with respect to indemnification of, and payment of certain amounts to, The Bank of New York Mellon.
Limitations on Obligations and Liability to ADS Holders
The Deposit Agreement expressly limits AngloGold Ashanti’s obligations and the obligations of The Bank of New York Mellon, and limits AngloGold Ashanti’s liability and the liability of The Bank of New York Mellon. AngloGold Ashanti and The Bank of New York Mellon:
•are only obligated to take the actions specifically set forth in the Deposit Agreement without negligence or bad faith;
•are not liable if either of AngloGold Ashanti or The Bank of New York Mellon is prevented or delayed by law or circumstances beyond their control from performing their obligations under the Deposit Agreement;
•are not liable if either of AngloGold Ashanti or The Bank of New York Mellon exercises discretion permitted under the Deposit Agreement;
•are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the Deposit Agreement, or for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement;
•have no obligation to become involved in a lawsuit or other proceeding related to the ADSs or the Deposit Agreement on behalf of the holders of ADSs or on behalf of any other party;
•may rely on advice of or information from legal counsel, accountants, and any persons presenting AngloGold Ashanti’s ordinary shares for deposit, any registered holder or any other person believed by AngloGold Ashanti in good faith to be competent to give such advice or information; and
232
•pursuant to the Deposit Agreement AngloGold Ashanti and The Bank of New York Mellon agree to indemnify each other under certain circumstances.
Requirements for Depositary Action
Before The Bank of New York Mellon will issue, transfer or register the transfer of an ADS, make a distribution on an ADS, or allow withdrawal of AngloGold Ashanti ordinary shares, The Bank of New York Mellon may require:
•payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any ordinary shares or other deposited securities;
•production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
•compliance with regulations it may establish, from time to time, consistent with the Deposit Agreement, including presentation of transfer documents.
The Bank of New York Mellon may refuse to deliver, transfer or register transfers of ADSs generally when the books of The Bank of New York Mellon or AngloGold Ashanti’s booksAshanti are closed, or at any time if either AngloGold Ashanti or The Bank of New York Mellon thinks it advisable to do so.
Holders of ADSs have the right to cancel their ADSs and withdraw the underlying ordinary shares at any time except:
•when temporary delays arise because: (1) either AngloGold Ashanti or The Bank of New York Mellon have closed AngloGold Ashanti’s transfer books; (2) the transfer of the ordinary shares is blocked in connection with voting at a general meeting of shareholders; or (3) AngloGold Ashanti is paying a dividend on the ordinary shares;
•when ADS holders seeking to withdraw the ordinary shares are liable for unpaid fees, taxes and similar charges; or
•when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of the ordinary shares or other deposited securities.
This right of withdrawal may not be limited by any other provision of the Deposit Agreement.
Pre-release of ADSs
In certain circumstances, subject to the provisions of the Deposit Agreement, The Bank of New York Mellon may deliver ADSs before deposit of the underlying ordinary shares. This is called a pre-release of the ADS.
The Bank of New York Mellon may also deliver AngloGold Ashanti ordinary shares upon cancellation of pre-released ADSs (even if the ADSs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying AngloGold Ashanti ordinary shares are delivered to The Bank of New York Mellon. The Bank of New York Mellon may receive ADSs instead of ordinary shares to close out a pre-release.
The Bank of New York Mellon may pre-release ADSs only under the following conditions:
•before or at the time of the pre-release, the person to whom the pre-release is being made must represent to The Bank of New York Mellon in writing that it or its customer: (a) owns the ordinary shares or ADSs to be remitted, (b) assigns all beneficial rights, title and interest in such ADSs or ordinary shares, as the case may be, to The Bank of New York Mellon in its capacity as the depositary and for the benefit of the ADS holders, and (c) will not take any action with respect to such ADSs or ordinary shares, as the case may be, that is consistent with the transfer of beneficial ownership (including, without the consent of The Bank of New York Mellon, disposing of such ADSs or ordinary shares, as the case may be) other than satisfaction of such pre-release;
•the pre-release must be fully collateralized with cash, US government securities, or other collateral that The Bank of New York Mellon considers appropriate; and
Direct Registration System
In the Deposit Agreement, all parties to the Deposit Agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated ADSs upon acceptance thereof to DRS by The Depository Trust Company, also referred to as DTC. DRS is the system administered by DTC pursuant to which the depositary may register the ownership of uncertificated ADSs, which ownership will be evidenced by periodic statements sent by the depositary to the registered holders of uncertificated ADSs. Profile is a required feature of DRS which allows a DTC participant, claiming to act on behalf of a registered holder of ADSs, to direct the depositary to register a transfer of those ADSs to DTC or its nominee and to deliver those ADSs to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the ADS registered holder to register that transfer.
233
In connection with and in accordance with the arrangements and procedures relating to DRS/Profile, the parties to the Deposit Agreement understand that The Bank of New York Mellon will not verify, determine or otherwise ascertain that the DTC participant which is claiming to be acting on behalf of an ADS holder in requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf of the ADS holder (notwithstanding any requirements under the Uniform Commercial Code). In the Deposit Agreement, the parties agree that The Bank of New York Mellon’s reliance on and compliance with instructions received by The Bank of New York Mellon through the DRS/Profile System and in accordance with the Deposit Agreement will not constitute negligence or bad faith on the part of The Bank of New York Mellon.
Shareholder Communications: Inspection of Register of Holders of ADSs
The Bank of New York Mellon will make available for inspection at its office all communications that it receives from AngloGold Ashanti as a holder of deposited securities that AngloGold Ashanti makes generally available to holders of deposited securities. The Bank of New York Mellon sends copies of those communications if requested by AngloGold Ashanti. ADS holders have a right to inspect the register of holders of ADSs, but not for the purpose of contacting those holders about a matter unrelated to AngloGold Ashanti’s business or the ADSs.
234
10D.Exchange controls
Exchange controls and other limitations affecting security holders
The following is a general outline of South African exchange controls and such outline may not apply to former residents of South Africa. Investors should consult a professional advisor as to the exchange control implications of their particular investments.
South African law provides for exchange control regulations, which restrict the export of capital from the Common Monetary Area, which comprises South Africa, the Kingdoms of Lesotho and Swaziland and the Republic of Namibia. The exchange control regulations, whichAfrica. Exchange controls are administered by the Financial Surveillance Department of the South African Reserve Bank (SARB), are applied throughoutin terms of the Exchange Control Regulations, and regulate transactions involving South African residents and non-residents, with the exception of transactions between South African residents and residents of the Common Monetary Area, which comprises the Kingdoms of Lesotho and regulate transactions (including capital flows intoEswatini (formerly Swaziland) and outthe Republic of the Common Monetary Area) involving South African residents, including natural persons and legal entities.
The Government of South African individuals. However, it is impossibleAfrica has, however, committed itself to predict with any certainty if and when the government will removerelaxing exchange controls gradually and significant relaxation has occurred in their entirety or how the controls may continue to change over time.recent years.
The comments below relate, in general, to exchange controls in place at the date of this annual report.
Investments in South African companies
Dividends
Dividends declared to foreign stockholders in public companies listed on the Johannesburg Stock Exchange (JSE) are not subject to the approval of the SARB.SARB, provided that the shares in respect of which the dividends are declared have been endorsed “non-resident” by the SARB or an Authorised Dealer at the time of acquisition. Dividends are freely transferable to foreign stockholders from both trading and non-trading profits earned in South Africa by public listed companies.
Voting rights
There are no limitations imposed by South African law, including South African exchange controls, or by the Memorandum of Incorporation of AngloGold Ashanti on the rights of non-South African shareholders to vote their ordinary shares.
Overseas financing, interest and investments
Interest on foreign loans, if paid from cash generated from operations in South Africa, may be remittable abroad, provided that the loans and the payment of the relevant interest in respect of such loans have received prior SARB approval.
AngloGold Ashanti and its South African subsidiaries require SARB approval to raise debt from and repay debt to non-residents of the Common Monetary Area, mainly in respect of the terms of repayment applicable to such loans, as well as any guarantees that may be provided in respect of such loans, by AngloGold Ashanti or its South African subsidiaries.
Debt raised outside the Common Monetary Area by AngloGold Ashanti’s non-South African subsidiaries is not restricted under South African exchange control regulations and can be used for investment outside the Common Monetary Area, subject to the relevant conditions imposed by the SARB in connection with such investment, the establishing of such a non-South African subsidiary or in raising the debt by such subsidiary. For example, AngloGold Ashanti and its South African subsidiaries would require SARB approval in order for AngloGold Ashanti and/or its South African subsidiaries to provide guarantees for the obligations of any of its non-South African subsidiaries. In addition, funds obtained from non-residents of the Common Monetary Area and debt raised outside the Common Monetary Area by AngloGold Ashanti’s non-South African subsidiaries must be repaid or serviced by AngloGold Ashanti’s foreign subsidiaries unless otherwise approved by the SARB.
A listing by a South African company on any stock exchange other than the JSE in connection with raising capital requires permission from the SARB.
Under current exchange control regulations, offshore investments by AngloGold Ashanti and its subsidiaries require the approval of the SARB. Subject to such prior approval of the SARB, there is no limit on the amount of capital that may be invested offshore.
235
10E.Taxation
South African taxation
General
The following discussionsummary summarises the South African tax consequences of the ownership and disposition of shares by South African residents or ADSs by a US holder (as defined below). and is not intended to constitute tax advice. This summary is based upon current South African tax law and South African Revenue Service (SARS) practice, the Convention Between the Government of the United States of America and the Republic of South Africa for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital Gains, signed 17 February 1997 (Treaty), and in part upon representations of the depositary, and assumes that each obligation provided for in, or otherwise contemplated by, a Deposit Agreement and any related agreement will be performed in accordance with its respective terms.
The following summary of the South African tax considerations does not address the tax consequences to a US holder that is resident in South Africa for South African tax purposes, whose holding of shares or ADSs is effectively connected with a permanent establishment in South Africa through which such US holder carries on business activities or, in the case of an individual, who performs independent personal services, with a fixed base situated therein, or who is otherwise not entitled to the full benefits under the Treaty.
The statements of law set forth below are subject to any changes (which may be applied retroactively) in South African law or in the interpretation thereof by SARS, or in the Treaty, occurring after the date hereof. It should be expressly noted that South African tax law does not specifically address the treatment of ADSs. However, it is reasonable to assume (although no assurance can be made) that the tax treatment of US holders of shares is also applicable to US holders of ADSs.
Holders are strongly urged to consult their own tax advisors as to the consequences under South African, US federal, state and local, and other applicable laws, of the ownership and disposition of shares or ADSs.
Taxation of dividends
South Africa currently imposes a Dividend Withholding Tax on Companies (dividends tax) at a rate of 20 percent on the net amount of the dividend declared and paid by a resident company, other than a Headquarter Company. This rate was increased to 20 percent on 22 February 2017 when the Minister of Finance announced the increase in the rate pertaining to the dividends paid by South African companies with effect from 1 March 2017.
The dividends withholding tax is generally imposed on the beneficial owner. owner of the dividends. The dividend withholding tax is subject to domestic exemptions or relief in terms of an applicable double taxation treaty. The application of such domestic exemptions or relief in terms of an applicable double taxation treaty is subject to the making of certain declarations and undertakings by the beneficial owner of the dividends to the regulated intermediary making payment of the dividend. In terms of the latest amendments to the tax provisions, the declaration and undertaking entitling the beneficial owner to a reduced dividend withholding tax rate must be renewed every five years, subject to certain exemptions.
The dividends tax could be reduced to a lower rate under an applicable double tax treaty, if all requirements are met. In the case of dividends paid to a US holder with respect to shares, the Treaty would generally limit the dividends tax rate to five percent of the gross amount of the dividends if a corporate US holder holds directly at least 10 percent of the voting stock of AngloGold Ashanti.Ashanti, provided that the applicable declaration and undertaking are given by the beneficial owner that the reduced rate applies. In all other cases, the maximum tax rate under the Treaty is 15 percent of the gross amount of the dividend. Even though the domestic rate is thus 20 percent on the net amount of the dividends, the maximum rate that is payable under the Treaty is 15 percent of the gross amount of the dividends. There are differentDifferent rules to considermay apply if the beneficial owner of the dividends is a US resident who carries on business in South Africa through a permanent establishment situated in South Africa, or performs in South Africa independent personal services from a fixed basepermanent establishment situated in South Africa, and the dividends are attributable to such permanent establishment or fixed base. Moreover, if the dividends tax rate is reduced under the auspices of an applicable double tax treaty, there are certain South African compliance requirements that must be met in order to accessobtain the double tax treaty relief, amongst others the completion of a declaration and undertaking by the recipientsbeneficial owners in favour of the Company.Company and/or the relevant participant. In terms of the latest tax provisions the declaration and undertaking need to be renewed at least every five years unless the regulated intermediary is subject to the provisions of the US Foreign Account Tax Compliance legislation.
236
The concept of CTC effectively means the sum of the stated capital or share capital and share premium of a company that existed on 1 January 2011, excluding any transfers from reserves to the share premium account or stated capital account, plus proceeds from the issue of any new shares by a company.company, less the amount of CTC that has been returned to shareholders. Any application of CTC is limited to the holders of a class of shares and specifically thatshares. In addition, a distribution of CTC attributable to a specific class must be made proportionately to the number of shares held by a shareholder in a specific class.
For dividends tax purposes a dividend is defined as any dividend as indicated above that is paid by a company that is a resident or paid by a foreign company if the share in respect of which that foreign dividend is paid is a listed share and to the extent that the foreign dividend does not constitute a distribution of an asset in kind.
Dividends are generally exempt from the payment of income tax.
Taxation of capital gains on sale or other disposition
South African residents are (subject to certain exemptions) taxed on their worldwide income, while non-residents are only taxed on South African sourced income (subject to the provisions of any relevant double taxation agreement).
Capital gains tax is not a separate tax to income tax; instead, a percentile of the taxpayer’s net capital gain (that is the taxable capital gain) is included in its taxable income on which it is taxed at the income tax rate.
Non-residents are only subject to the South African capital gains tax provisions in respect of the disposal of any immovable property (such as land and buildings or mining rights) or any interest or right of whatever nature to or in immovable property situated in South Africa, or any asset of a permanent establishment through which that non-resident is carrying on a trade in South Africa. In the instance of a shareholder holding shares in a South African company, the ‘interest in immovable property’ requirements are met if 80 percent or more of the market value of the shares is directly or indirectly attributable to South African immovable property held on capital account, and that shareholder (whether alone or together with any connected person in relation to that person), directly or indirectly, holds at least 20 percent of the equity shares of that South African company.
The effective marginalcapital gains tax rate for South African residents is 36 percent for trusts, 18 percent for individuals and 22,4 percent for companies. The income tax rate applicable in each instance is 45 percent for trusts, 45 percent for individuals and 2822.4 percent for companies.
Securities transfer tax (STT)
No securities transfer tax, or STT, is payable in South Africa with respect to the issue of a security, but STT is payable upon transfer, redemption or redemptioncancellation thereof.
STT on transfers of securities is charged at a rate of 0,250.25 percent on the 'taxable amount' in respect of the 'transfer' of every security issued by a company incorporated in South Africa, or a company incorporated outside South Africa, but listed on an exchange in South Africa, subject to certain exemptions.
The word 'transfer' is broadly defined and includes the transfer, sale, assignment or cession or disposal in any other manner of a security which results in a change in beneficial ownership. The cancellation or redemption of a security is also regarded as a transfer'transfer' unless the company is being liquidated. However, the transfer of a security that does not result in a change in beneficial ownership is not regarded as a 'transfer' for STT purposes. A security is also defined as a depositary receipt in a company. Accordingly, STT is payable on the transfer of a depositary receipt issued by a company, including specifically the ADSs issued by AngloGold Ashanti. Generally, the central securities depositary that has been accepted as a participant in terms of the Financial Markets Act, is liable for the payment of the STT, on the basis that it is recoverable from the person to whom it is transferred.
STT is levied on the 'taxable amount' of a security. The taxable amount of a listed security is the greater of the consideration for the security declared by the transferee or the closing price of that security as traded on the stock exchange concerned. In the case of a transfer of a listed security, either the member or the participant holding the security in custody, or where the listed security is not held in custody, the company that issued the listed security, is liable for the tax. The tax must be paid by the fourteenth day of the month following the transfer.month during which the transfer occurred.
237
Withholding tax on interest
The issue or transfer of shares is not a taxable supply for value-added tax (“VAT”) purposes. However, fees charged by independent service providers would be subject to VAT at the standard rate of 15%.
United States Taxation
General
The following is a general summary of certain material US federal income tax consequences of the ownership and disposition of shares or ADSs to a US holder (as defined below) that holds its shares or ADSs as a capital asset. With respect to the following, references to shares includes references to ADSs unless the context indicates otherwise. This summary does not address any aspect of US federal gift or estate tax, or the state, local or non-US tax consequences to a US holder of shares or ADSs.shares. This
summary is based on US tax laws including the Internal Revenue Code of 1986, as amended (the Code), Treasury regulations promulgated thereunder, rulings, judicial decisions, administrative pronouncements, and the Treaty, all as currently in effect as of the date of this annual report, and all of which are subject to change or changes in interpretation, possibly with retroactive effect. In addition, this summary is based in part upon the representations of the depositary and the assumption that each obligation in the Deposit Agreement relating to the ADSs and any related agreement will be performed in accordance with its terms.
This summary does not address all aspects of US federal income taxation that may apply to holders that are subject to special tax rules, including US expatriates, non-resident aliens present in the United States for at least 183 days during the calendar year, insurance companies, tax-exempt entities, banks, certain financial institutions, persons subject to the alternative minimum tax, regulated investment companies, securities broker-dealers, traders in securities who elect to apply a mark-to-market method of accounting, investors that own (directly, indirectly or by attribution) 10 percent or more of the outstanding share capital or voting stock of AngloGold Ashanti, partnerships or other entities treated as partnerships for US federal income tax purposes or persons holding shares or ADSs through such entities, persons holding their shares or ADSs as part of a straddle, hedging or conversion transaction, persons who acquired their shares or ADSs pursuant to the exercise of employee stock options or otherwise as compensation, accrual basis taxpayers, or persons whose functional currency is not the US dollar. Such holders may be subject to US federal income tax consequences different from those set forth below.
As used herein, the term “US holder” means a beneficial owner of shares or ADSs that is: (a) a citizen or individual resident of the United States for US federal income tax purposes; (b) a corporation (or other entity taxable as a corporation for US federal income tax purposes) created or organised in or under the laws of the United States, or any state thereof (includingor the District of Columbia);Columbia; (c) an estate the income of which is subject to US federal income taxation regardless of its source; or (d) a trust if (i) a court within the United States can exercise primary supervision over the administration of the trust and one or more US persons are authorised to control all substantial decisions of the trust or (ii) it has a valid election in effect under applicable Treasury regulations to be treated as a United States person.
If a partnership (including for this purpose any entity treated as a partnership for US federal income tax purposes) holds shares, or ADSs, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If a US holder is a partner in a partnership that holds shares, or ADSs, the holder is urged to consult its own tax advisor regarding the specific tax consequences of the ownership and disposition of the shares or ADSs.shares.
US holders should consult their own tax advisors regarding the specific South African and US federal, state and local tax consequences of owning and disposing of shares or ADSs in light of their particular circumstances as well as any consequences arising under the laws of any other taxing jurisdiction. In particular, US holders are urged to consult their own tax advisors regarding whether they are eligible for benefits under the Treaty.
For US federal income tax purposes, a US holder of ADSs should generally be treated as owning the underlying shares represented by those ADSs. Therefore, deposits or withdrawals by a US holder of shares for ADSs or of ADSs for shares will not be subject to US federal income tax. The following discussion (except where otherwise expressly noted) applies equally to US holders of shares and US holders of ADSs.
▪Taxation of dividends
The gross amount of any distribution (including the amount of any South African withholding tax thereon) paid to a US holder by AngloGold Ashanti generally will be taxable as dividend income to the US holder for US federal income tax purposes on the date the distribution is actually or constructively received by the US holder, in the case of shares, or by the depositary, in the case of ADSs. Corporate US holders will not be eligible for the dividends received deduction in respect of dividends paid by AngloGold
238
Ashanti. For foreign tax credit limitation purposes, dividends paid by AngloGold Ashanti will be income from sources outside the United States.
As noted above in “-Taxation-South African Taxation-Taxation of dividends”, the South African government has enacted a dividend withholding tax. As a result, US holders who are eligible for benefits under the current Treaty will be subject to a maximum withholding tax of 15 percent on the gross amount of dividend distributions paid by AngloGold Ashanti.
The amount of any distribution paid in foreign currency (including the amount of any South African withholding tax thereon) generally will be includible in the gross income of a US holder of shares in an amount equal to the US dollar value of the foreign currency calculated by reference to the spot rate in effect on the date of receipt by the US holder, in the case of shares, or by the depositary, in the case of ADSs, regardless of whether the foreign currency is converted into US dollars on such date. If the foreign currency is converted into US dollars on the date of receipt, a US holder of shares generally should not be required to recognise foreign currency gain or loss in respect of the dividend. If the foreign currency received in the distribution is not converted into US dollars on the date of receipt, a US holder of shares generally will have a tax basis in the foreign currency equal to its US dollar value on the date of receipt. Any gain or loss recognised upon a subsequent conversion or other disposition of the foreign currency generally will be treated as US source ordinary income or loss. In the case of a US holder of ADSs, the amount of any distribution paid in a foreign currency generally will be converted into US dollars by the depositary upon its receipt. Accordingly, a US holder of ADSs generally will not be required to recognise foreign currency gain or loss in respect of the distribution. Special rules govern and specific elections are available to accrual method taxpayers to determine the US dollar amount includible in income in the case of taxes withheld in a foreign currency. Accrual basis taxpayers are therefore urged to consult their own tax advisors regarding the requirements and elections applicable in this regard.
Subject to certain limitations, South African withholding taxes will be treated as foreign taxes eligible for credit against a US holder’s US federal income tax liability. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. Dividend income generally will constitute ‘passive category’ income, or in the case of certain US holders, ‘general category’ income. The use of foreign tax credits is subject to complex conditions and limitations. In lieu of a credit, a US holder who itemises deductions may elect to deduct all of such holder’s foreign taxes in the taxable year. A deduction does not reduce US tax on a dollar-for-dollar basis like a tax credit, but the deduction for foreign taxes is not subject to all the same limitations applicable to foreign tax credits. US holders are urged to consult their own tax advisors regarding the availability of foreign tax credits.
Certain US holders (including individuals) are eligible for reduced rates of US federal income tax in respect of “qualified dividend income” received. For this purpose, qualified dividend income generally includes dividends paid by a non-US corporation if, among other things, the US holders meet a certain minimum holding period and other requirements and the non-US corporation satisfies certain requirements, including that either (i) the ordinary shares (or ADSs) with respect to which the dividend has been paid are readily tradable on an established securities market in the United States, or (ii) the non-US corporation is eligible for the benefits of a comprehensive US income tax treaty (such as the Treaty) which provides for the exchange of information. AngloGold Ashanti currently believes that dividends paid with respect to its shares and ADSs should constitute qualified dividend income for US federal income tax purposes. AngloGold Ashanti anticipates that its dividends will be reported as qualified dividends on Forms 1099-DIV delivered to US holders. Each individual US holder of AngloGold Ashanti shares or ADSs is urged to consult his own tax advisor regarding the availability to him of the reduced dividend tax rate in light of his own particular situation.
The US Treasury has expressed concern that parties to whom ADSs are pre-released may be taking actions that are inconsistent with the claiming of foreign tax credits for US holders of ADSs. Such actions would also be inconsistent with the claiming of the reduced rate of tax described above, applicable to dividends received by certain non-corporate holders. Accordingly, the analysis of the creditability of South African withholding taxes or the availability of qualified dividend treatment could be affected by future actions that may be taken by the US Treasury with respect to ADSs.
▪Taxation of dispositions
If a US holder is a resident of the United States for purposes of the Treaty, such holder will not be subject to South African tax on any capital gain if it sells or disposes of its shares or ADSs.shares. Special rules apply to individuals who are residents of more than one country.
Subject to the passive foreign investment company considerations discussed below, upon athe sale, exchange or other disposition of shares, or ADSs, a US holder generally will recognise capital gain or loss for US federal income tax purposes in an amount equal to the difference between the US dollar value of the amount realised on the disposition and the holder'sholder’s tax basis, determined in US dollars, in the shares or ADSs.shares. Such gain or loss generally will be US source gain or loss, and will be treated as a long-term capital gain or loss if the holder’s holding period in the shares or ADSs exceeds one year at the time of disposition. If the US holder is an individual, any capital gain generally will be subject to US federal income tax at preferential rates if specified minimum holding periods are met. The deductibility of capital losses is subject to significant limitations.limitations under the Code.
A US holder’s tax basis in a share will generally be its US dollar cost. The US dollar cost of a share purchased with foreign currency will generally be the US dollar value of the purchase price on the date of purchase, or the settlement date for the purchase in the case of shares traded on an established securities market that are purchased by a cash basis US holder or an electing accrual basis US holder. The amount realised on a sale or other disposition of shares for an amount in foreign currency will be the US dollar value of this amount on the date of sale or disposition. On the settlement date, the US holder will recognise US source foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the US dollar value of the amount received based on the exchange rates in effect on the date of sale or other disposition and the settlement date. However, in the case of shares traded on an established securities market that are sold by a cash basis US holder (or an accrual basis US holder that so elects), the amount realised will be based on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised at that time. If an accrual basis US holder makes
239
either of the elections described above, it must be applied consistently from year to year and cannot be revoked without the consent of the Internal Revenue Services (IRS).
Foreign currency received on the sale or other disposition of a share will have a tax basis equal to its US dollar value on the settlement date. Any gain or loss recognised on a sale or other disposition of foreign currency (including its use to purchase shares or upon exchange for US dollars) will be US source ordinary income or loss.
▪Passive foreign investment company considerations
A non-USforeign corporation will be classified a Passive Foreign Investment Companypassive foreign investment company (PFIC) for any taxable year if at least 75 percent of its gross income consists of passive income (such as dividends, interest, rents or royalties (other than rents or royalties derived in the active conduct of a trade or business and received from an unrelated person), or gains on the disposition of certain minority interests), or at least 50 percent of the average value of its assets consists of assets that produce, or are held for the production of, passive income. AngloGold Ashanti believes that it was not treated as a PFIC for the taxable year ended 31 December 20162020 or any prior taxable years and does not expect to become a PFIC in the foreseeable future. If AngloGold Ashanti were characterised as a PFIC for any taxable year, a US holder would suffer adverse tax consequences with respect to that taxable year and all future years during which it holds AngloGold Ashanti ordinary shares (or ADSs).shares.
These consequences may include having gainsgain realised on the disposition of shares treated as ordinary income rather than capital gainsgain and being subject to punitive interest charges on the receipt of certain dividends and on the proceeds of the sale or other disposition of the shares. Furthermore, dividends paid by AngloGold Ashanti would not be “qualified dividend income” and would be taxed at the higher rates applicable to other items of ordinary income. US holders should consult their own tax advisors regarding the potential application of the PFIC rules to their ownership of the shares.
▪US information reporting and backup withholding
In general, dividend payments made to a US holder and proceeds paid from the sale, exchange, or other disposition of shares may be subject to information reporting to the IRS and possible backup withholding. US federal backup withholding generally is imposed at a current rate of 24 percent on specified payments including dividends and gross sale proceeds to persons who fail to furnish required information. Backup withholding will not apply to a US holder who furnishes a correct taxpayer identification number or certificate of foreign status and makes any other required certification or who is otherwise exempt from backup withholding. US persons who are required to establish their exempt status generally must provide IRS Form W-9 (Request for Taxpayer Identification Number and Certification). Non-US holders generally will not be subject to US information reporting or backup withholding. However, these holders may be required to provide certification of non-US status (generally on IRS Form W-8BEN or W-8BEN-E) in connection with payments received in the United States or through certain US-related financial intermediaries. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a holder’s US federal income tax liability. A holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information.
▪Information with respect to foreign financial assets
Individuals that own “specified foreign financial assets” with an aggregate value in excess of $50,000 are generally required to file information reports with respect to such assets with their U.S. federal income tax returns. Depending on the individual’s circumstances, higher threshold amounts may apply. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-United Statesforeign persons, (ii) financial instruments and contracts held for investment that have non-United Statesforeign issuers or counterparties and (iii) interests in non-United Statesforeign entities. TheTherefore, the shares or ADSs may be treated as specified foreign financial assets. In such cases, certain US holders may be subject to this information reporting regime and be required to file IRS form 8938 listing these assets with their U.S. federal income tax returns. Failure to file information reports may subject a US holder to penalties. US holders are urged to consult their own tax advisors regarding their obligations to file information reports with respect to the shares and ADSs.shares.
240
10F. DIVIDENDS AND PAYING AGENTS
Not applicable.
10G. STATEMENT BY EXPERTS
Not applicable.
10H.Documents on displayDisplay
AngloGold Ashanti files annual reports on Form 20-F and reports on Form 6-K with the SEC. You may read and copyaccess this information at the SEC’s Public Reference Room at 100F Street, N.E., Room 1580, Washington D.C. 20549 or by accessing the SEC’s home page (http://www.sec.gov). You can also request copies of documents, upon payment of a duplicating fee, by writing to the Public Reference Section of the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. In addition, AngloGold Ashanti’s reports and other information may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005. Copies of the documents referred to herein may also be inspected at AngloGold Ashanti’s offices by contacting AngloGold Ashanti at 76 Rahima Moosa Street, Newtown, Johannesburg, 2001 (P.O. Box 62117, Marshalltown, 2107) South Africa, Attention: Company Secretary, telephone number:
No material on the AngloGold Ashanti website forms any part of, or is incorporated by reference into, this annual report on Form 20-F. References herein to the company’s website shall not be deemed to cause such incorporation.
10I. SUBSIDIARY INFORMATION
Not applicable.
241
ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
TREASURY POLICY
Risk management activities within the group are the ultimate responsibility of the board of directors. The Chief Financial Officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan. The Audit and Risk Committee is responsible for overseeing risk management plans and systems, as well as financial risks which include a review of treasury activities and exposure to the group’s counterparties.
Under the treasury and risk management policy, hedges may be put in place using approved instruments over the group’s planned gold production and resultant gold sales currency exposures. The tenor of the hedges may extend out to ten10 years. The treasury and risk management policy sets limits on the extent to which the hedge position may change for the various levels of treasury management from dealer, through treasurer, executive managementExecutive Management team and board.board members.
The financial risk management activities objectives of the group are as follows:
•Safeguarding the group’s core earnings stream from its major assets through the effective control and management of gold and other commodity price risk, foreign exchange risk and interest rate risk;
•Effective and efficient usage of credit facilities in both the short- and long-term through the adoption of reliable liquidity management planning and procedures;
•Ensuring that investment and hedging transactions are undertaken with creditworthy counterparts; and
•Ensuring that all contracts and agreements related to financial risk management activities are co-ordinated and consistent throughout the group and comply where necessary with all relevant regulatory and statutory requirements.
Under the treasury and risk management policy, treasury reports are produced at the following minimum intervals for review by management and the board of directors.
| • | Daily | Treasurer | |||||||||
| • | Monthly | Executive Committee | |||||||||
| • | Quarterly | Audit and Risk Committee and Board of Directors | |||||||||
| • | Half-yearly | Audit and Risk Committee, Board of Directors and shareholder reports | |||||||||
The Treasury Risk Analyst is responsible for monitoring all reports for completeness and accuracy which are reviewed by the Treasurer.
At AngloGold Ashanti, all front office (dealing), middle office (risk reporting), back office (deal confirmations) and payment (treasury settlements) activities are segregated. All treasury transactions are captured on a third party developed treasury and risk management system that is widely used in corporate treasuries. The group internal audit function conducts regular and ad-hoc reviews of the activities of treasury and the group’s treasury system.
Gold price risk management activities
In the normal course of its operations, the group is exposed to gold and other commodity price, currency, interest rate, equity price, liquidity and non-performance risk, which includes credit risk. The group is also exposed to certain by-product commodity price risk. In order to manage these risks, the group may enter into transactions which make use of derivatives. The group has developed a risk management process to facilitate, control and monitor these risks.
Gold price risk arises from the risk of an adverse effect of current or future earnings resulting from fluctuations in the price of gold. The group eliminated its hedge book during 2010 and has since had full exposure to the spot price of gold.
As at 31 December 2020, the group had no commitments against future production potentially settled in cash.
Foreign exchange price risk protection agreements
The group, from time to time, may enter into currency forward exchange and currency option contracts to hedge certain anticipated transactions denominated in foreign currencies. The objective of the group’s foreign currency hedging activities is to protect the group from the risk that the eventual cash flows resulting from transactions denominated in US dollars will be adversely affected by changes in exchange rates.
As at 31 December 2020 and 2019, the group had no open forward exchange or currency option contracts in its currency hedge position.
242
IFRS guidance on derivatives and hedging requires that derivative instruments be accounted for as follows:
•Contracts that meet the criteria for hedge accounting are designated as the hedging instruments, hedging the variability of forecasted cash flows from the sale of production into the spot market and from capital expenditure denominated in a foreign currency and are classified as cash flow hedges. Cash flow hedge losses pertaining to capital expenditure of $2m$1 million as at 31 December 2017 (2016: $2m)2020 (2019: $1 million) are expected to be reclassified from accumulated other comprehensive income and recognised as an adjustment to depreciation expense over the life of the Serra Grande mine.
•All other derivatives are measured at their estimated fair value, with the changes in estimated fair value at each reporting date reported as gains or losses on derivatives in earnings in the period in which they occur.
Cash flows related to these instruments designated as qualifying hedges are reflected in the consolidated statement of cash flows in the same category as the cash flow from the items being hedged. Accordingly, cash flows relating to the settlement of forward sale commodity derivatives contracts hedging the forecasted sale of production into the spot market will be reflected upon settlement as a component of operating cash flows.
Interest rate and liquidity risk
Fluctuations in interest rates impactsimpact interest paid and received on the short-term cash investments and financing activities, giving rise to interest rate risk.
In the ordinary course of business, the group receives cash from the proceeds of its gold sales and is required to fund its working capital requirements. This cash is managed to ensure that surplus funds are invested in a manner to achieve market related returns while minimising risks.
The group is able to actively source financing at competitive rates. The counterparts are financial and banking institutions and their credit ratings are regularly monitored by the group.
Cash and loans advanced maturity profile
| 2020 | 2019 | ||||||||||||||||||||||||||||||||||||||||||||||
| Maturity date | Currency | Fixed rate investment amount (million) | Effective rate % | Floating rate investment amount (million) | Effective rate % | Fixed rate investment amount (million) | Effective rate % | Floating rate investment amount (million) | Effective rate % | ||||||||||||||||||||||||||||||||||||||
| All less than one year | $ | — | 572 | 0.15 | 21 | 0.58 | 103 | 1.09 | |||||||||||||||||||||||||||||||||||||||
| ZAR | 2,611 | 3.30 | 29 | 2.00 | 166 | 6.56 | 25 | 5.00 | |||||||||||||||||||||||||||||||||||||||
| AUD | — | 50 | — | — | 41 | 0.23 | |||||||||||||||||||||||||||||||||||||||||
| BRL | — | 32 | 1.90 | — | 33 | 5.94 | |||||||||||||||||||||||||||||||||||||||||
| ARS | 6,679 | 34.00 | 4,820 | 30.00 | 1,831 | 35.00 | 81 | 28.00 | |||||||||||||||||||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||
| Maturity date | Currency | Fixed rate investment amount (million) | Effective rate % | Floating rate investment amount (million) | Effective rate % | Fixed rate investment amount (million) | Effective rate % | Floating rate investment amount (million) | Effective rate % | ||||||||||
| All less than one year | $ | — | — | 57 | 2.39 | 7 | 0.80 | 37 | 0.42 | ||||||||||
| ZAR | 123 | 6.46 | 157 | 5.78 | 625 | 6.69 | 127 | 5.49 | |||||||||||
| AUD | — | — | 22 | 3.00 | — | — | 31 | 3.50 | |||||||||||
| BRL | — | — | 28 | 8.60 | — | — | 5 | 14.08 | |||||||||||
| ARS | — | — | — | — | — | — | 1 | 20.00 | |||||||||||
Borrowings maturity profile
| Within one year | Between One and two years | Between Two and five years | After five years | Total | ||||||||||||||||||||||||||||||||||||||||
| Currency | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | |||||||||||||||||||||||||||||||||||
| $ | 95 | 6.4 | 812 | 5.4 | — | — | 977 | 4.6 | 1,884 | |||||||||||||||||||||||||||||||||||
| BRL | 1 | 5.7 | — | — | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||
| TZS | 108,170 | 12.5 | — | — | — | — | — | — | 108,170 | |||||||||||||||||||||||||||||||||||
| Within one year | Between One and two years | Between Two and five years | After five years | Total | |||||||||||||||
| Currency | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | ||||||||||
| $ | 28 | 5.4 | 48 | 4.9 | 1,441 | 5.2 | 291 | 6.5 | 1,808 | ||||||||||
| ZAR | 34 | 10.2 | 42 | 10.2 | 2,826 | 8.8 | 194 | 15.5 | 3,096 | ||||||||||
| BRL | 3 | 5.7 | 3 | 5.6 | 3 | 5.0 | — | — | 9 | ||||||||||
| AUD | 7 | 5.9 | 214 | 4.6 | 21 | 6.8 | 41 | 6.8 | 283 | ||||||||||
The table above is based on the borrowings as at 31 December 20172020 including borrowing cost and accrued interest but excludes any fair value adjustments.
243
Interest rate risk
| Fixed for less than one year | Fixed for between one and three years | Fixed for greater than three years | ||||||||||||||||||||||||||||||||||||||||||
| Currency | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Total Borrowings amount (million) | |||||||||||||||||||||||||||||||||||||
| $ | 95 | 6.4 | 812 | 5.4 | 977 | 4.6 | 1,884 | |||||||||||||||||||||||||||||||||||||
| BRL | 1 | 5.7 | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||
| TZS | 108,170 | 12.5 | — | 0 | — | — | 108,170 | |||||||||||||||||||||||||||||||||||||
| Fixed for less than one year | Fixed for between one and three years | Fixed for greater than three years | ||||||||||||||||
| Currency | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Borrowings amount (million) | Effective rate % | Total Borrowings amount (million) | |||||||||||
| $ | 28 | 5.4 | 746 | 5.1 | 1,034 | 5.5 | 1,808 | |||||||||||
| ZAR | 34 | 10.2 | 2,786 | 8.8 | 276 | 14.0 | 3,096 | |||||||||||
| BRL | 3 | 5.7 | 3 | 5.2 | 3 | 5.3 | 9 | |||||||||||
| AUD | 7 | 6.5 | 221 | 4.6 | 55 | 6.8 | 283 | |||||||||||
The table above is based on the borrowings as at 31 December 20172020 including borrowing cost and accrued interest but excludes any fair value adjustments.
Non-performance risk
Realisation of contracts is dependent upon counterparts’ performance. The group has not obtained collateral or other security to support the financial instruments subject to non-performance risk, but the credit standing of counterparts was monitored on a regular basis throughout the year. The group spreads its business over a number of financial and banking institutions to minimise the risk of potential non-performance risk.non-performance. Furthermore, the approval process of counterparts and the limits applied to each counterpart were monitored by the board of directors. Where possible, ISDA netting agreements were put in place.
The combined maximum credit risk exposure at balance sheet date amounts to $361$1,501 million in 2020 for financial assets (2016: $395(2019: $644 million) and nil million for financial guarantees (2016: nil million)(2019: nil). Credit risk exposure netted by open derivative positions with counterparts was nil (2016:(2019: nil). No set-off is applied to balance sheet amounts due to the different maturity profiles of assets and liabilities.
Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information. The estimated fair values of the group’s financial instruments, as measured at 31 December, are as follows (assets (liabilities)):
| 2017 | 2016 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||
Carrying Amount | Fair value | Carrying Amount | Fair value | Carrying Amount | Fair value | Carrying Amount | Fair value | |||||||||||||||||||||||||||||||
| (millions) | $ | $ | $ | $ | (millions) | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Cash and cash equivalents | 205 | 205 | 215 | 215 | Cash and cash equivalents | 1,330 | 1,330 | 456 | 456 | |||||||||||||||||||||||||||||
| Restricted cash | 65 | 65 | 55 | 55 | Restricted cash | 73 | 73 | 64 | 64 | |||||||||||||||||||||||||||||
| Deferred compensation asset | Deferred compensation asset | 28 | 28 | — | — | |||||||||||||||||||||||||||||||||
| Short-term borrowings | (38 | ) | (38 | ) | (34 | ) | (34 | ) | Short-term borrowings | (142) | (142) | (734) | (741) | |||||||||||||||||||||||||
| Long-term borrowings | (2,230 | ) | (2,339 | ) | (2,144 | ) | (2,169 | ) | Long-term borrowings | (1,789) | (1,989) | (1,299) | (1,394) | |||||||||||||||||||||||||
| Listed investments - available for sale | 80 | 80 | 51 | 51 | ||||||||||||||||||||||||||||||||||
| Listed investments - held to maturity | 4 | 6 | 6 | 8 | ||||||||||||||||||||||||||||||||||
| Unlisted investments - held to maturity | 54 | 54 | 73 | 73 | ||||||||||||||||||||||||||||||||||
| Listed investments - FVTPL | Listed investments - FVTPL | — | — | 21 | 21 | |||||||||||||||||||||||||||||||||
| Listed investments - FVTOCI | Listed investments - FVTOCI | 186 | 186 | 82 | 82 | |||||||||||||||||||||||||||||||||
| Listed and unlisted investments | Listed and unlisted investments | 2 | 2 | 67 | 67 | |||||||||||||||||||||||||||||||||
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash restricted for use, cash and cash equivalents
The carrying amounts approximate fair value.
Trade and other receivables and trade and other payables
The carrying amounts approximate fair value because of the short-term duration of these instruments.instruments, except for the deferred compensation asset which is carried at fair value in level 3 of the fair value hierarchy.
Investments and other non-current assets
Listed equity investments classified as available-for-saleFVTOCI and FVTPL are carried at fair value while fixed income investments and other non-current assets are carried at amortised cost. The fair value of fixed income investments and other non-current assets has been calculated using market interest rates. The unlisted equity investments are carried at cost or fair value.cost.
244
Borrowings
The interest rate on borrowings is reset on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.
Derivatives
The fair values of volatility-based instruments (i.e. options) are estimated based on market prices, volatilities, credit risk and interest rates for the periods under review.
Gain (loss) on non-hedge derivatives and other commodity contracts recognised
| Year ended 31 December | |||||||||||
| 2020 | 2019 | ||||||||||
| (millions) | $ | $ | |||||||||
Other commodity contracts(1) | (19) | 5 | |||||||||
| Year ended 31 December | |||||
| 2017 | 2016 | ||||
| (millions) | $ | $ | |||
| Unrealised | |||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 10 | 18 | |||
(1) Excluding the commodity contracts transferred to held for sale liabilities.
Accumulated other comprehensive income | Changes in fair value recognised | Reclassification adjustments | Accumulated other comprehensive income | ||||||||
as of 1 January 2017 | in 2017 | as of 31 December 2017 | |||||||||
| (millions) | $ | $ | $ | $ | |||||||
| Derivatives designated as | |||||||||||
| Capital expenditure | (2 | ) | — | — | (2 | ) | |||||
| Before tax totals | (2 | ) | — | — | (2 | ) | |||||
| After tax totals | (1 | ) | — | — | (1 | ) | |||||
Accumulated other comprehensive income | Changes in fair value recognised | Reclassification adjustments | Accumulated other comprehensive income | ||||||||
as of 1 January 2016 | in 2016 | as of 31 December 2016 | |||||||||
| (millions) | $ | $ | $ | $ | |||||||
| Derivatives designated as | |||||||||||
| Capital expenditure | (2 | ) | — | — | (2 | ) | |||||
| Before tax totals | (2 | ) | — | — | (2 | ) | |||||
| After tax totals | (1 | ) | — | — | (1 | ) | |||||
Foreign exchange risk
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency.
The following table discloses the approximate foreign exchange risk sensitivities of borrowings at 31 December 20172020 (actual changes in the timing and amount of the following variables may differ from the assumed changes below)
.
| Change in exchange rate | Change in | borrowings Total | ||||||||||||||
| $M | ||||||||||||||||
| Debt | ||||||||||||||||
| Spot (+ | ||||||||||||||||
Change in exchange rate | Change in borrowings Total | ||||||||||||||
| $M | |||||||||||||||
| Debt | |||||||||||||||
| Spot | |||||||||||||||
245
ITEM 12: DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
12A. DEBT SECURITIES
Not applicable
12B. WARRANTS AND RIGHTS
Not applicable
12C. OTHER SECURITIES
Not applicable
12D. AMERICAN DEPOSITARY SHARES
12D.3. DEPOSITARY FEES AND CHARGES
AngloGold Ashanti’s American Depositary Shares, or ADSs, each representing one of AngloGold Ashanti’s ordinary shares, are traded on the New York Stock Exchange under the symbol “AU.” The ADSs are evidenced by American Depositary Receipts, or ADRs, issued by The Bank of New York Mellon, as Depositary under the Amended and Restated Deposit Agreement dated as of 3 June 2008, among AngloGold Ashanti Limited, The Bank of New York Mellon and owners and beneficial owners of from time to time of ADRs. ADS holders may have to pay the following service fees to the Depositary:
| Service | Fees (USD) | |||||||
| Issuance of ADSs | Up to 5 cents per ADS | (1) | ||||||
| Cancellation of ADSs | Up to 5 cents per ADS | (1) | ||||||
| Distribution of cash dividends or other cash distributions | Up to 2 cents per ADS | (2) | ||||||
| Distribution of securities pursuant to | ||||||||
| (i) stock dividends, free stock distributions or | ||||||||
| (ii) exercises of rights to purchase additional ADSs | Up to 5 cents per ADS | (2) | ||||||
| ADR Depositary Services fee | Up to 2 cents per year | (2) | ||||||
(1)These fees are typically paid to the Depositary by the brokers on behalf of their clients receiving the newly-issued ADSs from the Depositary and by the brokers on behalf of their clients delivering the ADSs to the Depositary for cancellation. The brokers in turn charge these transaction fees to their clients.
(2)In practice, the Depositary has not collected these fees. If collected, such fees are offset against the related distribution made to the ADR holder.
In addition, ADS holders are responsible for certain fees and expenses incurred by the Depositary on their behalf including (1) taxes and other governmental charges, (2) such registration fees as may from time to time be in effect for the registration of transfers of ordinary shares generally on the share register and applicable to transfers of ordinary shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals, and (3) such cable, telex and facsimile transmission expenses as are expressly incurred by the Depositary in the conversion of foreign currency.
Fees and other charges payable by the Depositary, any of the Depositary’s agents, including the Custodian, or the agents of the Depositary’s agents in connection with the servicing of Shares or other Deposited Securities, shall be collected at the sole discretion of the Depositary by billing such owners for such charge or by deducting such charge from one or more cash dividends or other cash distributions.
For further information, refer to “Item 10C: Material Contracts - The Deposit Agreement”.
12D.4. DEPOSITARY PAYMENTS FOR 2020
For the year ended 31 December 2017,2020, The Bank of New York Mellon, as Depositary, reimbursed AngloGold Ashanti an amount of $867,747 (2016: $1,185,580)$1,057,722 (2019: $1,097,316) mainly for investor relations related expenses.
246
PART II
ITEM 13: DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
247
ITEM 14: MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
248
ITEM 15: CONTROLS AND PROCEDURES
(a)Disclosure Controls and Procedures:As of 31 December 2020, (the “Evaluation Date”), the company, under the supervision and with the participation of its management, including the chief executive officer and chief financial officer has evaluated the effectiveness of the company’s disclosure controls and procedures (as defined in Rules 13a - 15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on such evaluation, the chief executive officer and chief financial officer have concluded that, as of the Evaluation Date, the company’s disclosure controls and procedures are effective, and are reasonably designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. These disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosure.
(b)Management’s Annual Report on Internal Control over Financial Reporting: Management is responsible for establishing and maintaining adequate internal control over financial reporting for the company, as defined in the Exchange Act Rule 13a - 15(f) and 15d -15(f). The company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the company’s financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.
The company’s internal control over financial reporting includes those policies and procedures that:
•Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the company;
•Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and the Directors of the company; and
•Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements.Projections of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
The company’s management assessed the effectiveness of the company’s internal control over financial reporting as of the Evaluation Date. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) in Internal Control - Integrated Framework and related illustrative documents released on 14 May 14, 2013.Based on this assessment, and using those criteria, management concluded that the company’s internal control over financial reporting was effective as of the Evaluation Date.
(c) Changes in Internal Control over Financial Reporting:The Company maintains a system of internal control |
There have been no further changes in the company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13(a) - 15 during the year ended 31 December 31, 20172020 that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.
See Item 3D, Risk Factors, of this annual report on Form 20F for risk factors related to the implementation and integration of information technology systems and maintaining an effective system of internal control over financial reporting.
(d)Attestation Report of the Registered Public Accounting Firm: The Company’s independent registered accounting firm, Ernst & Young Inc., has issued an attestation report on the effectiveness of the company’s internal control over financial reporting.This report appears below.
249
/s/ I Kramer
Ian Kramer
Interim Chief Financial Officer
/s/ KC Ramon
Kandimathie Christine Ramon
Interim Chief Executive Officer
250
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of AngloGold Ashanti Limited
Opinion on internalInternal Control over Financial Reporting
We have audited AngloGold Ashanti Limited’s internal control over financial reporting as of 31 December 2017,2020, based on criteria established in Internal Control-IntegratedControl—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO framework) (the COSO criteria). In our opinion, AngloGold Ashanti Limited (the Company) maintained, in all material respects, effective internal control over financial reporting as of 31 December 2017,2020, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the consolidated statement of financial position of AngloGold Ashanti Limited as of 31 December 2017, 20162020, 2019 and 2015,2018, the related consolidated statements of income, comprehensive income, cash flows and changes in equity for each of the three years in the period ended 31 December 2017,2020, and the related notes and our report dated 2926 March 20182021 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitation of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young Inc.
Johannesburg, Republic of South Africa
251
ITEM 16A: AUDIT COMMITTEE FINANCIAL EXPERT
Membership of the Audit and Risk Committee, including its chairman, comprises only independent non-executive directors, in compliance with the Sarbanes-Oxley Act. This also fulfils the guidelines of King IV, which became effective 1 November 2016, and the requirements of the Companies Act, No. 71 of 2008, which became effective on 1 May 2011. The Sarbanes-Oxley Act requires the board to identify a financial expert from within its ranks. The board has resolved that MrMr. Rhidwaan Gasant is the Audit and Risk Committee's financial expert. Individually, the remaining members of the committee have considerable knowledge and experience in associated areas such as audit, risk and corporate governance to help oversee and guide the board and the company.
252
ITEM 16B: CODE OF ETHICS AND WHISTLE-BLOWING POLICIES
In order to comply with the company's obligation in terms of the Sarbanes-Oxley Act and King IV, and in the interests of good governance, the company has systems and procedures to introduce, monitor and enforce its ethical codes and has adopted a code of business principles and ethics for employees and directors, a code of ethics for the Chief Executive Officer, Chief Financial Officer and Senior Financial Officers, and a whistle-blowing policy that encourages employees to report anonymously if they wish and without fear of retaliation acts of an unethical or illegal nature that affect the company's interests. The code of business principles and ethics expresses the company’s commitment to the conduct of its business in line with ethical standards and is designed to enable employees and directors to perform their roles and duties with integrity and responsibility.
The whistle-blowing policy provides channels for employees to report acts and practices that are in conflict with the company’s code of business principles and ethics or are unlawful, including financial malpractice or dangers to the public or the environment. Reports may be made to management or through several mediums including the intranet, internet, telephone, short messaging system (sms), fax and post. All reports not made to management are administered by a third party, Tip-Offs Anonymous, to ensure independence of the process. Reported cases are relayed to management through group compliance and group internal audit. A report is provided by group compliance and group internal audit to the Serious Concerns Committee, a management committee, on a quarterly basis as well as the Social, Ethics and Sustainability Committee and the Audit and Risk Committee on a quarterly basis. Reporters have the option to request feedback on reported cases. The whistle-blowing policy encourages reports to be made in good faith in a responsible and ethical manner. Employees are encouraged to first seek resolution of alleged malpractices through discussion with their direct managers, if appropriate, or other management including legal, compliance, human resources or internal audit.
The code of business principles and ethics for employees and directors and the code of ethics for the Chief Executive Officer, Chief Financial Officer and Senior Financial Officers are available on the company’s website at
253
ITEM 16C: PRINCIPAL ACCOUNTANT FEES AND SERVICES
Ernst & Young Inc. has served as AngloGold Ashanti’s independent public accountants for each of the financial years in the three-year period ended 31 December 2017,2020, for which audited financial statements appear in this annual report on Form 20-F.
The following table presents the aggregate fees for professional services and other services rendered by Ernst & Young Inc. to AngloGold Ashanti in 20172020 and 2016.2019.
| 2020 | 2019 | ||||||||||
| (in millions) | $ | $ | |||||||||
Audit fees(1) | 6.02 | 5.77 | |||||||||
Audit-related fees(2) | 1.80 | 1.14 | |||||||||
Tax fees(3) | 0.32 | 0.07 | |||||||||
All other fees(4) | 0.01 | 0.09 | |||||||||
| Total | 8.15 | 7.07 | |||||||||
| 2017 | 2016 | ||||
| (in millions) | $ | $ | |||
Audit fees(1) | 6.14 | 5.20 | |||
Audit-related fees(2) | 0.73 | 0.69 | |||
Tax fees(3) | 0.16 | 0.21 | |||
All other fees(4) | 0.04 | 0.02 | |||
| Total | 7.07 | 6.12 | |||
Rounding may result in computational differences.
(1) The Audit fees consist of fees billed for the annual audit services engagement and other audit services, which are those services that only the external auditor reasonably can provide, and include the Company audit; statutory audits; attest services; and assistance with and review of documents filed with the SEC.
(2) Audit-related fees consist of fees billed for assurance and related services.
(3) Tax fees include fees billed for tax advice and tax compliance services.
(4) All other fees include non-audit services.
Audit and Risk Committee Pre-approval Policies and Procedures
It is the policy of AngloGold Ashanti to maintain compliance with the requirements of the various applicable legislation and good governance practices when appointing or assigning work to the Company’s external auditor. Non-audit services may not be undertaken without an employee of AngloGold Ashanti obtaining the pre-approval of the Audit and Risk Committee as is laid out in the procedures relating to the pre-approval process.
The Audit and Risk Committee has delegated the approval authority to the chairman of the committee, Mr. Rhidwaan Gasant (1 January 2020 to 30 November 2020) and Mr. Alan Ferguson (from 1 December 2020 to date) or his designated official. The approval may take the form of a written or oral instruction, and in the case of an oral instruction this would be ratified at the next Audit and Risk Committee meeting. On a quarterlyhalf yearly basis a summary of all approvals and work to date is tabled at the Audit and Risk Committee meeting.
All non-audit services provided to AngloGold Ashanti by the principal independent registered public accounting firm during 20172020 were reviewed and approved according to the procedures above. None of the services provided during 20172020 were approved under the de minimis exception allowed under the Exchange Act.
Audit Firm Rotation
Given the length of tenure of Ernst & Young Inc. as the company’s external auditor, the Audit and Risk Committee has decided that it would be appropriate to put the audit out for tender beginning for the fiscal year ending 31 December 2023. In this regard, the company has already started planning and discussions have been held with a number of audit firms in respect of a potential tender process. It is expected that a formal request for proposal will be issued in 2021.
ITEM 16D: EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
ITEM 16E: PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Neither the issuer nor any affiliate of the issuer purchased any of the company’s shares during 2017.2020.
ITEM 16F: CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
254
ITEM 16G: CORPORATE GOVERNANCE
AngloGold Ashanti’s corporate governance practices do notare regulated by the JSE Listings Requirements. The following is a summary of the significant ways in which South Africa’s corporate governance standards which are followed by AngloGold Ashanti differ in any significant way from those followed by USU.S. domestic companies under the New York Stock Exchange’s NYSE Listing Standards. At this time, as described further below, AngloGold Ashanti complies with all of the NYSE Listing Standards as well as the JSE Listings Requirements.
The NYSE Listing Standards require that non-management directors of US-listed companies meet at regularly scheduled executive sessions without management. The JSE Listings Requirements do not require such meetings of listed company non-executive directors. AngloGold Ashanti’s non-management directors meet regularly without management.
The NYSE Listing Standards require US-listed companies to have a nominating/corporate governance listing standards.committee composed entirely of independent directors. The JSE Listings Requirements do not require such a committee but AngloGold Ashanti currently has a Nominations Committee composed of six non-executive directors, all of whom are independent under the JSE Listings Requirements and NYSE Listing Standards. The Nominations Committee is chaired by the Chairman of the AngloGold Ashanti Board.
The NYSE Listing Standards also require US-listed companies to have a compensation committee composed entirely of independent directors. The JSE Listings Requirements merely require that boards have such a committee but not that its members be independent. AngloGold Ashanti has appointed a Remuneration and Human Resources Committee, currently comprised of four non-executive directors, all of whom are independent under the JSE Listings Requirements and NYSE Listing Standards. The Remuneration and Human Resources Committee is chaired by the Chairman of the AngloGold Ashanti Board.
The NYSE Listings Standards require US-listed companies to have an audit committee composed entirely of independent directors. The Companies Act requires that the Audit Committee be approved by shareholders on an annual basis at a company’s annual general meeting. Both the Companies Act and the JSE Listings Requirements require that the audit committee be composed entirely of independent directors. AngloGold Ashanti has appointed an Audit and Risk Committee, currently comprising four non-executive directors, all of whom are independent, as defined under the Companies Act, the JSE Listings Requirements and the NYSE Listing Standards.
The Companies Act and the JSE Listings Requirements require the appointment of a Social and Ethics Committee, and AngloGold Ashanti has appointed a Social and Ethics Committee, comprising independent non-executive directors.
ITEM 16H: MINE SAFETY DISCLOSURE
Not applicable.
255
PART III
ITEM 17: FINANCIAL STATEMENTS
Not applicable.
256
ITEM 18: FINANCIAL STATEMENTS
The consolidated financial statements for the year ended 31 December 20172020 were authorised for issue by the Board of Directors on 2926 March 20182021 and were signed on its behalf by Srinivasan Venkatakrishnan,Kandimathie Christine Ramon, Interim Chief Executive Officer, Kandimathie Christine Ramon, Chief Financial Officer, Sipho Pityana,Maria DC Ramos, Chairman of the Board of Directors, and Rhidwaan Gasant,Alan Ferguson, Chairman of the Audit and Risk Committee.
F - 1
Report of independent registered public accounting firm
To the shareholders and the board of directors of AngloGold Ashanti Limited
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of financial position of AngloGold Ashanti Limited (“the Company”) as of 31 December 2017, 20162020, 2019 and 2015,2018, the related consolidated statements of income, comprehensive income, cash flows and changes in equity for each of the three years in the period ended 31 December 2017,2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, based on our audits and the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at 31 December 2017, 2016,2020, 2019 and 2015,2018, and the results of its operations and its cash flows for each of the three years thenin the period ended 31 December 2020, in conformity with International Financial Reporting Standards (“IFRS’) as Issuedissued by the International Accounting Standards Board.
We did not audit the financial statements of Kibali (Jersey) Limited (“Kibali”), a corporation in which the Company has a 50% interest. In the consolidated financial statements, the Company’s investment in Kibali was stated at $1,423$1,604 million, $1,400$1,506 million and $1,406$1,439 million as of 31 December 2017, 20162020, 2019 and 2015,2018, respectively, the Company’s equity in the net income of Kibali was stated at $9$238 million in 2017, $242020, $143 million in 20162019 and, $70$104 million in 2015.2018. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Kibali, is based solely on the report of the other auditors.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of 31 December 2017,2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated 2926 March 20182021 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F - 2
| Description of the Matter | Sale of South African assets | ||||
| During 2020, the Company completed its disposal of the South African assets for a total consideration less cost to sell of $220 million, as disclosed in Note 1.2 and Note 9 to the consolidated financial statements. The determination of the loss arising on disposal required judgement and estimation, particularly in determining the total estimated consideration, which comprised of $200 million cash consideration and further deferred compensation based on future gold production, which was estimated at a fair value of $28 million. The Company used a probability weighted discounted cash flow model to measure the deferred compensation. The significant inputs and assumptions used in each scenario of the discounted cash flow model, included the production plan over the agreed upon period and the weighted average cost of capital (WACC). The determination of the fair value of the deferred compensation involved complex auditor judgment, due to the subjectivity of these significant assumptions and inputs, as well as the weighted probabilities and required the inclusion of specialists on our team. | |||||
| How We Addressed the Matter in Our Audit | Our procedures to address this matter included, among others, obtaining an understanding, evaluating the design and testing the operating effectiveness of internal controls over the disposal process. For example, we tested controls over management’s review of the significant assumptions used in the deferred compensation valuation and over the accounting treatment for the transaction. We read the executed sale agreement to obtain an understanding of the structure of the sale and the deferred compensation, including an assessment of whether all conditions precedent to the sale were met at the effective date of the transaction. We recalculated the loss on disposal, which included the deferred compensation component made up of various judgements around the production plan per year, applicable discount rates for the agreed upon period and the relative weightings attached to each scenario. For the discount rate, with the support of our valuation specialists, we assessed management’s WACC by comparing it to our independently calculated WACC. For the production plan, we compared the plan to the previous production profiles developed by the Company and analysed the actual production versus that contained in the production plan underlying each scenario. We evaluated the weighted probabilities assigned to each scenario by considering the Company’s historical and year to date production and any available published information from the buyer, regarding its estimated production plan. We evaluated the related disclosures in the consolidated financial statements. | ||||
| Description of the Matter | Obuasi re-development operational readiness assessment | ||||
Construction of the two-phased Obuasi mine re-development project commenced in 2018. It is the Company’s accounting policy (as disclosed in Note 1.2) that all costs directly attributable to developing the mine are capitalised, including pre-production revenue. As disclosed in Note 1.2 to the consolidated financial statements, at 1 October 2020, the Company determined that assets associated with Phase 1 of the Obuasi mine re-development project reached their operational readiness, as the assets were deemed capable of operating in a manner intended by management. Determining whether the criteria were sufficiently met to trigger operational readiness impacts when capitalisation of costs and pre-production revenue would cease and recognition of revenue, production costs and amortisation would begin. Auditing the accounting treatment for the Phase 1 mine re-development assets was complex due to the significant judgment needed to determine when these assets were capable of operating in a manner intended by management, which was assessed based on the achievement of specific criteria. This involved a high degree of auditor judgment, given the subjective nature of certain of the criteria used, such as the mining area available, the quantity of material mined, and ounces produced during each month in 2020. | |||||
| How We Addressed the Matter in Our Audit | Our procedures to address this matter included, among others, obtaining an understanding, evaluating the design and testing the operating effectiveness of controls over the re-development process. For example, we tested controls over management’s review of the significant judgments to determine when the Phase 1 assets are capable of operating in a manner as intended by the Company. This included testing of controls over the accuracy and completeness of the underlying production data and capital expenditure spend. We evaluated the completeness and judgements of the criteria and methodology used by management and we assessed management’s judgments that the set criteria were met as at 1 October 2020 by comparing the project plan to actual performance for a number of criteria; in particular the mining area available, the quantity of material mined, and ounces produced. In so doing, we also tested the completeness and accuracy of the underlying production data and capital expenditure spend used in management’s analyses, to underlying accounting and other records. We evaluated the related disclosures in the consolidated financial statements. | ||||
F - 3
| Description of the Matter | Geita VAT recoverability | ||||
As disclosed in Note 22 to the consolidated financial statements, at 31 December 2020, the Company’s Geita mine has recorded $191 million of VAT receivables due from the Tanzanian Revenue Authority (TRA). An amendment, effective 20 July 2017, to Tanzania’s mining legislation included an amendment to the VAT Act 2015 to the effect that no input tax credit can be claimed for expenses incurred in the production of raw minerals which are to be exported, resulting in Geita’s VAT input claims being disqualified since then by the TRA. In 2019, an amendment issued by the Tanzanian Ministry of Minerals, effective 22 February 2019, provided clarity on the definition of raw minerals. The Finance Amendment act became effective from 1 July 2020 which deleted the disqualification of Input VAT claims. The change is not retrospective and therefore VAT input claims and offsets from July 2017 to June 2020 remain disallowed. Further correspondence was received from the TRA in early 2021 in which the TRA state that they continue to disallow the claims between July 2017 to June 2020. Auditing the probability weighted discounted model and the expected timing of recovery of these receivables involved significant auditor judgement, including the involvement of our tax specialists. This is because the timing of VAT offsetting depends on forecasts of Geita’s available taxable income, which includes judgments around Geita’s business plan, VAT claims to corporate tax offset, and assigned weighting and probability per scenario. Significant auditor judgment was also required in reassessing whether the TRA will apply the definition of raw minerals to the historical claims and how the TRA will apply the legal rulings and related recovery mechanisms in relation to VAT offsetting against taxable income based on the correspondence received to date and its impact on historical conclusions. | |||||
| How We Addressed the Matter in Our Audit | Our procedures to address this matter included, among others, obtaining an understanding, evaluating the design and testing the operating effectiveness of controls over the Company’s assessment of tax law and the process to estimate the recoverability of the VAT receivable. We read correspondence between management, the TRA and the Tanzanian Government, including correspondence related to the tax returns and assessments received during the year and in 2021 to evaluate management assumptions. We read external legal counsel opinions obtained by management to support their interpretation of tax legislation and recoverability of the VAT. We also discussed external legal counsel’s interpretation of tax legislation with external legal counsel directly. We involved our tax professionals with specialised skills and knowledge to assist us to evaluate the recoverability of the VAT receivable based on the above correspondence and their interpretation of legislation, including historical payments and offsets received to date for claims prior to the period of July 2017 to June 2020. We tested the judgments around the timing of VAT offsetting by comparing the Company’s business plan to historical performance. We also evaluated the reasonableness of the annual percentage of VAT to corporate tax offset included in each scenario, by considering recent developments with the relevant authorities and the interpretations by management and their external legal counsel of the relevant tax legislation. We evaluated the reasonableness of the provision by performing sensitivity analyses on alternative weighting and probability scenarios. We evaluated the VAT receivable disclosure in the consolidated financial statements. | ||||
F - 4
| Description of the Matter | Rehabilitation and decommissioning provision | ||||
At 31 December 2020 the rehabilitation and decommissioning provision amounted to $674 million in the consolidated financial statements. The Company incurs obligations to close, restore and rehabilitate its mine sites. Auditing the Company’s rehabilitation and decommissioning provision was complex due to the significance, as well as the high estimation uncertainty, of the provision. The determination of the provision is based on, among other things, judgements and estimates of current damage caused, nature, timing and amount of future costs to be incurred to rehabilitate the mine sites, estimates of future inflation, exchange rates and discount rates. These assumptions are inherently judgemental and subject to continued mining activity and rehabilitation, legislation and environmental changes, which cannot be predicted with certainty and thus requires specific focus each year and the use of specialists on our team. The consolidated disclosures are included in Note 1.2 and Note 27 to the consolidated financial statements. | |||||
| How We Addressed the Matter in Our Audit | Our procedures to address this matter included, among others, obtaining an understanding, evaluating the design and testing the operating effectiveness of controls over the Company’s process to estimate rehabilitation and decommissioning provisions. For example, we tested controls over the determination of key inputs such as life of mine reserves and production profile, discount rates, inflation and exchange rates, and the nature, amount and timing of future rehabilitation costs. With the support of our valuation specialists, we assessed management’s macro-economic assumptions in their rehabilitation models by comparing them to available market information. The most significant of these macro-economic assumptions were the risk-free interest rates, expected inflation and exchange rates. We tested the mathematical accuracy of the valuation models. We compared the timing of the expected cash flows with reference to the life of mine plans for the respective mines. We compared the current year cash flow assumptions to those of the prior year and considered management’s explanations where these have changed or deviated. We compared the cost rates used by management to publicly available information, as well as ongoing rehabilitation activities undertaken by the Company. With the support of our environmental specialists, we inquired of operational management whether additional environmental disturbance occurred since the prior year that would require additional rehabilitation in the future and compared this information to the current mine plan. We inspected reports of the Company’s mine closure plans and assessments of the timing and determination of costs to be incurred prepared by management. We, together with our environmental specialists, evaluated the reports prepared by management to assist in the calculation of the provision. In so doing, we also evaluated management’s professional qualifications and experience related to this estimate, and use of industry accepted methodology. | ||||
/s/ Ernst & Young Inc.
We have served as the Company’s auditor since 1944
Johannesburg, Republic of South Africa
F - 5
PAGE LEFT BLANK INTENTIONALLY
F - 6
ANGLOGOLD ASHANTI LIMITED
Group – income statement
FOR THE YEARS ENDED December 31, DECEMBER 2017, 20162020, 2019 and 20152018
| 2020 | 2019 | 2018 | ||||||||||||||||||
| Figures in millions | Notes | |||||||||||||||||||
| US Dollars | ||||||||||||||||||||
| Continuing operations | ||||||||||||||||||||
| Revenue from product sales | 3 | 4,427 | 3,525 | 3,336 | ||||||||||||||||
| Cost of sales | 4 | (2,699) | (2,626) | (2,584) | ||||||||||||||||
| (Loss) gain on non-hedge derivatives and other commodity contracts | (19) | 5 | (2) | |||||||||||||||||
| Gross profit | 2 | 1,709 | 904 | 750 | ||||||||||||||||
| Corporate administration, marketing and other expenses | 5 | (68) | (82) | (76) | ||||||||||||||||
| Exploration and evaluation costs | (124) | (112) | (98) | |||||||||||||||||
| Impairment, derecognition of assets and profit (loss) on disposal | (1) | (6) | (7) | |||||||||||||||||
| Other (expenses) income | 6 | (57) | (83) | (79) | ||||||||||||||||
| Operating profit | 1,459 | 621 | 490 | |||||||||||||||||
| Interest income | 27 | 14 | 8 | |||||||||||||||||
| Dividend received | 2 | 0 | 2 | |||||||||||||||||
| Foreign exchange and other gains (losses) | 0 | (12) | (9) | |||||||||||||||||
| Finance costs and unwinding of obligations | 7 | (177) | (172) | (168) | ||||||||||||||||
| Share of associates and joint ventures’ profit (loss) | 8 | 278 | 168 | 122 | ||||||||||||||||
| Profit (loss) before taxation | 1,589 | 619 | 445 | |||||||||||||||||
| Taxation | 12 | (625) | (250) | (212) | ||||||||||||||||
| Profit (loss) after taxation from continuing operations | 964 | 369 | 233 | |||||||||||||||||
| Discontinued operations | ||||||||||||||||||||
| Profit (loss) from discontinued operations | 9 | 7 | (376) | (83) | ||||||||||||||||
| Profit (loss) for the year | 971 | (7) | 150 | |||||||||||||||||
| Allocated as follows: | ||||||||||||||||||||
| Equity shareholders | ||||||||||||||||||||
| - Continuing operations | 946 | 364 | 216 | |||||||||||||||||
| - Discontinued operations | 7 | (376) | (83) | |||||||||||||||||
| Non-controlling interests | ||||||||||||||||||||
| - Continuing operations | 18 | 5 | 17 | |||||||||||||||||
| 971 | (7) | 150 | ||||||||||||||||||
| Basic earnings (loss) per ordinary share (cents) | 13 | 227 | (3) | 32 | ||||||||||||||||
| Earnings (loss) per ordinary share from continuing operations | 225 | 87 | 52 | |||||||||||||||||
| Earnings (loss) per ordinary share from discontinued operations | 2 | (90) | (20) | |||||||||||||||||
| Diluted earnings (loss) per ordinary share (cents) | 13 | 227 | (3) | 32 | ||||||||||||||||
| Earnings (loss) per ordinary share from continuing operations | 225 | 87 | 52 | |||||||||||||||||
| Earnings (loss) per ordinary share from discontinued operations | 2 | (90) | (20) | |||||||||||||||||
F - 7
| Figures in millions | Notes | 2017 | 2016 | 2015 | |||||
| US Dollars | |||||||||
| Revenue | 3 | 4,543 | 4,254 | 4,174 | |||||
| Gold income | 2,3 | 4,356 | 4,085 | 4,015 | |||||
| Cost of sales | 4 | (3,582 | ) | (3,263 | ) | (3,294 | ) | ||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 10 | 19 | (7 | ) | |||||
| Gross profit (loss) | 2 | 784 | 841 | 714 | |||||
| Corporate administration, marketing and other expenses | (64 | ) | (61 | ) | (78 | ) | |||
| Exploration and evaluation costs | (114 | ) | (133 | ) | (132 | ) | |||
| Other operating expenses | 5 | (88 | ) | (110 | ) | (96 | ) | ||
| Special items | 6 | (438 | ) | (42 | ) | (71 | ) | ||
| Operating profit (loss) | 80 | 495 | 337 | ||||||
| Interest received | 3 | 15 | 22 | 28 | |||||
| Exchange gain (loss) | (11 | ) | (88 | ) | (17 | ) | |||
| Finance costs and unwinding of obligations | 7 | (169 | ) | (180 | ) | (245 | ) | ||
| Fair value adjustment on issued bonds | — | 9 | 66 | ||||||
| Share of associates and joint ventures’ profit (loss) | 8 | 22 | 11 | 88 | |||||
| Profit (loss) before taxation | (63 | ) | 269 | 257 | |||||
| Taxation | 11 | (108 | ) | (189 | ) | (211 | ) | ||
| Profit (loss) after taxation from continuing operations | (171 | ) | 80 | 46 | |||||
| Discontinued operations | |||||||||
| Profit (loss) from discontinued operations | — | — | (116 | ) | |||||
| Profit (loss) for the year | (171 | ) | 80 | (70 | ) | ||||
| Allocated as follows: | |||||||||
| Equity shareholders | |||||||||
| - Continuing operations | (191 | ) | 63 | 31 | |||||
| - Discontinued operations | — | — | (116 | ) | |||||
| Non-controlling interests | |||||||||
| - Continuing operations | 20 | 17 | 15 | ||||||
| (171 | ) | 80 | (70 | ) | |||||
| Basic earnings (loss) per ordinary share (cents) | 12 | ||||||||
| Earnings (loss) per ordinary share from continuing operations | (46 | ) | 15 | 8 | |||||
| Earnings (loss) per ordinary share from discontinued operations | — | — | (28 | ) | |||||
| Basic earnings (loss) per ordinary share | (46 | ) | 15 | (20 | ) | ||||
| Diluted earnings (loss) per ordinary share (cents) | 12 | ||||||||
| Earnings (loss) per ordinary share from continuing operations | (46 | ) | 15 | 8 | |||||
| Earnings (loss) earnings per ordinary share from discontinued operations | — | — | (28 | ) | |||||
| Diluted earnings (loss) per ordinary share | (46 | ) | 15 | (20 | ) | ||||
ANGLOGOLD ASHANTI LIMITED
Group – statement of comprehensive income
FOR THE YEARS ENDED December 31, DECEMBER 2017, 20162020, 2019 and 20152018
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Restated | Restated | ||||||||||||||||||||||
| US Dollars | |||||||||||||||||||||||
| Profit (loss) for the year | 971 | (7) | 150 | ||||||||||||||||||||
| Items that will be reclassified subsequently to profit or loss: | 38 | 0 | (50) | ||||||||||||||||||||
Exchange differences on translation of foreign operations (1) | 38 | 0 | (50) | ||||||||||||||||||||
| Items that will not be reclassified subsequently to profit or loss: | 86 | 14 | (91) | ||||||||||||||||||||
Exchange differences on translation of non-foreign operations (1) | (16) | 4 | (100) | ||||||||||||||||||||
| Net gain (loss) on equity investments | 98 | 6 | 9 | ||||||||||||||||||||
| Actuarial gain (loss) recognised | 10 | 2 | 5 | ||||||||||||||||||||
| Deferred taxation thereon | (6) | 2 | (5) | ||||||||||||||||||||
| Other comprehensive income (loss) for the year, net of tax | 124 | 14 | (141) | ||||||||||||||||||||
| Total comprehensive income (loss) for the year, net of tax | 1,095 | 7 | 9 | ||||||||||||||||||||
| Allocated as follows: | |||||||||||||||||||||||
| Equity shareholders | |||||||||||||||||||||||
| - Continuing operations | 1,121 | 378 | 75 | ||||||||||||||||||||
| - Discontinued operations | (44) | (376) | (83) | ||||||||||||||||||||
| Non-controlling interests | |||||||||||||||||||||||
| - Continuing operations | 18 | 5 | 17 | ||||||||||||||||||||
| 1,095 | 7 | 9 | |||||||||||||||||||||
(1) Exchange differences arising on translation of foreign and non-foreign operations have been restated to reflect those that will be reclassified subsequently to profit or loss and those that will not be reclassified subsequently to profit or loss. Refer to note 1.
F - 8
| Figures in millions | 2017 | 2016 | 2015 | |||||||
| US Dollars | ||||||||||
| Profit (loss) for the year | (171 | ) | 80 | (70 | ) | |||||
| Items that will be reclassified subsequently to profit or loss: | ||||||||||
| Exchange differences on translation of foreign operations | 123 | 180 | (371 | ) | ||||||
| Share of associates and joint ventures’ other comprehensive income | — | — | 1 | |||||||
| Net gain (loss) on available-for-sale financial assets | 20 | 13 | (14 | ) | ||||||
| Release on impairment of available-for-sale financial assets | 3 | — | 9 | |||||||
| Release on disposal of available-for-sale financial assets | (6 | ) | (2 | ) | (3 | ) | ||||
| Deferred taxation thereon | 8 | (2 | ) | 1 | ||||||
| 25 | 9 | (7 | ) | |||||||
| Items that will not be reclassified subsequently to profit or loss: | ||||||||||
| Actuarial gain (loss) recognised | 8 | (2 | ) | 17 | ||||||
| Deferred taxation thereon | (2 | ) | — | (3 | ) | |||||
| 6 | (2 | ) | 14 | |||||||
| Other comprehensive income (loss) for the year, net of tax | 154 | 187 | (363 | ) | ||||||
| Total comprehensive income (loss) for the year, net of tax | (17 | ) | 267 | (433 | ) | |||||
| Allocated as follows: | ||||||||||
| Equity shareholders | ||||||||||
| - Continuing operations | (37 | ) | 250 | (332 | ) | |||||
| - Discontinued operations | — | — | (116 | ) | ||||||
| Non-controlling interests | ||||||||||
| - Continuing operations | 20 | 17 | 15 | |||||||
| (17 | ) | 267 | (433 | ) | ||||||
ANGLOGOLD ASHANTI LIMITED
Group – statement of financial position
AS AT December 31, DECEMBER 2017, 20162020, 2019 and 20152018
| Figures in millions | Notes | 2020 | 2019 | 2018 | ||||||||||||||||
| US Dollars | ||||||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Non-current assets | ||||||||||||||||||||
| Tangible assets | 15 | 2,884 | 2,592 | 3,381 | ||||||||||||||||
| Right of use assets | 16 | 142 | 158 | |||||||||||||||||
| Intangible assets | 17 | 131 | 123 | 123 | ||||||||||||||||
| Investments in associates and joint ventures | 19 | 1,651 | 1,581 | 1,528 | ||||||||||||||||
| Other investments | 20 | 188 | 76 | 141 | ||||||||||||||||
| Inventories | 21 | 69 | 93 | 106 | ||||||||||||||||
| Trade, other receivables and other assets | 22 | 235 | 122 | 102 | ||||||||||||||||
| Deferred taxation | 29 | 7 | 105 | 0 | ||||||||||||||||
| Cash restricted for use | 23 | 31 | 31 | 35 | ||||||||||||||||
| 5,338 | 4,881 | 5,416 | ||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Other investments | 20 | 0 | 10 | 6 | ||||||||||||||||
| Inventories | 21 | 733 | 632 | 652 | ||||||||||||||||
| Trade, other receivables and other assets | 22 | 229 | 250 | 209 | ||||||||||||||||
| Cash restricted for use | 23 | 42 | 33 | 31 | ||||||||||||||||
| Cash and cash equivalents | 24 | 1,330 | 456 | 329 | ||||||||||||||||
| 2,334 | 1,381 | 1,227 | ||||||||||||||||||
| Assets held for sale | 9 | 0 | 601 | 0 | ||||||||||||||||
| 2,334 | 1,982 | 1,227 | ||||||||||||||||||
| Total assets | 7,672 | 6,863 | 6,643 | |||||||||||||||||
| EQUITY AND LIABILITIES | ||||||||||||||||||||
| Share capital and premium | 25 | 7,214 | 7,199 | 7,171 | ||||||||||||||||
| Accumulated losses and other reserves | (3,519) | (4,559) | (4,519) | |||||||||||||||||
| Shareholders’ equity | 3,695 | 2,640 | 2,652 | |||||||||||||||||
| Non-controlling interests | 45 | 36 | 42 | |||||||||||||||||
| Total equity | 3,740 | 2,676 | 2,694 | |||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||
| Borrowings | 26 | 1,789 | 1,299 | 1,911 | ||||||||||||||||
| Lease liabilities | 16 | 116 | 126 | |||||||||||||||||
| Environmental rehabilitation and other provisions | 27 | 731 | 697 | 827 | ||||||||||||||||
| Provision for pension and post-retirement benefits | 28 | 83 | 100 | 100 | ||||||||||||||||
| Trade, other payables and provisions | 30 | 8 | 15 | 3 | ||||||||||||||||
| Deferred taxation | 29 | 246 | 241 | 315 | ||||||||||||||||
| 2,973 | 2,478 | 3,156 | ||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Borrowings | 26 | 142 | 734 | 139 | ||||||||||||||||
| Lease liabilities | 16 | 37 | 45 | |||||||||||||||||
| Trade, other payables and provisions | 30 | 627 | 586 | 594 | ||||||||||||||||
| Taxation | 31 | 153 | 72 | 60 | ||||||||||||||||
| 959 | 1,437 | 793 | ||||||||||||||||||
| Liabilities held for sale | 9 | 0 | 272 | 0 | ||||||||||||||||
| 959 | 1,709 | 793 | ||||||||||||||||||
| Total liabilities | 3,932 | 4,187 | 3,949 | |||||||||||||||||
| Total equity and liabilities | 7,672 | 6,863 | 6,643 | |||||||||||||||||
F - 9
| Figures in millions | Notes | 2017 | 2016 | 2015 | |||||
| US Dollars | |||||||||
| ASSETS | |||||||||
| Non-current assets | |||||||||
| Tangible assets | 14 | 3,742 | 4,111 | 4,058 | |||||
| Intangible assets | 15 | 138 | 145 | 161 | |||||
| Investments in associates and joint ventures | 17 | 1,507 | 1,448 | 1,465 | |||||
| Other investments | 18 | 131 | 125 | 91 | |||||
| Inventories | 19 | 100 | 84 | 90 | |||||
| Trade, other receivables and other assets | 20 | 67 | 34 | 13 | |||||
| Deferred taxation | 28 | 4 | 4 | 1 | |||||
| Cash restricted for use | 21 | 37 | 36 | 37 | |||||
| Other non-current assets | — | — | 18 | ||||||
| 5,726 | 5,987 | 5,934 | |||||||
| Current assets | |||||||||
| Other investments | 18 | 7 | 5 | 1 | |||||
| Inventories | 19 | 683 | 672 | 646 | |||||
| Trade, other receivables and other assets | 20 | 222 | 255 | 196 | |||||
| Cash restricted for use | 21 | 28 | 19 | 23 | |||||
| Cash and cash equivalents | 22 | 205 | 215 | 484 | |||||
| 1,145 | 1,166 | 1,350 | |||||||
| Non-current assets held for sale | 23 | 348 | — | — | |||||
| 1,493 | 1,166 | 1,350 | |||||||
| Total assets | 7,219 | 7,153 | 7,284 | ||||||
| EQUITY AND LIABILITIES | |||||||||
| Share capital and premium | 24 | 7,134 | 7,108 | 7,066 | |||||
| Accumulated losses and other reserves | (4,471 | ) | (4,393 | ) | (4,636 | ) | |||
| Shareholders’ equity | 2,663 | 2,715 | 2,430 | ||||||
| Non-controlling interests | 41 | 39 | 37 | ||||||
| Total equity | 2,704 | 2,754 | 2,467 | ||||||
| Non-current liabilities | |||||||||
| Borrowings | 25 | 2,230 | 2,144 | 2,637 | |||||
| Environmental rehabilitation and other provisions | 26 | 942 | 877 | 847 | |||||
| Provision for pension and post-retirement benefits | 27 | 122 | 118 | 107 | |||||
| Trade, other payables and deferred income | 29 | 3 | 4 | 5 | |||||
| Deferred taxation | 28 | 363 | 496 | 514 | |||||
| 3,660 | 3,639 | 4,110 | |||||||
| Current liabilities | |||||||||
| Borrowings | 25 | 38 | 34 | 100 | |||||
| Trade, other payables and deferred income | 29 | 638 | 615 | 516 | |||||
| Taxation | 30 | 53 | 111 | 91 | |||||
| 729 | 760 | 707 | |||||||
| Non-current liabilities held for sale | 23 | 126 | — | — | |||||
| 855 | 760 | 707 | |||||||
| Total liabilities | 4,515 | 4,399 | 4,817 | ||||||
| Total equity and liabilities | 7,219 | 7,153 | 7,284 | ||||||
ANGLOGOLD ASHANTI LIMITED
Group – statement of cash flows
FOR THE YEARS ENDED December 31, December 2017, 20162020, 2019 and 20152018
| Figures in millions | Notes | 2020 | 2019 | 2018 | ||||||||||||||||
| US Dollars | ||||||||||||||||||||
| Cash flows from operating activities | ||||||||||||||||||||
| Receipts from customers | 4,411 | 3,535 | 3,339 | |||||||||||||||||
| Payments to suppliers and employees | (2,583) | (2,433) | (2,408) | |||||||||||||||||
| Cash generated from operations | 32 | 1,828 | 1,102 | 931 | ||||||||||||||||
| Dividends received from joint ventures | 148 | 77 | 91 | |||||||||||||||||
| Taxation refund | 31 | 0 | 7 | 5 | ||||||||||||||||
| Taxation paid | 31 | (431) | (228) | (171) | ||||||||||||||||
| Net cash inflow (outflow) from operating activities from continuing operations | 1,545 | 958 | 856 | |||||||||||||||||
| Net cash inflow (outflow) from operating activities from discontinued operations | 109 | 89 | 1 | |||||||||||||||||
| Net cash inflow (outflow) from operating activities | 1,654 | 1,047 | 857 | |||||||||||||||||
| Cash flows from investing activities | ||||||||||||||||||||
| Capital expenditure | ||||||||||||||||||||
| - project capital | (331) | (336) | (170) | |||||||||||||||||
| - stay-in-business capital | (370) | (367) | (405) | |||||||||||||||||
| Interest capitalised and paid | (17) | (6) | 0 | |||||||||||||||||
| Acquisition of intangible assets | (1) | 0 | 0 | |||||||||||||||||
| Dividends from other investments | 9 | 0 | 2 | |||||||||||||||||
| Proceeds from disposal of tangible assets | 3 | 3 | 10 | |||||||||||||||||
| Other investments acquired | (8) | (9) | (13) | |||||||||||||||||
| Proceeds from disposal of other investments | 9 | 3 | 7 | |||||||||||||||||
| Investments in associates and joint ventures | 0 | (5) | (8) | |||||||||||||||||
| Proceeds from disposal of joint ventures | 26 | 0 | 0 | |||||||||||||||||
| Loans advanced to associates and joint ventures | 0 | (3) | (5) | |||||||||||||||||
| Loans repaid by associates and joint ventures | 12 | 23 | 22 | |||||||||||||||||
| Recognition of joint operation - cash | 2 | 0 | 0 | |||||||||||||||||
| Proceeds from disposal of discontinued assets and subsidiaries | 200 | 0 | 0 | |||||||||||||||||
| Decrease (increase) in cash restricted for use | (9) | 0 | (6) | |||||||||||||||||
| Interest received | 27 | 14 | 5 | |||||||||||||||||
| Net cash inflow (outflow) from investing activities from continuing operations | (448) | (683) | (561) | |||||||||||||||||
| Net cash inflow (outflow) from investing activities from discontinued operations | (31) | (54) | 226 | |||||||||||||||||
| Cash in subsidiaries sold and transferred to held for sale | 3 | (6) | 0 | |||||||||||||||||
| Net cash inflow (outflow) from investing activities | (476) | (743) | (335) | |||||||||||||||||
| Cash flows from financing activities | ||||||||||||||||||||
| Proceeds from borrowings | 2,226 | 168 | 753 | |||||||||||||||||
| Repayment of borrowings | (2,310) | (123) | (967) | |||||||||||||||||
| Repayment of lease liabilities | (47) | (42) | ||||||||||||||||||
| Finance costs - borrowings | 26 | (110) | (128) | (130) | ||||||||||||||||
| Finance costs - leases | (8) | (9) | ||||||||||||||||||
| Other borrowing costs | (33) | 0 | (10) | |||||||||||||||||
| Dividends paid | (47) | (43) | (39) | |||||||||||||||||
| Net cash inflow (outflow) from financing activities from continuing operations | (329) | (177) | (393) | |||||||||||||||||
| Net cash inflow (outflow) from financing activities from discontinued operations | 0 | 0 | 0 | |||||||||||||||||
| Net cash inflow (outflow) from financing activities | (329) | (177) | (393) | |||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 849 | 127 | 129 | |||||||||||||||||
| Translation | 25 | 0 | (5) | |||||||||||||||||
| Cash and cash equivalents at beginning of year | 456 | 329 | 205 | |||||||||||||||||
| Cash and cash equivalents at end of year | 24 | 1,330 | 456 | 329 | ||||||||||||||||
F - 10
| Figures in millions | Notes | 2017 | 2016 | 2015 | |||||
| US Dollars | |||||||||
| Cash flows from operating activities | |||||||||
| Receipts from customers | 4,534 | 4,231 | 4,154 | ||||||
| Payments to suppliers and employees | (3,383 | ) | (2,929 | ) | (2,904 | ) | |||
| Cash generated from operations | 31 | 1,151 | 1,302 | 1,250 | |||||
| Dividends received from joint ventures | 6 | 37 | 57 | ||||||
| Taxation refund | 30 | 14 | 12 | 21 | |||||
| Taxation paid | 30 | (174 | ) | (165 | ) | (184 | ) | ||
| Net cash inflow (outflow) from operating activities from continuing operations | 997 | 1,186 | 1,144 | ||||||
| Net cash inflow (outflow) from operating activities from discontinued operations | — | — | (5 | ) | |||||
| Net cash inflow (outflow) from operating activities | 997 | 1,186 | 1,139 | ||||||
| Cash flows from investing activities | |||||||||
| Capital expenditure | |||||||||
| - project capital | (156 | ) | (93 | ) | (105 | ) | |||
| - stay-in-business capital | (673 | ) | (613 | ) | (559 | ) | |||
| Expenditure on intangible assets | (1 | ) | (5 | ) | (3 | ) | |||
| Proceeds from disposal of tangible assets | 7 | 4 | 6 | ||||||
| Other investments acquired | (91 | ) | (73 | ) | (86 | ) | |||
| Proceeds from disposal of other investments | 78 | 61 | 81 | ||||||
| Investments in associates and joint ventures | (27 | ) | (11 | ) | (11 | ) | |||
| Proceeds from disposal of associates and joint ventures | — | 10 | 1 | ||||||
| Loans advanced to associates and joint ventures | (6 | ) | (4 | ) | (5 | ) | |||
| Loans repaid by associates and joint ventures | — | — | 2 | ||||||
| Proceeds from disposal of business and subsidiary | — | — | 819 | ||||||
| Costs on disposal of business | — | — | (7 | ) | |||||
| Cash balances in assets disposed | — | — | (2 | ) | |||||
| Decrease (increase) in cash restricted for use | (8 | ) | 8 | (17 | ) | ||||
| Interest received | 15 | 14 | 25 | ||||||
| Net cash inflow (outflow) from investing activities from continuing operations | (862 | ) | (702 | ) | 139 | ||||
| Net cash inflow (outflow) from investing activities from discontinued operations | — | — | (59 | ) | |||||
| Net cash inflow (outflow) from investing activities | (862 | ) | (702 | ) | 80 | ||||
| Cash flows from financing activities | |||||||||
| Proceeds from borrowings | 815 | 787 | 421 | ||||||
| Repayment of borrowings | (767 | ) | (1,333 | ) | (1,288 | ) | |||
| Finance costs paid | (138 | ) | (172 | ) | (251 | ) | |||
| Bond settlement premium, RCF and bond transaction costs | — | (30 | ) | (61 | ) | ||||
| Dividends paid | (58 | ) | (15 | ) | (5 | ) | |||
| Net cash inflow (outflow) from financing activities from continuing operations | (148 | ) | (763 | ) | (1,184 | ) | |||
| Net cash inflow (outflow) from financing activities from discontinued operations | — | — | (2 | ) | |||||
| Net cash inflow (outflow) from financing activities | (148 | ) | (763 | ) | (1,186 | ) | |||
| Net increase (decrease) in cash and cash equivalents | (13 | ) | (279 | ) | 33 | ||||
| Translation | 3 | 10 | (17 | ) | |||||
| Cash and cash equivalents at beginning of year | 215 | 484 | 468 | ||||||
| Cash and cash equivalents at end of year | 22 | 205 | 215 | 484 | |||||
ANGLOGOLD ASHANTI LIMITED
Group – statement of changes in equity
FOR THE YEARS ENDED December 31, December 2017, 20162020, 2019 and 20152018
| Equity holders of the parent | ||||||||||||||||||||||||||||||||
| Figures in millions | Share capital and premium | Other capital reserves(1) | Retained earnings (Accumulated losses)(2) | Fair value through OCI | Actuarial gains (losses) | Foreign currency translation reserve (3) | Total | Non- controlling interests | Total equity | |||||||||||||||||||||||
| US Dollars | ||||||||||||||||||||||||||||||||
| Balance at 31 December 2017 | 7,134 | 124 | (3,349) | 33 | (16) | (1,263) | 2,663 | 41 | 2,704 | |||||||||||||||||||||||
| Profit (loss) for the year | — | — | 133 | — | — | — | 133 | 17 | 150 | |||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | 5 | 4 | (150) | (141) | — | (141) | |||||||||||||||||||||||
| Total comprehensive income (loss) | — | — | 133 | 5 | 4 | (150) | (8) | 17 | 9 | |||||||||||||||||||||||
| Shares issued | 37 | — | — | — | — | — | 37 | — | 37 | |||||||||||||||||||||||
| Share-based payment for share awards net of exercised | — | (17) | — | — | — | — | (17) | — | (17) | |||||||||||||||||||||||
| Dividends paid (note 14) | — | — | (24) | — | — | — | (24) | — | (24) | |||||||||||||||||||||||
| Dividends of subsidiaries | — | — | — | — | — | — | — | (15) | (15) | |||||||||||||||||||||||
| Transfer of gain on disposal of equity investments | — | — | 1 | (1) | — | 0 | — | 0 | ||||||||||||||||||||||||
| Translation | — | (11) | 12 | — | — | — | 1 | (1) | 0 | |||||||||||||||||||||||
| Balance at 31 December 2018 | 7,171 | 96 | (3,227) | 37 | (12) | (1,413) | 2,652 | 42 | 2,694 | |||||||||||||||||||||||
| Profit (loss) for the year | — | — | (12) | — | — | — | (12) | 5 | (7) | |||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | 8 | 2 | 4 | 14 | — | 14 | |||||||||||||||||||||||
| Total comprehensive income (loss) | — | — | (12) | 8 | 2 | 4 | 2 | 5 | 7 | |||||||||||||||||||||||
| Shares issued | 28 | — | — | — | — | — | 28 | — | 28 | |||||||||||||||||||||||
| Share-based payment for share awards net of exercised | — | (10) | — | — | — | — | (10) | — | (10) | |||||||||||||||||||||||
| Dividends paid (note 14) | — | — | (27) | — | — | — | (27) | — | (27) | |||||||||||||||||||||||
| Dividends of subsidiaries | — | — | — | — | — | — | — | (16) | (16) | |||||||||||||||||||||||
| Transactions with non-controlling interests | — | (4) | — | — | — | — | (4) | 4 | 0 | |||||||||||||||||||||||
| Translation | — | 1 | (2) | — | — | — | (1) | 1 | 0 | |||||||||||||||||||||||
| Balance at 31 December 2019 | 7,199 | 83 | (3,268) | 45 | (10) | (1,409) | 2,640 | 36 | 2,676 | |||||||||||||||||||||||
| Profit (loss) for the year | — | — | 953 | — | — | — | 953 | 18 | 971 | |||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | 92 | 10 | 22 | 124 | — | 124 | |||||||||||||||||||||||
| Total comprehensive income (loss) | — | — | 953 | 92 | 10 | 22 | 1,077 | 18 | 1,095 | |||||||||||||||||||||||
| Shares issued | 15 | — | — | — | — | — | 15 | — | 15 | |||||||||||||||||||||||
| Share-based payment for share awards net of exercised | — | (3) | — | — | — | — | (3) | — | (3) | |||||||||||||||||||||||
| Dividends paid (note 14) | — | — | (38) | — | — | — | (38) | — | (38) | |||||||||||||||||||||||
| Dividends of subsidiaries | — | — | — | — | — | — | — | (9) | (9) | |||||||||||||||||||||||
| Recognition of joint operation | 4 | 4 | 4 | |||||||||||||||||||||||||||||
| Transfer on disposal and derecognition of equity investments | — | — | 6 | (6) | — | — | 0 | — | 0 | |||||||||||||||||||||||
| Translation | — | (3) | 2 | — | 1 | — | 0 | — | 0 | |||||||||||||||||||||||
| Balance at 31 December 2020 | 7,214 | 77 | (2,341) | 131 | 1 | (1,387) | 3,695 | 45 | 3,740 | |||||||||||||||||||||||
(1)Other capital reserves include a surplus on disposal of Company shares held by companies prior to the formation of AngloGold Ashanti Limited of $10m (2019: $10m; 2018: $10m), surplus on equity transaction of joint venture of $36m (2019: $36m; 2018: $36m), equity items for share-based payments of $33m (2019: $39m; 2018:$48m) and other reserves.
(2)Included in accumulated losses are retained earnings totalling $391m (2019: $378m; 2018: $283m) arising at the equity accounted investments and certain subsidiaries which may not be remitted without third party consent.
(3) Foreign currency translation reserve includes a loss of $101m relating to the sale of the South African operations that will not re-cycle through the Income statement. Of the remaining balance, a loss of $1,295m relates to further balances that will not re-cycle through the Income statement on disposal of the non-foreign operations, and a gain of $9m relating to the foreign operations that will re-cycle through the Income statement on disposal, (refer to note 1).
| Equity holders of the parent | ||||||||||||||||||||
| Figures in millions | Share capital and premium | Other capital reserves(1) | Retained earnings (Accumulated losses)(2) | Cash flow hedge reserve(3) | Available- for-sale reserve(4) | Actuarial gains (losses) | Foreign currency translation reserve | Total | Non- controlling interests | Total equity | ||||||||||
| US Dollars | ||||||||||||||||||||
| Balance at 31 December 2014 | 7,041 | 132 | (3,109 | ) | (1 | ) | 17 | (40 | ) | (1,195 | ) | 2,845 | 26 | 2,871 | ||||||
| Profit (loss) for the year | (85 | ) | (85 | ) | 15 | (70 | ) | |||||||||||||
| Other comprehensive income (loss) | 1 | (7 | ) | 14 | (371 | ) | (363 | ) | (363 | ) | ||||||||||
| Total comprehensive income (loss) | — | 1 | (85 | ) | — | (7 | ) | 14 | (371 | ) | (448 | ) | 15 | (433 | ) | |||||
| Shares issued | 25 | 25 | 25 | |||||||||||||||||
| Share-based payment for share awards net of exercised | 8 | 8 | 8 | |||||||||||||||||
| Dividends of subsidiaries | — | (4 | ) | (4 | ) | |||||||||||||||
| Translation | (24 | ) | 20 | (3 | ) | 7 | — | — | ||||||||||||
| Balance at 31 December 2015 | 7,066 | 117 | (3,174 | ) | (1 | ) | 7 | (19 | ) | (1,566 | ) | 2,430 | 37 | 2,467 | ||||||
| Profit (loss) for the year | 63 | 63 | 17 | 80 | ||||||||||||||||
| Other comprehensive income (loss) | 9 | (2 | ) | 180 | 187 | 187 | ||||||||||||||
| Total comprehensive income (loss) | — | — | 63 | — | 9 | (2 | ) | 180 | 250 | 17 | 267 | |||||||||
| Shares issued | 42 | 42 | 42 | |||||||||||||||||
| Share-based payment for share awards net of exercised | (7 | ) | (7 | ) | (7 | ) | ||||||||||||||
| Dividends of subsidiaries | — | (15 | ) | (15 | ) | |||||||||||||||
| Transfer to reserves | (2 | ) | 2 | — | — | |||||||||||||||
| Translation | 7 | (6 | ) | 1 | (2 | ) | — | — | ||||||||||||
| Balance at 31 December 2016 | 7,108 | 117 | (3,119 | ) | (1 | ) | 17 | (21 | ) | (1,386 | ) | 2,715 | 39 | 2,754 | ||||||
| Profit (loss) for the year | (191 | ) | (191 | ) | 20 | (171 | ) | |||||||||||||
| Other comprehensive income (loss) | 25 | 6 | 123 | 154 | 154 | |||||||||||||||
| Total comprehensive income (loss) | — | — | (191 | ) | — | 25 | 6 | 123 | (37 | ) | 20 | (17 | ) | |||||||
| Shares issued | 26 | 26 | 26 | |||||||||||||||||
| Share-based payment for share awards net of exercised | (1 | ) | (1 | ) | (1 | ) | ||||||||||||||
| Dividends paid (note 13) | (39 | ) | (39 | ) | (39 | ) | ||||||||||||||
| Dividends of subsidiaries | — | (19 | ) | (19 | ) | |||||||||||||||
| Translation | 9 | (10 | ) | 1 | (1 | ) | (1 | ) | 1 | — | ||||||||||
| Balance at 31 December 2017 | 7,134 | 125 | (3,359 | ) | (1 | ) | 43 | (16 | ) | (1,263 | ) | 2,663 | 41 | 2,704 | ||||||
F - 11
ANGLOGOLD ASHANTI LIMITED
Notes to the consolidated financial statements
FOR THE YEARS ENDED 31 December, 2017, 20162020, 2019 and 20152018
1 ACCOUNTING POLICIES
Statement of compliance
The consolidated and companyCompany financial statements are prepared in compliance with International Financial Reporting Standards (IFRS) and Interpretations of those standards, as issued by the International Accounting Standards Board (IASB) in the English language, the South African Institute of Chartered Accountants, SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, JSE Listings Requirements and in the manner required by the South African Companies Act, 2008.
New standards and interpretations issued
The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period on 1 January 2017.2020. The adoption of the new standards, interpretations and amendments effective from 1 January 20172020 had no material impact on the group.
AngloGold Ashanti assesses the significance of new standards, interpretations and amendments to standards in issue that are not yet adopted but are likely to affect the financial reporting in future years.
We have identified that IFRS 15 “Revenue from Contractsthe IAS 16 "Property, Plant and Equipment", amendment "Property, Plant and Equipment—Proceeds before Intended Use" issued by the IASB in May 2020 with Customers” and IFRS 9 “Financial Instruments”, both of which have an effective date of 1 January 2018, are2022, is likely to affect the financial reporting in future financial reporting.years.
The amendment prohibits deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost of producing those items, in profit or loss. An entity applies the amendments retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applies the amendment. Management has assessedis assessing the potential impact of IFRS 15the amendment will have on the group.
Interest Rate Benchmark Reform - Phase 2 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
The Amendments are effective for annual periods beginning on or after 1 January 2021, with early application permitted. The Amendments focus on the effects on financial statements when an entity replaces the old interest rate benchmark with an alternative benchmark rate as a consequence of the global regulatory reform of key interbank offered rates (IBORs). The group has IBOR linked borrowings and concludedis in the process of identifying and negotiating with bank syndicates, new reference rates on the IBOR linked borrowings, including the consideration of the Secured Overnight Financing Rate which is the recommended USD LIBOR alternative. Refer to note 26 for details of IBOR linked borrowings.
Restatement of prior year disclosures
Statement of comprehensive Income
During 2020, the group completed the sale of its South African operations, including several South African subsidiaries. As a result of the sale, the Foreign Currency Translation Reserve (FCTR) balance was reassessed. It was determined that the FCTR, which had originated from non-foreign operations would not recycle through the income statement. Non-foreign operations are those entities with the same functional currency (ZAR) as the AngloGold Ashanti Limited parent company, which is different to the group does not sell product based on multiple-element arrangements and it does not sell product onpresentation currency (USD). IAS 21 is silent regarding such a provisionalsituation where a subsidiary is partially or variable pricing basis and as such the new standard does not havefully disposed of resulting in a significant impact on the timingpartial or amountfull release of the group’s revenue recognition. However,FCTR associated with the adoptionsubsidiary. The statement of IFRS 15comprehensive income previously disclosed all foreign currency translation differences as “Items that will be reclassified subsequently to profit or loss”. As a result inof the presentation of by-product revenue in Revenue from product sales where previously by-product revenue was included in cost of sales. Revenue from product sales includes gold incomereassessment, the FCTR has been split between “Items that will be reclassified subsequently to profit or loss” and by-product revenue. This change in classification results in a corresponding increase in costs of sales, and therefore“Items that will not be reclassified subsequently to profit or loss”. The comparatives have an impact on previously reported gross profit.been restated to include the revised disclosure.
F - 12
| U S Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Revenue | 4,543 | 4,254 | 4,174 | |||||
| Gold income | 4,356 | 4,085 | 4,015 | |||||
| Cost of sales | (3,582 | ) | (3,263 | ) | (3,294 | ) | ||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 10 | 19 | (7 | ) | ||||
| Gross profit | 784 | 841 | 714 | |||||
| Gross profit % | 18.00 | % | 20.59 | % | 17.78 | % | ||
| U S Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Revenue | 4,543 | 4,254 | 4,174 | |||||
| Revenue from product sales | 4,510 | 4,223 | 4,142 | |||||
| Cost of sales | (3,736 | ) | (3,401 | ) | (3,421 | ) | ||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 10 | 19 | (7 | ) | ||||
| Gross profit | 784 | 841 | 714 | |||||
| Gross profit % | 17.38 | % | 19.91 | % | 17.24 | % | ||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The group’s financial assets include debt instruments (held to maturity bonds and negotiable certificatesrestatement has no impact on reported totals in the statement of deposit), cash restrictedcomprehensive income of profit (loss) for use and cash and cash equivalents which will be subject to IFRS 9 expected credit loss model as they are to be carried at amortised cost. The accounting policy for listed equity investments will depend on the nature of the listed investment. Listed equity investments which are held to meet rehabilitation liabilities in future will be classified as fair value through profit and loss. Listed equity investments held for other purposes will be classified as fair value throughperiod; other comprehensive income. Financial liabilities are currently carried at amortised cost with no requirements to change their recognitionincome (loss) for the period, net of tax; total comprehensive income (loss) for the period, net of tax; or presentation under IFRS 9. We have evaluatedon earnings per share or headline earnings per share for the possible impactperiod.
| Figures in millions | 2019 | 2018 | ||||||||||||||||||
| US Dollars | As previously reported | Adjustments | Restated | As previously reported | Adjustments | Restated | ||||||||||||||
| Profit (loss) for the period | (7) | 0 | (7) | 150 | 0 | 150 | ||||||||||||||
| Items that will be reclassified subsequently to profit or loss: | ||||||||||||||||||||
| Exchange differences on translation of foreign operations | 4 | (4) | 0 | (150) | 100 | (50) | ||||||||||||||
| Items that will not be reclassified subsequently to profit or loss: | 10 | 4 | 14 | 9 | (100) | (91) | ||||||||||||||
| Exchange differences on translation of non-foreign operations | 0 | 4 | 4 | 0 | (100) | (100) | ||||||||||||||
| Net gain on equity investments | 6 | 0 | 6 | 9 | 0 | 9 | ||||||||||||||
| Actuarial gain recognised | 2 | 0 | 2 | 5 | 0 | 5 | ||||||||||||||
| Deferred taxation thereon | 2 | 0 | 2 | (5) | 0 | (5) | ||||||||||||||
| Other comprehensive (loss) income for the period, net of tax | 14 | 0 | 14 | (141) | 0 | (141) | ||||||||||||||
| Total comprehensive income (loss) for the period, net of tax | 7 | 0 | 7 | 9 | 0 | 9 | ||||||||||||||
F - 13
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The significant accounting principles applied in the presentation of the group annual financial statements are set out below.
1.1 BASIS OF PREPARATION
The financial statements are prepared according to the historical cost convention, except for the revaluation of certain financial instruments to fair value. The group’s accounting policies as set out below are consistent in all material respects with those applied in the previous year.
The group financial statements are presented in US dollars.
The group financial statements incorporate the financial statements of the company,Company, its subsidiaries and its interests in joint ventures and associates. The financial statements of all material subsidiaries, the Environmental Rehabilitation Trust Fund, joint ventures and associates, are prepared for the same reporting period as the holding company, using the same accounting policies.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Control would generally exist where the group owns more than 50% of the voting rights, unless the group and other investors collectively control the entity where they must act together to direct the relevant activities. In such cases, as no investor individually controls the entity the investment is accounted for as an equity method investmentassociate, joint venture or a joint operation. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are de-consolidateddeconsolidated from the date on which control ceases. The group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.
Intra-group transactions, balances and unrealised gains and losses on transactions between group companies, including any resulting tax effecteffects are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
1.2 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
Use of estimates
The preparation of the financial statements requires the group’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience, current and expected economic conditions, and in some cases actuarial techniques. Actual results could differ from those estimates.
The more significant areas requiring the use of management estimates and assumptions relate to Ore Reserve that are the basis of future cash flow estimates and unit-of-production depreciation, depletion and amortisation calculations; environmental, reclamation and closure obligations; asset impairments/reversals (including impairments of goodwill); production start date; recoverability of indirect taxes; recoverability of deferred tax assets; and write-downs of inventory to net realisable value. Other estimates include employee benefit liabilities, and unrecognised tax positions.positions and deferred compensation assets.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The uncertainty of the impact of the COVID-19 pandemic on the global economy and on the group has been considered in judgements made and in the key assumptions used in management's estimates. Key assumptions include items such as commodity prices, exchange rates and changes in interest rates.
The judgements that management has applied in the application of accounting policies, and the estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Carrying value of tangible assets
Amortisation
The majority of mining assets are amortised using the units-of-production method where the mine operating plan calls for production from a well-defined proved and probable Ore Reserve.
F - 14
For other tangible assets, the straight-line method is applied over the estimated useful life of the asset which does not exceed the estimated mine life based on proved and probable Ore Reserve as the useful lives of these assets are considered to be limited to the life of the relevant mine.
The calculation of the units-of-production rate of amortisation could be impacted to the extent that actual production in the future is different from current forecast production based on proved and probable Ore Reserve. This would generally arise when there are significant changes in any offrom the factors or assumptions used in estimating Ore Reserve.following factors:
•changes in proved and probable Ore Reserve;
•the grade of Ore Reserve, may vary significantly from time to time;
•differences between actual commodity prices and commodity price assumptions;
•unforeseen operational issues at mine sites; and
•changes in capital, operating, mining, processing and reclamation costs, discount rates and foreign exchange rates.
Changes in proved and probable Ore Reserve could similarly impact the useful lives of assets amortised on the straight-line method, where those lives are limited to the life of the mine.
Stripping costs
The group has a number of surface mining operations that are in the production phase for which production stripping costs are incurred. The benefits that accrue to the group as a result of incurring production stripping costs include (a) ore that can be used to produce inventory and (b) improved access to further quantities of material that will be mined in future periods.
The production stripping costs relating to improved access to further quantities of material in future periods are capitalised as a stripping activity asset, if and only if, all of the following are met:
•It is probable that the future economic benefit (improved access to the orebody) associated with the stripping activity will flow to the group;
•The group can identify the component of the orebody for which access has been improved; and
•The costs relating to the stripping activity associated with that component or components can be measured reliably.
Components of the various orebodies at the operations of the group are determined based on the geological areas identified for each of the orebodies and are reflected in the Ore Reserve reporting of the group. In determining whether any production stripping costs should be capitalised as a stripping activity asset, the group uses three operational guidance measures; two of which relate to production measures, while the third relates to an average stripping ratio measure.
Once determined that any portion of the production stripping costs should be capitalised, the group determines the amount of the production stripping costs that should be capitalised with reference to the average mine costs per tonne of the component and the actual waste tonnes that should be deferred. Stripping activity assets are amortised on the units-of-production method based on the Ore Reserve of the component or components of the orebody to which these assets relate.
This accounting treatment is consistent with that for stripping costs incurred during the development phase of a pit, before production commences, except that stripping costs incurred during the development phase of a pit, before production commences, are amortised on the units-of-production method based on the Ore Reserve of the pit.
Deferred stripping costs are included in ‘Mine development costs’, within tangible assets. These costs form part of the total investment in the relevant cash-generating unit, which is reviewed for impairment if events or a change in circumstances indicate that the carrying value may not be recoverable. Amortisation of stripping activity assets is included in operating costs.cost of sales.
Impairment
The group reviews and tests the carrying value of tangible assets when events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable cash flows are largely independent of cash flows of other assets, which is generally at the individual mine level. If there are indications that impairment may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could materially change over time and impact the recoverable amounts. The cash flows and value in use are significantly affected by a number of factors including published reserves, resources,Ore Reserve, Mineral Resource, exploration potential and production estimates, together with economic factors such as spot and future metal prices, discount rates, foreign currency exchange rates, estimates of costs to produce reservesOre Reserve and future capital expenditure. At the reporting date the group assesses whether any of the indicators which gave rise to previously recognised impairments have changed such that the impairment loss no longer exists or may have decreased. The impairment loss is then assessed on the original factors for reversal and if indicated, such reversal is recognised.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
The recoverable amount is estimated based on the positive indicators. If an impairment loss has decreased, the carrying amount is recorded at the recoverable amount as limited in terms of IAS 36.36 Impairment of Assets.
F - 15
The carrying value of tangible assets at 31 December 20172020 was $3,742m (2016: $4,111m; 2015: $4,058m)$2,884m (2019: $2,592m; 2018: $3,381m). The impairment and derecognition of tangible assets recognised in the consolidated financial statements for the year ended 31 December 20172020 (including impairment of tangible assets transferred to held for sale) was $288m (2016: $3m; 2015: $5m)NaN (2019: $505m; 2018: $104m).
Production start date
The group assesses the stage of each mine construction project to determine when a project moves into the production stage. The criteria used to assess the start date are determined by the unique nature of each mine construction project and include factors such as the complexity of a plant and its location. The group considers various relevant criteria to assess when the construction project is substantially complete and ready for its intended use and moves into the production stage. The criteria used in the assessment would include, but are not limited to the following:
•the level of capital expenditure compared to the construction cost estimates;
•completion of a reasonable period of testing of the constructed asset;
•adequacy of stope face;
•ability to produce metals in saleable form (within specifications); and
•ability to sustain ongoing production of metal.
When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for capitalisable costs related to mining asset additions or improvements, underground mine development, deferred stripping activities, or Ore Reserve development.
Phase 1 of the Obuasi mine re-development project moved into the production stage on 1 October 2020 when it was determined that the Phase 1 assets were capable of operating in the manner intended by management.
Development expenditure
Development activities commence after project sanctioning by the appropriate level of management. Judgement is applied by management in determining when a project has reached a stage at which economically recoverable reserves exist such that development may be sanctioned. In exercising this judgement, management is required to make certain estimates and assumptions that may change as new information becomes available. If, after having started the development activity, a judgement is made that a development asset is impaired, the appropriate amount will be written off to the income statement. Capitalised development costs are included as assets under construction and mine development costs in tangible assets, refer note 15.
Carrying value of goodwill and intangible assets
Where an investment in a subsidiary, joint venture or an associate is made, any excess of the consideration transferred over the fair value of the attributable Mineral Resource including value beyond proved and probable Ore Reserve, exploration properties and net assets is recognised as goodwill.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
An individual operating mine is not a typical going-concern business because of the finite life of its reserves.Ore Reserve. The allocation of goodwill to an individual mine will result in an eventual goodwill impairment due to the wasting nature of the mine reporting unit. In accordance with the provisions of IAS 36, “Impairment of Assets”, the group performs its annual impairment review of assigned goodwill during the fourth quarter of each year.year, refer to note 15 for impairment assumptions.
The carrying value of goodwill in the consolidated financial statements at 31 December 20172020 was $127m (2016: $126m; 2015: $126m)$126m (2019: $116m; 2018: $116m). TheNaN impairment of goodwill was recognised in the consolidated financial statements for the yearyears ended 31 December 2017 was $9m (2016: nil; 2015: nil).2020, 2019 and 2018.
Income taxes
The group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the worldwide provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different
F - 16
from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
The group recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the group to realise the net deferred tax assets recorded at the reporting date could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the group operates could limit the ability of the group to obtain tax deductions in future periodsperiods.
Carrying values of the group at 31 December 2017:2020:
•deferred tax asset: $4m (2016: $4m; 2015: $1m);$7m (2019: $105m; 2018:NaN );
•deferred tax liability: $363m (2016: $496m; 2015: $514m)$246m (2019: $241m; 2018: $315m);
•taxation liability: $53m (2016: $111m; 2015: $91m)$153m (2019: $72m; 2018: $60m); and
•taxation asset: $3m (2016: $14m; 2015: $27m).$14m (2019: $10m; 2018: $6m), included in trade, other receivables and other assets; and
Provision for environmental rehabilitation obligations
The group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The group recognises management’s best estimate for decommissioning and restoration obligations in the period in which they are incurred. Future changes to environmental laws and regulations, technology, life of mine estimates, inflation rates, foreign currency exchange rates and discount rates could affect the carrying amount of this provision.
The carrying amount of the rehabilitation obligations (including held for sale rehabilitation obligations) for the group at 31 December 20172020 was $724m (2016: $705m; 2015: $683m)$674m (2019: $730m; 2018: $637m).
Stockpiles and metals in process
Costs that are incurred in or benefit the production process are accumulated in stockpiles and metals in process values. Net realisable value tests are performed at least annually and represent the estimated future sales price of the product, based on prevailing and long termlong-term metals prices, less estimated costs to complete production and bring the product to sale.
Surface and underground stockpiles and metals in process are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained ounces based on assay data, and the estimated recovery percentage based on the expected processing method. Stockpile ore tonnages are verified by periodic surveys.
Although the quantities of recoverable metal are reconciled by comparing the grades of ore to the quantities of metals actually recovered (metallurgical balancing), the nature of the process inherently limits the ability to precisely monitor recoverability levels. As a result, the metallurgical balancing process is constantly monitored and engineering estimates are refined based on actual results over time.
Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realisable value are accounted for on a prospective basis.
The carrying value of inventories (excluding finished goods and mine operating supplies) for the group at 31 December 20172020 was $424m (2016: $397m; 2015: $393m)$382m (2019: $377m; 2018: $404m).
Recoverable tax, rebates, levies and duties
In a number of countries, particularly in Continental Africa and Argentina, AngloGold Ashanti is due refunds of indirect tax which remain outstanding for periods longer than those provided for in the respective statutes.statutes refer note 22.
In addition, AngloGold Ashanti has unresolved non-income tax disputes in a number of countries, particularly in Continental Africa and in Brazil.Brazil and Argentina. If the outstanding input taxes are not received and the taxthese disputes are not resolved in a manner favourable to AngloGold Ashanti, it could have a material adverse effect upon the carrying value of these assets.assets and our results of operations.
F - 17
The net carrying value of recoverable tax, rebates, levies and duties for the group at 31 December 20172020 was $174m (2016: $135m; 2015: $94m)$281m (2019: $227m; 2018: $194m).
Post-retirement obligations
The determination of AngloGold Ashanti’sthe group’s obligation and expense for post-retirement liabilities depends on the selection of certain assumptions used by actuaries to calculate amounts. These assumptions include, among others, the discount rate, the expected long-term rate of return of plan assets, health care inflation costs, rates of increase in compensation costs and the number of employees who reach retirement age before the mine reaches the end of its life. While AngloGold Ashanti believes that these assumptions are appropriate, significant changes in the assumptions may materially affect post-retirement obligations as well as future expenses, which may result in an impact on earnings in the periods that the changes in these assumptions occur.
The carrying value of the post-retirement plansobligations at 31 December 20172020 was $122m (2016: $118m; 2015: $89m)$83m (2019: $100m; 2018: $100m).
Ore Reserve estimates
An Ore Reserve estimate is an estimate of the amount of product that can be economically and legally extracted from the group’s properties. In order to calculate the Ore Reserve, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, grades, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.
Estimating the quantity and/or grade of the Ore Reserve requires the size, shape and depth of orebodies to be determined by analysing geological data such as the logging and assaying of drill samples. This process may require complex and difficult geological judgements and calculations to interpret the data.
The group is required to determine and report its Ore Reserve in accordance with the minimum standards described by the South African Code for the reporting of Exploration Results, Mineral Resources and Mineral Reserves (The SAMREC Code)Code, 2016 Edition.Edition).
Because the economic assumptions used to estimate changes in the Ore Reserve from period to period, and because additional geological data is generated during the course of operations, estimates of the Ore Reserve may change from period to period. Changes in the reported Ore Reserve may affect the group’s financial results and financial position in a number of ways, including the following:
•asset carrying values may be affected due to changes in estimated future cash flows;
•depreciation, depletion and amortisation charged in the income statement may change where such charges are determined by the units-of-production method, or where the useful economic lives of assets change;
•overburden removal costs, including production stripping activities, recorded on the statement of financial position or charged in the income statement may change due to changes in stripping ratios or the units-of-production method of depreciation;
•decommissioning site restoration and environmental provisions may change where changes in the estimated Ore Reserve affect expectations about the timing or cost of these activities; and
•the carrying value of deferred tax assets may change due to changes in estimates of the likely recovery of the tax benefits.
Provision for silicosis
Significant judgement is applied in estimating the costs that will be incurred to settle the silicosis class action claims and related expenditure.Theexpenditure. The final costs may differ from current cost estimates. The provision is based on actuarial assumptions including:
•silicosis prevalence rates;
•estimated settlement per claimant;
•benefit take-up rates;
•disease progression rates;
•timing of cashflows; and
•discount rate.
Management believes the assumptions are appropriate, however changes in the assumptions may materially affect the provision and final costs of settlement. In prior years, a silicosis provision was not raised as a reliable estimate could not be determined.
The carrying value of the silicosis provision at 31 December 20172020 was $63m (2016: nil; 2015: nil)$61m (2019: $65m; 2018: $63m).
Identification, classification and disposal of discontinued operations held for sale
During 2019, the decision to sell the remaining South African operations was made, judgement was applied regarding classification of the disposal group as held for sale at year end, and whether the disposal group should be classified as a
F - 18
discontinued operation. The South African asset sale was assessed as a major geographical area of operations and part of a single co-ordinated plan to dispose of a major geographical area of operations and accordingly, it was classified as a discontinued operation. The sale was announced on 12 February 2020 and closed on 30 September 2020. The fair value less costs to sell of the held for sale disposal group at date of sale is included in note 9.
As a consequence of the sale, a deferred compensation asset was recognised. The deferred compensation asset is included at fair value in level 3 of the fair value hierarchy. Management used a probability weighted discounted cash flow model to measure the deferred compensation asset. The significant inputs and assumptions used in the discounted cash flow calculation, included the production plan over the deferred compensation period and the weighted average cost of capital. Details of the valuation, including a sensitivity assessment, are included in note 35.
The carrying value of the deferred compensation asset at 31 December 2020 was $28m.
Contingencies
By their nature, contingencies will only be resolved when one or more future events occur or fail to occur. The assessment of such contingencies inherently involves the exercise of significant judgement and estimates of the outcome of future events. Such contingencies include, but are not limited to environmental obligations, litigation, regulatory proceedings, tax matters and losses resulting from other events and developments. Refer note 12 for tax uncertainties and contingencies and note 34 for litigation claims and other contingencies.
In determining the threshold for disclosure on a qualitative and quantitative basis, management considers the potential for a disruptive effect on the normal functioning of the group and/or whether the contingency could impact investment decisions. Such qualitative matters considered are reputational risks, regulatory compliance issues and reasonable investor considerations. For quantitative purposes, an amount of $18m has been considered.
As a global company, the group is exposed to numerous legal risks. The outcome of currently pending and future proceedings cannot be predicted with certainty. Litigation and other judicial proceedings as a rule raise difficult and complex legal issues and are subject to uncertainties and complexities including, but not limited to, the facts and circumstances of each particular case, issues regarding the jurisdiction in which each suit is brought and differences in applicable law. Upon resolution of any pending legal matter, the group may be forced to incur charges in excess of the presently established provisions and related insurance coverage. It is possible that the financial position, results of operations or cash flows of the group could be materially affected by the unfavourable outcome of litigation.
COVID-19 pandemic
AngloGold Ashanti recognises that all our stakeholders have a direct and material interest in the way in which we, as a business, prepare for and respond to COVID-19 at our operations, in our communities and in the regions and countries in which we operate. We are guided by our values and a pledge to protect the health of our employees and host communities, while working to ensure business continuity.
The group has worked alongside authorities and key stakeholders in each operating country to assist public health efforts and to help slow the spread of the virus. Measures have been taken to help protect the well-being of our employees and communities.
AngloGold Ashanti continues to respond to the evolving COVID-19 pandemic while contributing to the global effort to stop the spread of the virus and provide public health and economic relief to local communities. The Company has taken a number of proactive steps to protect employees, host communities and the business itself. These initiatives have complemented government responses in each of its operating jurisdictions. Our thoughts and prayers are with the families, colleagues and loved ones of those who have been impacted by the virus.
As of the end of March 2021, second waves of the outbreak are being experienced in several of our operating jurisdictions, coinciding with the prevalence of new, more contagious variants of the virus. As with the first wave, the increase in cases is being countered by government-imposed movement restrictions, including mandatory isolation and quarantine measures. Continued diligence is being observed to strict health protocols and vigilance in relation to business continuity including supply chain. We remain mindful that the COVID-19 pandemic, its impacts on communities and economies, and the actions authorities may take in response to it, are subject to change in response to current conditions.
F - 19
1.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Equity-accounted investments
Joint ventures
A joint venture is an entity in which the group holds a long termlong-term interest and which the group and one or more other ventures jointly control under a contractual arrangement, that provides for strategic, financial and operating policy decisions relating to the activities requiring unanimous consent of the parties sharing control. The group’s interests in joint arrangements classified as joint ventures are accounted for using the equity method.
Profits and losses realised in connection with transactions between the group and joint ventures are eliminated in proportion to share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial position amount and released in the group accounts when the assets are effectively realised outside the group. Dividends received from joint ventures are included in operating activities in the cash flow statement.
Associates
The equity method of accounting is used for an investmentinvestments over which the group exercises significant influence and normally owns between 20% and 50% of the voting equity. Associates are equity-accounted from the effective date of acquisition to the effective date of disposal.
Profits and losses realised in connection with transactions between the group and associated companies are eliminated in proportion to share ownership. Such profits and losses are deducted from the group’s equity and related statement of financial position amount and released in the group accounts when the assets are effectively realised outside the group. Dividends received from associates are included in investing activities in the cash flow statement.
Joint ventures and associates
If necessary, impairment lossesand impairment reversals on loans and equity are reported under share of joint ventures and associates profit and loss.
Any losses of equity-accounted investments are brought to accountaccounted for in the consolidated financial statements until the investment in such investments is written down to zero. Thereafter, losses are accounted for only insofar as the group is committed to providing financial support to such investees.
The carrying value of equity-accounted investments represents the cost of each investment, including goodwill, balance outstanding on loans advanced if the loan forms part of the net investment in the investee, any impairment losses/ impairment reversals recognised, the share of post-acquisition retained earnings and losses, and any other movements in reserves. The carrying value of equity-accounted investments is reviewed when indicators arise and if any impairment in value/ impairment reversal has occurred; it is recognised in the period in which the impairment arose.
In determining materiality for the disclosure requirements of IFRS 12 “Disclosure of Interest in Other Entities”, management has assessed that amounts representing the carrying value of at least 90% of the investments in associates and joint ventures balances, reported in the statement of financial position, constitute quantitative materiality.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the use of assets and obligations for the liabilities of the arrangement. The group accounts for activities under joint operations by recognising, in relation to the joint operation, the assets it controls and the liabilities it incurs, the expenses it incurs and the revenue from the sale or use of its share of the joint operations output.
Foreign currency translation
Functional currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The functional currency of the parent company is South African Rands.
F - 20
Transactions and balances
Foreign currency transactions are translated into the functional currency using the approximate exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at the reporting period exchange rate of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Group companies
The results and financial position of all group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
•share capital and premium are translated at historical rates of exchange at the reporting date;
•retained earnings are converted at historical average exchange rates;
•assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of
•that statement of financial position;
•income and expenses for each income statement presented are translated at monthly average exchange rates (unless
•this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
• in which case income and expenses are translated at the rates prevailing at the date of the transaction); and
•all resulting exchange differences are recognised in other comprehensive income and presented as a separate
•component of equity (foreign currency translation);translation reserve, or FCTR).
Exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken toaccounted for as other comprehensive income on consolidation. On repayment or realisation permanent loans andof net investments arein foreign operations, the resulting FCTR is recycled from FCTR to the income statement. ForOn disposal of non-foreign operations, where the company,parent’s functional currency, is the exchange differences on such monetary items are reported insame as the company income statement.subsidiary’s, associate’s, joint venture’s or branch’s functional currency, no reclassification of FCTR is required.
Segment reporting
An operating segment is a business activity whose results are regularly reviewed by the chief operating decision maker (CODM) in order to make decisions about resources to be allocated to it and to assess its performance and for which discrete financial information is available. The chief operating decision maker has been determined to beexecutive officer and the Executive Committee.executive committee are collectively identified as the CODM.
Tangible assets
Tangible assets are recorded at cost less accumulated amortisation and impairments/reversals. Cost includes pre-production expenditure incurred during the development of a mine and the present value of related future decommissioning costs.
Interest on borrowings relating to the financing of major capital projects under construction is capitalised during the construction phase as part of the cost of the project. Such borrowing costs are capitalised over the period during which the asset is being acquired or constructed and borrowings have been incurred. Capitalisation ceases when construction is interrupted for an extended period or when the asset is substantially complete. Other borrowing costs are expensed as incurred.
Subsequent costs are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the asset will flow to the group, and the cost of the addition can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
To the extent a legal or constructive obligation to a third party exists, the acquisition cost includes estimated costs of dismantling and removing the asset and restoring the site. A change in estimated expenditures for dismantling, removal and restoration is added to or deducted from the carrying value of the related asset. To the extent that the change would result in a negative carrying amount of the related asset, this effect is recognised as income. The change in depreciation charge is recognised prospectively.
For assets amortised on the units-of-production method, amortisation is calculated to allocate the cost of each asset to its residual value over its estimated useful life.
For those assets not amortised on the units-of-production method, amortisation is calculated over their estimated useful life as follows:
•buildings up to life of mine;
•plant and machinery up to life of mine;
•equipment and motor vehicles up to five years;
•computer equipment up to three years; and
F - 21
•leased assets over the shorter of the period of the lease and the useful life of the leased asset.
Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner.
Assets are amortised to residual values. Residual values and useful lives are reviewed, and adjusted if appropriate, at the beginning of each financial year.
Gains and losses on disposals are determined by comparing net sale proceeds with the carrying amount at the date of sale. These are included in the income statement.
Mine development costs
Capitalised mine development costs include expenditure incurred to develop new orebodies, to define further mineralisation in existing orebodies and to expand the capacity of a mine. Mine development costs include acquired proved and probable Ore Reserve at cost at the acquisition date. These costs are amortised from the date on which commercial production begins.the assets are ready for use as intended by management.
Depreciation, depletion and amortisation of mine development costs are computed by the units-of-production method based on estimated proved and probable Ore Reserve. The proved and probable Ore Reserve reflects estimated quantities of reservesOre Reserve which can be recovered economically in the future from known mineral deposits.
Capitalised mine development costs also include stripping activity assets relating to production stripping activities incurred in the production phase of open-pit operations of the group. Once determined that any portion of the production stripping costs should be capitalised, the group determines the average mine costs per tonne of the component and the waste tonnes to which the production stripping costs relate to determine the amount of the production stripping costs that should be capitalised. Stripping activity assets are amortised on a units-of-production method based on the Ore Reserve of the component of the orebody to which these assets relate.
The average mine cost per tonne of the component is calculated as the total expected costs to be incurred to mine the relevant component of the orebody, divided by the number of tonnes expected to be mined from the component. The average mine cost per tonne of the component to which the stripping activity asset relates are recalculated annually in the light of additional knowledge and changes in estimates.
Mine infrastructure
Mine plant facilities, including decommissioning assets, are amortised using the lesser of their useful life or units-of-production method based on estimated proved and probable Ore Reserve.
Land and assets under construction
Land and assets under construction are not depreciated and are measured at historical cost less impairments.
Mineral rights and dumps
Mineral rights are amortised using the units-of-production method based on the estimated proved and probable Ore Reserve. Dumps are amortised over the period of treatment.
Exploration and evaluation assets
All pre-license and exploration costs, including geological and geographical costs, labour, Mineral Resource and exploratory drilling cost, are expensed as incurred, until it is concluded that a future economic benefit will more likely than not be realised. In evaluating if expenditures meet this criterion to be capitalised, several different sources of information are used depending on the level of exploration. While the criterion for concluding that expenditure should be capitalised is always probable, the information used to make that determination depends on the level of exploration:
•Costs on greenfields sites, being those where the group does not have any mineral deposits which are already being mined or developed under the planned method of extraction, are expensed as incurred until the group is able to demonstrate that future economic benefits are probable, which generally will be the establishment of proved and probable Ore Reserve at this location;
•Costs on brownfields sites, being those adjacent to mineral deposits which are already being mined or developed under the planned method of extraction, are expensed as incurred until the group is able to demonstrate that future economic benefits are probable, which generally will be the establishment of increased inclusive proved and probable Ore Reserve, after which the expenditure is capitalised as a mine development cost; and
F - 22
•Costs relating to extensions of mineral deposits, which are already being mined or developed, including expenditure on the definition of mineralisation of such mineral deposits, are capitalised as a mine development cost.
Costs relating to property acquisitions are capitalised within mine development costs.
Goodwill
Where an investment in a subsidiary, joint venture or an associate is made, any excess of the consideration transferred over the fair value of the attributable Mineral Resource including value beyond Proven and Probable Ore Reserves, exploration properties and net assets is recognised as goodwill. Goodwill in respect of subsidiaries is disclosed as goodwill.
Goodwill relating to subsidiaries is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing.
Leases
The group assesses whether a contract is or contains a lease at inception of a contract. The group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less with no purchase option) and leases of low value assets. For these leases, the group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the group uses its incremental borrowing rate. The group applies the IFRS 16 portfolio approach in determining the discount rate for leases. As such a single discount rate has been used for contracts that share similar characteristics. The group has determined that contracts that are denominated in the same currency will use a single discount rate. This rate has been determined using various factors including in-country borrowings as well as other sources of finance. Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices.
Lease payments included in the measurement of the lease liability comprise:
•fixed lease payments (including in-substance fixed payments), less any lease incentives;
•variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
•the amount expected to be payable by the lessee under residual value guarantees;
•the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
•payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is presented separately in the consolidated statement of financial position, allocated to non-current and current liabilities.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
•the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate;
•the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used);
•a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, any initial direct costs and restoration costs as described below. They are subsequently measured at cost less accumulated depreciation and impairment losses.
The lease term is determined as the non-cancellable period of a lease, together with:
•periods covered by an option to extend the lease if the group is reasonably certain to make use of that option; and / or
•periods covered by an option to terminate the lease, if the group is reasonably certain not to make use of that option.
F - 23
Right-of-use assets are depreciated over the shorter period of their estimatedlease term and useful lives andlife of the underlying asset. If a lease term. Finance lease paymentstransfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are allocated using the rate implicitpresented as a separate line in the lease, whichconsolidated statement of financial position.
The group applies IAS 36 Impairment of Assets to determine whether a right-of-use asset is included in finance costs,impaired and the capital repayment, which reduces the liability to the lessor.accounts for any identified impairment loss accordingly.
Non-current assets held for sale and discontinued operations
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as having been met only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.
Tangible assets, right of use assets and intangible assets are not depreciated once classified as held for sale.
A disposal group qualifies as a discontinued operation if it is a component of an entity that either has been disposed of, or is classified as held for sale, and:
•represents a separate major line of business or geographical area of operations;
•is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations; or
•is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss.
Inventories
Inventories are valued at the lower of cost and net realisable value after appropriate allowances for redundant and obsolete items. Cost is determined on the following bases:
•metals in process are valued at the average total production cost at the relevant stage of production;
•gold doré/bullion is valued on an average total production cost method;
•ore stockpiles are valued at the average moving cost of mining and stockpiling the ore. Stockpiles are classified as a non-current asset where the stockpile exceeds current processing capacity;
•by-products, which include uranium oxide, silver and sulphuric acid, are valued using an average total production cost method;
•mine operating supplies are valued at average cost; and
•heap leach pad materials are measured on an average total production cost basis.
A portion of the related depreciation, depletion and amortisation charge is included in the cost of inventory. Impairments resulting from a decrease in prices are disclosed in special items,other expenses, all other impairments are included in cost of sales.
Provisions
Provisions are recognised when the group has a present obligation, whether legal or constructive, because of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount to be reimbursed is recognised as a separate asset. Where the group has a joint and several liability with one or more other parties, no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
F - 24
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
Litigation and administrative proceedings are evaluated on a case-by-case basis considering the information available, including that of legal counsel, to assess potential outcomes. Where it is considered probable that an obligation will result in an outflow of resources, a provision is recorded for the present value of the expected cash outflows if these are reasonably measurable. These provisions cover the estimated payments to plaintiffs, court fees and the cost of potential settlements.
Employee benefits
Other post-employment benefit obligations
Some group companies provide post-retirement health care benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting methodology on the same basis as that used for defined benefit pension plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in other comprehensive income immediately. These obligations are valued annually by independent qualified actuaries.
Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The group recognises a liability and expense for termination benefits at the earlier of the following dates: (a) when the entity can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a restructuring that is within the scope of IAS 37 “Provisions,Provisions, Contingent Liabilities and Contingent Assets”Assets and involves the payment of termination benefits. The group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after reporting date are discounted to present value.
Share-based payments
The group’s management awards certain employee bonuses in the form of equity-settled share-based payments on a discretionary basis.
The fair value of the equity instruments granted is calculated at grant date. For transactions with employees, fair value is based on market prices of the equity instruments granted, if available, taking into account the terms and conditions upon which those equity instruments were granted. If market prices of the equity instruments granted are not available, the fair value of the equity instruments granted is estimated using an appropriate valuation model. Vesting conditions, other than market conditions, are not taken into account when estimating the fair value of shares or share options at measurement date.
Over the vesting period, the fair value at measurement date is recognised as an employee benefit expense with a corresponding increase in other capital reserves based on the group’s estimate of the number of instruments that will eventually vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. Vesting assumptions for non-market conditions are reviewed at each reporting date to ensure they reflect current expectations.
When options are exercised or share awards vest, the proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium.
Where the terms of an equity settled award are modified, as a minimum, an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of the modification.
In addition, the group'sgroup’s management awards certain employee bonuses in the form of a cash settled scheme, whereby awards granted are linked to the performance of the company'scompany’s share price. A liability is recognised based upon the grant date fair value and is subsequently remeasured to the closing share price at each reporting date up to the date of vesting. Remeasurements to fair value are recognised in the income statement.
Environmental expenditure
The group has long-term remediation obligations comprising decommissioning and restoration liabilities relating to its past operations which are based on the group’s environmental management plans, in compliance with current environmental and
F - 25
regulatory requirements. Provisions for non-recurring remediation costs are made when there is a present obligation, it is probable that expenditure on remediation work will be required and the cost can be estimated within a reasonable range of possible outcomes. The costs are based on currently available facts, technology expected to be available at the time of the clean-up, laws and regulations presently or virtually certain to be enacted and prior experience in remediation of contaminated sites.
Decommissioning costs
The provision for decommissioning represents the cost that will arise from rectifying damage caused before production commences. Accordingly, a provision and a decommissioning asset is recognised and included within mine infrastructure.
Decommissioning costs are provided at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The unwinding of the decommissioning obligation is included in the income statement. Estimated future costs of decommissioning obligations are reviewed regularly and adjusted as appropriate for new circumstances or changes in law or technology. Changes in estimates are capitalised or reversed against the relevant asset. Estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Gains or losses from the expected disposal of assets are not taken into account when determining the provision.
Restoration costs
The provision for restoration represents the cost of restoring site damage after the start of production. Changes in the provision are recorded in the income statement as a cost of production.
Restoration costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices and adjusted for risks specific to the liability. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money.
Revenue recognition
Revenue is recognised at the fair valuewhen control of the consideration received or receivablegoods passes to the extent that itcustomer and the performance obligations of transferring control have been met. The amount of revenue recognised reflects the consideration to which the entity is probable that economic benefits will flow toentitled in exchange for the groupgoods transferred.
Revenue from product sales comprises sales of:
•refined gold;
•by-products including silver and revenuesulphuric acid; and costs can be reliably measured. The following criteria must also be present:
Revenue from product sales is recognised when the significant risks and rewards of ownership of the products are transferred to the buyer;at a point in time.
Taxation
Deferred taxation is providedrecognised on all qualifying temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are only recognised to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future and future taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date.
Deferred tax assets and liabilities are measured at future anticipated tax rates, which have been enacted or substantively enacted at the reporting date.
Current and deferred tax is recognised as income or expense and included in profit or loss for the period, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different period, in other comprehensive income or directly in equity, or a business combination that is an acquisition.
Current tax is measured on taxable income at the applicable statutory rate enacted or substantively enacted at the reporting date. Interest and penalties, if any, are recognised in the income statement as part of taxation expense.expense if based on the specific facts and circumstances, the entity has determined that the interest (receivable or payable) and penalties payable to the tax authorities are an income tax.
F - 26
Other expenses and income
Items of income and expense, not included in gross profit, that require separate disclosure, in accordance with IAS 1.97, are classified as special itemsare:
•material either quantitatively or qualitatively, or both;
•non-recurring;
•not directly related to current operating or financing activities ; and
•not disclosed separately on the face of the income statement.statement,
•are classified as Other expenses (income) on the face of the income statement
Financial instruments
Financial instruments are initially measuredrecognised at fair value when the group becomes a party to their contractual arrangements. Transaction costs directly attributable to the instrument’s acquisition or issue are included in the initial measurement of financial instruments,assets and financial liabilities, except financial instruments classified as at fair value through profit or loss.loss (FVTPL). The subsequent measurement of financial instruments is dealt with below.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. The group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different. In this case a new financial liability based on the modified terms is recognised at fair value.
Financial assets
On initial recognition, a financial asset is classified as measured at:
•amortised cost;
•Fair value through other comprehensive income (FVTOCI) - equity instruments; or
•FVTPL.
At initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL, are expensed.
A financial asset is measured at amortised cost if it is held within the business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Assets at amortised cost include include trade, other receivables and other assets, cash restricted for use and cash and cash equivalents. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains or losses, together with foreign exchange gains or losses. Impairment losses are presented in the statement of profit or loss. A gain or loss on a debt investment that is subsequently measured at FVTPL is recognised in profit or loss and presented net within other gains or losses in the period in which it arises. On derecognition of a financial asset, the difference between the proceeds received or receivable and the carrying amount of the asset is included in profit or loss.
Equity instruments
Listed equity investments and unlisted equity investments other thanare included in Other investments in subsidiaries, joint ventures and associates,the Statement of financial position. Listed equity investments which are held to meet rehabilitation liabilities are classified as available-for-sale financial assets andFVTPL. Listed equity investments held for other purposes are classified as FVTOCI.
The group subsequently measuredmeasures all equity investments at fair value. Listed investments’Where the group’s management has elected to present fair values are calculated by reference to the quoted selling price at the close of businessvalue gains and losses on the reporting date. Fair values for unlisted equity investments are estimated using methods reflecting the economic circumstancesin OCI, there is no subsequent reclassification of the investee. Equity investments for which fair value cannot be measured reliably are recognised at cost less impairment. Changes in fair value are recognised in other comprehensive income in the period in which they arise. These amounts are removed from other comprehensive incomegains and reported in income when the asset is derecognised or when there is objective evidence that the asset is impaired based on a significant or prolonged decrease in the fair value of the equity instrument below its cost.
Trade receivables
Trade receivables mainly comprise receivables owing from banking institutions purchasing gold bullion. Normal market settlement terms are two working days. Trade receivables are recognised on settlement date.
F - 27
Deferred compensation asset
Impairment of financial assets
Financial assets at amortised cost consist of trade receivables, loans, cash and cash equivalents and debt instruments. Impairment losses are assessed using the forward-looking expected credit loss (ECL) approach. An allowance is recorded for all loans and other debt financial assets not held at FVTPL. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Trade receivable loss allowances are measured at an active market isamount equal to lifetime ECL’s. Loss allowances are deducted from the current offer price times the number of unitsgross carrying amount of the instrument held or issued.
Fair value measurements
The group measures financial instruments at fair value at each reporting date where relevant. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy. The group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
F - 28
2 SEGMENTAL INFORMATION
AngloGold Ashanti Limited’s operating segments are being reported based on the financial information provided to the Chief Executive Officer and the Executive Committee, collectively identified as the Chief Operating Decision Maker (CODM). The group produces gold as its primary product and does not have distinct divisional segments in terms of principal business activity, but manages its business on the basis of different geographic segments (including equity accounted joint venture investments). Individual members of the Executive Committee are responsible for geographic regions of the business.
Group analysis by origin is as follows:
| Figures in millions | Gold income | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
| Geographical analysis of gold income by origin is as follows: | |||||||||||||||||
Africa(1) | 2,769 | 2,203 | 1,983 | ||||||||||||||
| Australia | 989 | 851 | 780 | ||||||||||||||
| Americas | 1,211 | 1,000 | 1,021 | ||||||||||||||
| 4,969 | 4,054 | 3,784 | |||||||||||||||
| Equity-accounted joint ventures included above | (647) | (615) | (581) | ||||||||||||||
| Continuing operations | 4,322 | 3,439 | 3,203 | ||||||||||||||
| Discontinued operations - South Africa | 408 | 554 | 602 | ||||||||||||||
| 4,730 | 3,993 | 3,805 | |||||||||||||||
| Foreign countries included in the above and considered material are: | |||||||||||||||||
| Australia | 989 | 851 | 780 | ||||||||||||||
| Argentina | 0 | 0 | 387 | ||||||||||||||
| Brazil | 853 | 679 | 0 | ||||||||||||||
| Ghana | 536 | 0 | 0 | ||||||||||||||
| Tanzania | 1,133 | 849 | 715 | ||||||||||||||
| DRC | 647 | 504 | 468 | ||||||||||||||
| Geographical analysis of gold income by destination is as follows: | |||||||||||||||||
| South Africa | 943 | 981 | 946 | ||||||||||||||
| North America | 580 | 486 | 450 | ||||||||||||||
| South America | 1 | 0 | 0 | ||||||||||||||
| Australia | 989 | 851 | 780 | ||||||||||||||
| Europe | 358 | 329 | 387 | ||||||||||||||
| United Kingdom | 2,098 | 1,407 | 1,221 | ||||||||||||||
| 4,969 | 4,054 | 3,784 | |||||||||||||||
| Equity-accounted joint ventures included above | (647) | (615) | (581) | ||||||||||||||
| Continuing operations | 4,322 | 3,439 | 3,203 | ||||||||||||||
| Discontinued operations - South Africa | 408 | 554 | 602 | ||||||||||||||
| Continuing and discontinued operations | 4,730 | 3,993 | 3,805 | ||||||||||||||
| Figures in millions | Total assets (1)(2)(3) | Net operating assets(2)(3) | |||||||||||||||
| US Dollars | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||
| South Africa | 1,734 | 1,818 | 1,629 | 1,388 | 1,520 | 1,352 | |||||||||||
| Continental Africa | 3,153 | 3,090 | 3,121 | 1,296 | 1,278 | 1,349 | |||||||||||
| Australasia | 929 | 804 | 837 | 664 | 581 | 625 | |||||||||||
| Americas | 1,258 | 1,273 | 1,341 | 909 | 923 | 963 | |||||||||||
| Other, including non-gold producing subsidiaries | 145 | 168 | 356 | 24 | 26 | 11 | |||||||||||
| 7,219 | 7,153 | 7,284 | 4,281 | 4,328 | 4,300 | ||||||||||||
| Non-current assets considered material, by country are: | |||||||||||||||||
South Africa(5) | 1,295 | 1,678 | 1,463 | ||||||||||||||
Foreign entities(5) | 4,259 | 4,144 | 4,324 | ||||||||||||||
DRC(5) | 1,423 | 1,400 | 1,406 | ||||||||||||||
Ghana(5) | 533 | 520 | 543 | ||||||||||||||
Tanzania(5) | 422 | 437 | 517 | ||||||||||||||
Australia(5) | 764 | 673 | 703 | ||||||||||||||
Brazil(5) | 632 | 645 | 657 | ||||||||||||||
| Figures in millions | By product revenue | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
Africa(1) | 4 | 3 | 4 | ||||||||||||||
| Australia | 3 | 3 | 2 | ||||||||||||||
| Americas | 99 | 81 | 128 | ||||||||||||||
| 106 | 87 | 134 | |||||||||||||||
| Equity-accounted joint ventures included above | (1) | (1) | (1) | ||||||||||||||
| Continuing operations | 105 | 86 | 133 | ||||||||||||||
| Discontinued operations - South Africa | 1 | 1 | 6 | ||||||||||||||
| 106 | 87 | 139 | |||||||||||||||
F - 29
| Figures in millions | Amortisation | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| South Africa | 133 | 167 | 182 | |||||
Continental Africa(1) | 421 | 365 | 339 | |||||
| Australasia | 130 | 126 | 117 | |||||
Americas(1) | 273 | 260 | 240 | |||||
| Other, including non-gold producing subsidiaries | 2 | 5 | 7 | |||||
| 959 | 923 | 885 | ||||||
| Equity-accounted investments included above | (136 | ) | (114 | ) | (108 | ) | ||
| Continuing operations | 823 | 809 | 777 | |||||
| Discontinued operations | — | — | 6 | |||||
| 823 | 809 | 783 | ||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2 Segmental InformationSEGMENTAL INFORMATION (continued)
The group's revenue is mainly derived from gold income. Approximately 38% of the group's total gold produced is sold to two customers of the group: ANZ Investment Bank Ltd 18% and Standard Chartered Bank 20%. Due to the diversity and depth of the total gold market, the bullion banks do not possess significant pricing power.
| Figures in millions | Gross profit (loss) (2) | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
Africa(1) | 1,201 | 605 | 380 | ||||||||||||||
| Australia | 286 | 221 | 160 | ||||||||||||||
Americas(1) | 532 | 265 | 310 | ||||||||||||||
| Corporate and other | (2) | 1 | 2 | ||||||||||||||
| 2,017 | 1,092 | 852 | |||||||||||||||
| Equity-accounted joint ventures included above | (308) | (188) | (102) | ||||||||||||||
| Continuing operations | 1,709 | 904 | 750 | ||||||||||||||
| Discontinued operations - South Africa | 83 | 79 | 22 | ||||||||||||||
| 1,792 | 983 | 772 | |||||||||||||||
| Figures in millions | Cost of sales | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
Africa(1) | 1,572 | 1,601 | 1,607 | ||||||||||||||
| Australia | 705 | 632 | 622 | ||||||||||||||
Americas (1) | 764 | 822 | 838 | ||||||||||||||
| Corporate and other | (2) | (1) | (3) | ||||||||||||||
| 3,039 | 3,054 | 3,064 | |||||||||||||||
| Equity-accounted joint ventures included above | (340) | (428) | (480) | ||||||||||||||
| Continuing operations | 2,699 | 2,626 | 2,584 | ||||||||||||||
| Discontinued operations - South Africa | 287 | 479 | 589 | ||||||||||||||
| 2,986 | 3,105 | 3,173 | |||||||||||||||
| Figures in millions | Amortisation | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
Africa(1) | 349 | 367 | 379 | ||||||||||||||
| Australia | 160 | 173 | 149 | ||||||||||||||
Americas(1) | 163 | 177 | 192 | ||||||||||||||
| Corporate and other | 2 | 3 | 3 | ||||||||||||||
| 674 | 720 | 723 | |||||||||||||||
| Equity-accounted joint ventures included above | (104) | (137) | (165) | ||||||||||||||
| Continuing operations | 570 | 583 | 558 | ||||||||||||||
| Discontinued operations - South Africa | 0 | 61 | 72 | ||||||||||||||
| 570 | 644 | 630 | |||||||||||||||
| Figures in millions | Capital expenditure | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| South Africa | 150 | 182 | 206 | |||||
Continental Africa(1) | 409 | 291 | 315 | |||||
| Australasia | 153 | 109 | 78 | |||||
Americas (1) | 234 | 225 | 196 | |||||
| Other, including non-gold producing subsidiaries | 7 | 4 | 4 | |||||
| 953 | 811 | 799 | ||||||
| Discontinued operations | — | — | 58 | |||||
| 953 | 811 | 857 | ||||||
| Equity-accounted investments included above | (123 | ) | (100 | ) | (131 | ) | ||
| 830 | 711 | 726 | ||||||
F - 30
Gold production (attributable) (000oz) | ||||||||
| 2017 | 2016 | 2015 | ||||||
| South Africa | 903 | 967 | 1,004 | |||||
| Continental Africa | 1,453 | 1,321 | 1,435 | |||||
| Australasia | 559 | 520 | 560 | |||||
| Americas | 840 | 820 | 831 | |||||
| Continuing operations | 3,755 | 3,628 | 3,830 | |||||
| Discontinued operations | — | — | 117 | |||||
| 3,755 | 3,628 | 3,947 | ||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2 Segmental InformationSEGMENTAL INFORMATION (continued)
| Figures in millions | Total assets (1)(3)(4) | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
| South Africa | 0 | 697 | 1,106 | ||||||||||||||
| Africa | 3,956 | 3,514 | 3,135 | ||||||||||||||
| Australia | 1,044 | 972 | 888 | ||||||||||||||
| Americas | 1,626 | 1,427 | 1,286 | ||||||||||||||
| Corporate and other | 1,046 | 253 | 228 | ||||||||||||||
| 7,672 | 6,863 | 6,643 | |||||||||||||||
| Figures in millions | Non-current assets (5) | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
| Non-current assets considered material, by country are: | |||||||||||||||||
| South Africa | 59 | 25 | 1,005 | ||||||||||||||
| Foreign entities | 5,053 | 4,644 | 4,234 | ||||||||||||||
| DRC | 1,604 | 1,506 | 1,439 | ||||||||||||||
| Ghana | 915 | 758 | 550 | ||||||||||||||
| Tanzania | 425 | 379 | 369 | ||||||||||||||
| Australia | 849 | 817 | 718 | ||||||||||||||
| Brazil | 627 | 625 | 615 | ||||||||||||||
F - 31
| Figures in millions | Gold income | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| Geographical analysis of gold income by origin is as follows: | ||||||||
| South Africa | 1,101 | 1,173 | 1,132 | |||||
Continental Africa(1) | 1,895 | 1,663 | 1,724 | |||||
| Australasia | 709 | 646 | 666 | |||||
| Americas | 1,104 | 1,036 | 967 | |||||
| 4,809 | 4,518 | 4,489 | ||||||
| Equity-accounted investments included above | (453 | ) | (433 | ) | (474 | ) | ||
| Continuing operations (note 3) | 4,356 | 4,085 | 4,015 | |||||
| Discontinued operations | — | — | 137 | |||||
| 4,356 | 4,085 | 4,152 | ||||||
| Foreign countries included in the above and considered material are: | ||||||||
| Brazil | 705 | 659 | 641 | |||||
| Guinea | 489 | |||||||
| Tanzania | 664 | 591 | 615 | |||||
| Geographical analysis of gold income by destination is as follows: | ||||||||
| South Africa | 1,659 | 1,719 | 2,499 | |||||
| North America | 456 | 893 | 658 | |||||
| Australia | 709 | 645 | 666 | |||||
| Asia | — | — | 195 | |||||
| Europe | 399 | 377 | 332 | |||||
| United Kingdom | 1,586 | 884 | 139 | |||||
| 4,809 | 4,518 | 4,489 | ||||||
| Equity-accounted investments included above | (453 | ) | (433 | ) | (474 | ) | ||
| Continuing operations (note 3) | 4,356 | 4,085 | 4,015 | |||||
| Discontinued operations | — | — | 137 | |||||
| Continuing and discontinued operations | 4,356 | 4,085 | 4,152 | |||||
| Figures in millions | By product revenue | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| South Africa | 15 | 23 | 38 | |||||
Continental Africa(1) | 3 | 4 | 3 | |||||
| Australasia | 2 | 2 | 2 | |||||
| Americas | 135 | 110 | 84 | |||||
| 155 | 139 | 127 | ||||||
| Equity-accounted investments included above | (1 | ) | (1 | ) | — | |||
| Continuing operations | 154 | 138 | 127 | |||||
| Discontinued operations | — | — | 1 | |||||
| 154 | 138 | 128 | ||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
2 Segmental InformationSEGMENTAL INFORMATION (continued)
| Figures in millions | Capital expenditure | ||||||||||||||||
| US Dollars | 2020 | 2019 | 2018 | ||||||||||||||
Africa(1) | 397 | 410 | 313 | ||||||||||||||
| Australia | 143 | 149 | 156 | ||||||||||||||
Americas (1) | 217 | 195 | 176 | ||||||||||||||
| Continuing operations | 757 | 754 | 645 | ||||||||||||||
| Discontinued operations - South Africa | 35 | 60 | 76 | ||||||||||||||
| 792 | 814 | 721 | |||||||||||||||
| Equity-accounted joint ventures included above | (56) | (51) | (69) | ||||||||||||||
| 736 | 763 | 652 | |||||||||||||||
(1)Includes equity-accounted joint ventures.
(2)The group's segmental profit measure is gross profit (loss), which excludes the results of associates and joint ventures. For the reconciliation of gross profit (loss) to profit before taxation and discontinued operations, refer to the group income statement.
(3)Total assets include allocated goodwill of $118m (2019: $108m; 2018: $108m) for Australia and $8m (2019: $8m; 2018: $8m) for Americas (note 17). In 2019, the South African segment included assets held for sale of $581m and the Africa Region segment included assets held for sale of $20m.
(4)In 2020, pre-tax impairment reversals and derecognition of assets of $17m were accounted for in South Africa (2019: $556m; 2018: $98m), Africa Region of NaN (2019: $2m; 2018: $5m) and the Americas of NaN (2019: $1m; 2018: $1m).
(5)Non-current assets exclude financial instruments and deferred tax assets.
F - 32
| Figures in millions | Total cash costs | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| South Africa | 968 | 857 | 874 | |||||
Continental Africa(1) | 1,088 | 976 | 1,010 | |||||
| Australasia | 407 | 404 | 393 | |||||
| Americas | 547 | 486 | 492 | |||||
| Corporate and other | (6 | ) | — | (9 | ) | |||
| 3,004 | 2,723 | 2,760 | ||||||
| Equity-accounted investments included above | (295 | ) | (288 | ) | (267 | ) | ||
| Continuing operations | 2,709 | 2,435 | 2,493 | |||||
| Discontinued operations | — | — | 125 | |||||
| 2,709 | 2,435 | 2,618 | ||||||
| Figures in millions | Cost of sales | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| South Africa | 1,114 | 1,041 | 1,083 | |||||
Continental Africa(1) | 1,510 | 1,331 | 1,347 | |||||
| Australasia | 550 | 540 | 525 | |||||
Americas (1) | 851 | 752 | 719 | |||||
Corporate and other(1) | (3 | ) | 5 | (2 | ) | |||
| 4,022 | 3,669 | 3,672 | ||||||
| Equity-accounted investments included above | (440 | ) | (406 | ) | (378 | ) | ||
| Continuing operations | 3,582 | 3,263 | 3,294 | |||||
| Discontinued operations | — | — | 118 | |||||
| 3,582 | 3,263 | 3,412 | ||||||
| Figures in millions | Gross profit (loss) (4) | |||||||
| US Dollars | 2017 | 2016 | 2015 | |||||
| South Africa | (3 | ) | 149 | 42 | ||||
Continental Africa(1) | 386 | 334 | 377 | |||||
| Australasia | 159 | 106 | 142 | |||||
Americas(1) | 253 | 283 | 247 | |||||
Corporate and other(1) | 2 | (4 | ) | 2 | ||||
| 797 | 868 | 810 | ||||||
| Equity-accounted investments included above | (13 | ) | (27 | ) | (96 | ) | ||
| Continuing operations | 784 | 841 | 714 | |||||
| Discontinued operations | — | — | 19 | |||||
| 784 | 841 | 733 | ||||||
3 REVENUE FROM PRODUCT SALES
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Revenue consists of the following principal categories: | |||||||||||||||||
| Gold income (note 2) | 4,322 | 3,439 | 3,203 | ||||||||||||||
| By-products (note 2) | 105 | 86 | 133 | ||||||||||||||
| Revenue from product sales | 4,427 | 3,525 | 3,336 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Revenue consists of the following principal categories: | ||||||||
| Gold income (note 2) | 4,356 | 4,085 | 4,015 | |||||
| By-products (note 2 and 4) | 154 | 138 | 127 | |||||
| Royalties received (note 6) | 18 | 9 | 4 | |||||
| Interest received (notes 31 and 35) | 15 | 22 | 28 | |||||
| 4,543 | 4,254 | 4,174 | ||||||
4 COST OF SALES
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Cash operating costs | 1,881 | 1,831 | 1,850 | ||||||||||||||
| Royalties | 181 | 137 | 133 | ||||||||||||||
| Other cash costs | 12 | 13 | 13 | ||||||||||||||
| Total cash costs | 2,074 | 1,981 | 1,996 | ||||||||||||||
| Retrenchment costs | 2 | 4 | 4 | ||||||||||||||
| Rehabilitation and other non-cash costs | 32 | 53 | 17 | ||||||||||||||
| Amortisation of tangible assets (notes 32 and 36) | 521 | 538 | 553 | ||||||||||||||
| Amortisation of right of use assets (notes 16, 32 and 36) | 47 | 42 | 0 | ||||||||||||||
| Amortisation of intangible assets (notes 32 and 36) | 2 | 3 | 5 | ||||||||||||||
| Inventory change | 21 | 5 | 9 | ||||||||||||||
| 2,699 | 2,626 | 2,584 | |||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Cash operating costs | 2,728 | 2,444 | 2,493 | |||||
| By-products revenue (note 3) | (154 | ) | (138 | ) | (127 | ) | ||
| 2,574 | 2,306 | 2,366 | ||||||
| Royalties | 116 | 105 | 100 | |||||
| Other cash costs | 19 | 24 | 27 | |||||
| Total cash costs | 2,709 | 2,435 | 2,493 | |||||
| Retrenchment costs | 6 | 14 | 11 | |||||
| Rehabilitation and other non-cash costs | 29 | 43 | (10 | ) | ||||
| Amortisation of tangible assets (note 31 and note 35) | 817 | 789 | 737 | |||||
| Amortisation of intangible assets (note 31 and note 35) | 6 | 20 | 40 | |||||
| Inventory change | 15 | (38 | ) | 23 | ||||
| 3,582 | 3,263 | 3,294 | ||||||
5 CORPORATE ADMINISTRATION, MARKETING AND OTHER OPERATING EXPENSESCOSTS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Corporate administration expenses | 59 | 63 | 60 | ||||||||||||||
| Share scheme and related costs | 9 | 19 | 16 | ||||||||||||||
| 68 | 82 | 76 | |||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Care and maintenance costs (note 35) | 62 | 70 | 67 | |||||
| Pension and medical defined benefit provisions | 9 | 25 | 18 | |||||
| Governmental fiscal claims and care and maintenance of old tailings operations | 14 | 14 | 7 | |||||
| Other | 3 | 1 | 4 | |||||
| 88 | 110 | 96 | ||||||
6 SPECIAL ITEMSOTHER EXPENSE (INCOME)
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Care and maintenance note 36 | 0 | 47 | 39 | ||||||||||||||
| Governmental fiscal claims, cost of old tailings operations and other expenses | 20 | 21 | 14 | ||||||||||||||
| Guinea public infrastructure contribution | 0 | 8 | 0 | ||||||||||||||
| Pension and medical defined benefit provisions | 8 | 9 | 10 | ||||||||||||||
| Royalty receivable impaired | 4 | 0 | 0 | ||||||||||||||
| Royalties received | (2) | (3) | (10) | ||||||||||||||
| Brazilian power utility legal settlement | 0 | (16) | 0 | ||||||||||||||
| Retrenchment and related costs | 0 | 3 | 6 | ||||||||||||||
| Legal fees and project costs | 9 | 11 | 16 | ||||||||||||||
| Refund from insurance claim | (5) | 0 | 0 | ||||||||||||||
| Other indirect taxes | 23 | 3 | 4 | ||||||||||||||
| 57 | 83 | 79 | |||||||||||||||
.
F - 33
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
Impairment and derecognition of assets(1) | 297 | 3 | 20 | |||||
| Impairment of other investments | 3 | — | — | |||||
Retrenchment and related costs(2) | 88 | 1 | 4 | |||||
Legal fees (recoveries) and other costs related to contract terminations and settlement costs(3) | 71 | 11 | (1 | ) | ||||
| Write-down of inventories | 3 | 12 | 11 | |||||
| Net (profit) loss on disposal of assets | (8 | ) | (4 | ) | (1 | ) | ||
| Royalties received (note 3) | (18 | ) | (9 | ) | (4 | ) | ||
| Indirect tax expense (recoveries) | 2 | (2 | ) | (20 | ) | |||
| Repurchase premium and cost on settlement of debt facilities | — | 30 | 61 | |||||
| Other | — | — | 1 | |||||
| 438 | 42 | 71 | ||||||
7 FINANCE COSTS AND UNWINDING OF OBLIGATIONS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Finance costs | |||||||||||||||||
| Finance costs on bonds, corporate notes, bank loans and other | 124 | 135 | 128 | ||||||||||||||
| Amortisation of fees | 23 | 4 | 7 | ||||||||||||||
| Lease finance charges | 8 | 10 | 5 | ||||||||||||||
| Less: interest captalised | (17) | (6) | 0 | ||||||||||||||
| 138 | 143 | 140 | |||||||||||||||
| Unwinding of obligations | 39 | 29 | 28 | ||||||||||||||
| Total finance costs and unwinding of obligations (notes 32 and 36) | 177 | 172 | 168 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Finance costs | ||||||||
| Finance costs on bonds, corporate notes, bank loans and other | 132 | 148 | 215 | |||||
| Amortisation of fees | 4 | 4 | 5 | |||||
| Finance lease charges | 6 | 6 | 3 | |||||
| 142 | 158 | 223 | ||||||
| Unwinding of obligations | 27 | 22 | 22 | |||||
Total finance costs, unwinding of obligations and other discounts (note 31 and 35) | 169 | 180 | 245 | |||||
8 SHARE OF ASSOCIATES AND JOINT VENTURES' PROFIT (LOSS)
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Revenue | 677 | 616 | 582 | ||||||||||||||
| Operating costs and other expenses | (353) | (452) | (472) | ||||||||||||||
Profit on sale of joint ventures (1) | 19 | 0 | 0 | ||||||||||||||
| Net interest received (paid) | 5 | 10 | (8) | ||||||||||||||
| Profit (loss) before taxation | 348 | 174 | 102 | ||||||||||||||
| Taxation | (70) | (35) | (9) | ||||||||||||||
| Profit (loss) after taxation | 278 | 139 | 93 | ||||||||||||||
| Impairment reversal of investments in associates | 0 | 23 | 15 | ||||||||||||||
| Impairment reversal of investments in joint ventures (note 19) | 0 | 6 | 14 | ||||||||||||||
| Share of associates and joint ventures’ profit (loss) (note 32) | 278 | 168 | 122 | ||||||||||||||
(1) The profit on sale of joint ventures includes the profit on sale of Sadiola $14m, Morila $4m and Chuscal $1m.
F - 34
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Revenue | 453 | 441 | 489 | |||||
| Operating costs, special items and other expenses | (470 | ) | (446 | ) | (415 | ) | ||
| Net interest received | 1 | 3 | 7 | |||||
| Profit (loss) before taxation | (16 | ) | (2 | ) | 81 | |||
| Taxation | 23 | 7 | (17 | ) | ||||
| Profit (loss) after taxation | 7 | 5 | 64 | |||||
| (Impairment) impairment reversal of investments in associates | 13 | (5 | ) | 12 | ||||
| Impairment reversal of investments in joint ventures (note 17) | 2 | 11 | 12 | |||||
| Share of associates and joint ventures’ profit (loss) (note 31) | 22 | 11 | 88 | |||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Employee benefits including Executive Directors’ and Prescribed Officers’ salaries and other benefits | 1,024 | 918 | 971 | |||||
| Health care and medical scheme costs | ||||||||
| - current medical expenses | 58 | 51 | 54 | |||||
| - defined benefit post-retirement medical expenses | 10 | 10 | 10 | |||||
| Pension and provident plan costs | ||||||||
| - defined contribution | 53 | 48 | 49 | |||||
| - defined benefit pension plans | — | 15 | 14 | |||||
| Retrenchment costs | 92 | 16 | 15 | |||||
| Share-based payment expense (note 10) | 33 | 37 | 33 | |||||
| Included in cost of sales, other operating expenses, special items and corporate administration, marketing and other expenses | 1,270 | 1,095 | 1,146 | |||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
9 DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE
South African asset sale
On 12 February 2020, AngloGold Ashanti announced that it has reached an agreement to sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited ("Harmony") – following receipt of all regulatory approvals, the transaction closed on 30 September 2020 with Harmony taking effective control of these producing assets and related liabilities on 1 October 2020. Consideration for the transaction was $200 million in cash and deferred payments subject to subsequent performance, and with additional proceeds if the West Wits assets are developed below current infrastructure. The deferred compensation is payable as follows:
1.$260 per ounce payable on all underground production sourced within the West Wits mineral rights (comprising the Mponeng, Savuka and Tau Tona mines) in excess of 250,000 ounces per annum for 6 years commencing 1 January 2021; and
2.$20 per ounce payable on underground production sourced within the West Wits mineral rights (comprising the Mponeng, Savuka and Tau Tona mines) below the datum of current infrastructure.
The transaction included the following assets and liabilities:
•The Mponeng mine and its associated assets and liabilities;
•The Tau Tona and Savuka mines and associated rock-dump and tailings storage facility reclamation sites, mine rehabilitation and closure activities located in the West Wits region and their associated assets and liabilities;
•First Uranium (Pty) Limited
•which owns Mine Waste Solutions (Pty) Limited and Chemwes (Pty) Limited as well as associated tailings assets and liabilities;
•Covalent Water Company (Pty) Limited, AngloGold Security Services (Pty) Limited and Masakhisane Investments (Pty) Limited; and
•Certain rock-dump reclamation, mine rehabilitation and closure activities located in the Vaal River region and their associated assets and liabilities.
The transaction excluded the silicosis obligation of $61m at 31 December 2020 and the post-retirement medical obligation of $77m at 31 December 2020, relating to South African employees, which were both retained by AngloGold Ashanti. The South African producing assets and related liabilities sold to Harmony are treated as a discontinued operation. AngloGold Ashanti incurred a loss of $81m after tax on disposal of the South African portfolio.
Discontinued operations
The results of the South Africa disposal group for the year ended 31 December are presented below:
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Revenue from product sales | 409 | 555 | 608 | ||||||||||||||
| Cost of sales | (287) | (479) | (589) | ||||||||||||||
| (Loss) gain on non-hedge derivatives and other commodity contracts | (39) | 3 | 3 | ||||||||||||||
| Gross profit | 83 | 79 | 22 | ||||||||||||||
| Other expenses | (23) | (44) | (72) | ||||||||||||||
| Derecognition of assets, and (loss) profit on disposal of assets | (80) | (3) | (118) | ||||||||||||||
| Impairment reversal (loss) recognised on remeasurement to fair value less costs to sell | 17 | (549) | 0 | ||||||||||||||
| Loss before taxation | (3) | (517) | (168) | ||||||||||||||
| Normal and deferred taxation on operations | 0 | (23) | 38 | ||||||||||||||
| Deferred tax on impairment reversal (loss), derecognition and profit (loss) on disposal of assets | (1) | 164 | 47 | ||||||||||||||
| Deferred taxation on unrealised movement on derivatives and other commodity contracts | 11 | 0 | 0 | ||||||||||||||
| Total profit (loss) from discontinued operations | 7 | (376) | (83) | ||||||||||||||
F - 35
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Equity-settled share incentive schemes | ||||||||
| Bonus Share Plan (BSP) | 26 | 26 | 22 | |||||
| Long Term Incentive Plan (LTIP) | (1 | ) | 7 | 11 | ||||
| Other | 1 | 1 | — | |||||
| 26 | 34 | 33 | ||||||
| Cash-settled share incentive scheme | ||||||||
| Cash-settled Long Term Incentive Plan (CSLTIP) | 7 | 3 | — | |||||
| Total share-based payment expense (note 9) | 33 | 37 | 33 | |||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
9 DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE(continued)
The major classes of assets and liabilities of the South African disposal group were as follows:
| US Dollars | ||||||||
| Figures in millions | 30 September 2020 | 31 December 2019 | ||||||
| Tangible assets and right of use assets | 359 | 429 | ||||||
| Other investments | 76 | 84 | ||||||
| Inventories | 75 | 37 | ||||||
| Trade, other receivables and other assets | 5 | 4 | ||||||
| Deferred taxation | 40 | 15 | ||||||
| Cash and cash restricted for use | 0 | 12 | ||||||
| Assets held for sale | 555 | 581 | ||||||
| Lease liabilities | 2 | 3 | ||||||
| Environmental rehabilitation and other provisions | 198 | 211 | ||||||
| Trade and other payables | 55 | 58 | ||||||
| Liabilities held for sale | 255 | 272 | ||||||
| Net assets held for sale | 300 | 309 | ||||||
The discontinued operations' net cash flows are reflected in the Statement of Cash Flows.
Impairment of South African assets
At 30 June 2020, an impairment reversal of $17m and taxation on impairment reversal of NaN was recognised, to increase the carrying amount of the assets in the disposal group to their fair value less costs to sell.
The profit on sale of the South African assets was calculated as follows:
| US Dollar million | |||||
| Held for sale assets derecognised | 555 | ||||
| Held for sale liabilities derecognised | (255) | ||||
| Net carrying value derecognised | 300 | ||||
| Less: | |||||
| Cash consideration | (200) | ||||
| Costs to sell, exchange impact and sale of houses | 8 | ||||
| Deferred compensation asset | (28) | ||||
| Loss on sale of assets before taxation | 80 | ||||
| Deferred taxation on sale of assets | 1 | ||||
| Loss on sale of assets after taxation | 81 | ||||
Sale interest in the Sadiola Mine
On 23 December 2019, AngloGold Ashanti announced that it together with its joint venture partner, IAMGOLD Corporation (''IAMGOLD''), had agreed to sell their interests in Société d’Exploitation des Mines d’Or de Sadiola S.A. (''SEMOS'') to Allied Gold Corp (Allied Gold). SEMOS' principal asset is the Sadiola Mine located in the Kayes region of Western Mali. The investment in Sadiola of $20m as at 31 December 2019 was included in assets held for sale.
On 30 December 2020, AngloGold Ashanti together with its joint venture partner IAMGOLD, completed the sale of their entire interests in SEMOS to Allied Gold (the “Transaction”).
Prior to the completion of the Transaction, a dividend of $20m was declared and paid by SEMOS pro rata to its shareholders. AngloGold Ashanti received a cash dividend of $8.2m.
Upon completion, AngloGold Ashanti received $25m from Allied Gold Corp and the Republic of Mali. Subsequently, AngloGold Ashanti received an agreed additional consideration of $1.8m.
F - 36
9 DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE(continued)
In terms of the Transaction, AngloGold Ashanti and IAMGOLD remain entitled to the following deferred consideration:
•$25m ($12.5m each to AngloGold Ashanti and IAMGOLD) upon the production of the first 250,000 ounces from the Sadiola Sulphides Project (SSP);
•$25m ($12.5m each to AngloGold Ashanti and IAMGOLD) upon the production of a further 250,000 ounces from the SSP; and
•$2.5m ($1.25m each to AngloGold Ashanti and IAMGOLD) in the event a favourable settlement is achieved by SEMOS in the litigation pending before the Malian courts.
The profit from the disposal of AngloGold Ashanti’s entire interest in SEMOS is $14m (including the dividend received). Prior to the completion of the Transaction and the dividend declaration, AngloGold Ashanti’s net carrying value for SEMOS, on an attributable basis, was $20m and was included in the Africa Region segment.
10 EMPLOYEE BENEFITS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Restated | |||||||||||||||||
Employee benefits including Executive Directors’ and Prescribed Officers’ salaries and other benefits (1) | 644 | 697 | 797 | ||||||||||||||
| - current medical expenses | 23 | 29 | 39 | ||||||||||||||
| - defined benefit post-retirement medical expenses | 7 | 8 | 9 | ||||||||||||||
| - defined contribution | 25 | 29 | 37 | ||||||||||||||
| Retrenchment costs | 2 | 7 | 30 | ||||||||||||||
| Share-based payment expense (note 11) | 16 | 42 | 35 | ||||||||||||||
| Included in cost of sales, other expenses (income) and corporate administration, marketing and other expenses of continuing and discontinued operations | 717 | 812 | 947 | ||||||||||||||
(1) The employee benefit details for 2019 were restated
During 2020, the group identified that the 2019 employee benefits note had erroneously excluded part of the employee benefit totals for one of its subsidiaries from the employee benefits note disclosures. As a consequence of the error, the note disclosure detailing employee benefits for the year ended 31 December 2019 was understated. The employee benefits note provides details of the types of employee costs allocated to various cost line items in the income statement. The costs allocated to various categories of the income statement were correct, however, the summary note was incorrect. The error has been corrected by restating the employee benefits note disclosures for 2019.
The "Employee benefits including Executive Directors' and Prescribed Officers' salaries and other benefits" in the table above, and the totals, were restated as follows:
| US dollar millions | As previously reported | Adjustment | As restated | ||||||||
| Employee benefits including Executive Directors' and Prescribed Officers' salaries and other benefits | 680 | 17 | 697 | ||||||||
| Included in cost of sales, other expenses (income) and corporate administration, marketing and other expenses of continuing and discontinued operations | 795 | 17 | 812 | ||||||||
The restatement has no impact on reported totals, headline earnings per share or on amounts presented in the Statement of financial position.
F - 37
11 SHARE-BASED PAYMENTS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Equity-settled share incentive schemes | |||||||||||||||||
| Bonus Share Plan (BSP) | 1 | 6 | 20 | ||||||||||||||
| Deferred Share Plan (DSP) | 14 | 13 | 0 | ||||||||||||||
| Other | 1 | 2 | 2 | ||||||||||||||
| 16 | 21 | 22 | |||||||||||||||
| Cash-settled share incentive scheme | |||||||||||||||||
| Cash-settled Long Term Incentive Plan (CSLTIP) | 0 | 21 | 13 | ||||||||||||||
| Total share-based payment expense (note 10) | 16 | 42 | 35 | ||||||||||||||
Equity-settled incentive schemes
Equity schemes include the Bonus Share Plan (BSP), Deferred Share Plan (DSP); Long Term Incentiveterm incentive Plan (LTIP), Share Retention Bonus Scheme (RB) and the Co-InvestmentCo-investment Plan (CIP). There were no additional schemes introduced during 2017 and no changes to rules or practicesThe DSP replaced all previous AngloGold Ashanti incentive schemes. The last allocations granted in the existing schemes.BSP, LTIP and CIP schemes vested during 2020; there are no further allocations and vesting as the schemes have been closed.
Bonus Share Plan (BSP)
| Award date (unvested awards and awards vested during the year) | 2020 | 2019 | 2018 | ||||||||||||||
| Calculated fair value | R | 119.14 | |||||||||||||||
| Vesting date 50% | 22 Feb 2019 | ||||||||||||||||
| Vesting date 50% | 22 Feb 2020 | ||||||||||||||||
| Expiry date | 22 Feb 2028 | ||||||||||||||||
| Number of shares | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Awards outstanding at beginning of year | 2,141,415 | 4,557,919 | 4,479,679 | ||||||||||||||
| Awards granted during the year | 0 | 0 | 2,492,584 | ||||||||||||||
| Awards lapsed during the year | 0 | (109,065) | (359,343) | ||||||||||||||
| Awards exercised during the year | (1,135,438) | (2,307,439) | (2,055,001) | ||||||||||||||
| Awards outstanding at end of year | 1,005,977 | 2,141,415 | 4,557,919 | ||||||||||||||
| Awards exercisable at end of year | 1,005,977 | 1,207,936 | 1,588,512 | ||||||||||||||
Cash awards granted under the bonus share plan, NaN were outstanding at year end 31 December 2020 (2019: 12,295; 2018: 33,046) and an amount of 12,295 cash awards vested and are deemed settled for the year ended 31 December 2020 (2019: 20,751, 2018: 15,209).
Deferred Share Plan (DSP)
The Deferred Share Plan (DSP) was implemented with effect from 1 January 2018, with the first awards for the scheme allocated in March 2019. This represents a single scheme under which share awards will be allocated to certain employees from 2019 onwards, vesting equally over a period of 2, 3 and 5 years depending on the level of seniority of the participant.
F - 38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
11 SHARE-BASED PAYMENTS (continued)
| Award date (unvested awards and awards vested during the year) | 2017 | 2016 | 2015 | ||||||||
| Calculated fair value | R | 152.87 | R | 229.22 | R | 130.87 | |||||
| Vesting date 50% | 1 Mar 2018 | 1 Mar 2017 | 3 Mar 2016 | ||||||||
| Vesting date 50% | 1Mar 2019 | 1 Mar 2018 | 3 Mar 2017 | ||||||||
| Expiry date | 1 Mar 2027 | 1 Mar 2026 | 3 Mar 2025 | ||||||||
| Number of shares | ||||||||
| 2017 | 2016 | 2015 | ||||||
| Awards outstanding at beginning of year | 4,198,285 | 4,708,799 | 3,305,515 | |||||
| Awards granted during the year | 1,926,549 | 2,103,767 | 2,562,313 | |||||
| Awards lapsed during the year | (218,601 | ) | (204,374 | ) | (165,006 | ) | ||
| Awards exercised during the year | (1,426,554 | ) | (2,409,907 | ) | (994,023 | ) | ||
| Awards outstanding at end of year | 4,479,679 | 4,198,285 | 4,708,799 | |||||
| Awards exercisable at end of year | 1,904,021 | 1,170,849 | 1,687,096 | |||||
Equity-settled incentive schemes (continued)
| Award date (unvested awards and awards vested during the year) | 2020 | 2019 | 2018 | ||||||||||||||
| Calculated fair value | R | 325.97 | R | 204.42 | |||||||||||||
| DSP 2 year | |||||||||||||||||
| Vesting date 50% | 25 Feb 2021 | 21 Feb 2020 | |||||||||||||||
| Vesting date 50% | 25 Feb 2022 | 21 Feb 2021 | |||||||||||||||
| DSP 3 year | |||||||||||||||||
| Vesting date 33% | 25 Feb 2021 | 21 Feb 2020 | |||||||||||||||
| Vesting date 33% | 25 Feb 2022 | 21 Feb 2021 | |||||||||||||||
| Vesting date 34% | 25 Feb 2023 | 21 Feb 2022 | |||||||||||||||
| DSP 5 year | |||||||||||||||||
| Vesting date 20% | 25 Feb 2021 | 21 Feb 2020 | |||||||||||||||
| Vesting date 20% | 25 Feb 2022 | 21 Feb 2021 | |||||||||||||||
| Vesting date 20% | 25 Feb 2023 | 21 Feb 2022 | |||||||||||||||
| Vesting date 20% | 25 Feb 2024 | 21 Feb 2023 | |||||||||||||||
| Vesting date 20% | 25 Feb 2025 | 21 Feb 2024 | |||||||||||||||
| Expiry date | 25 Feb 2030 | 21 Feb 2029 | |||||||||||||||
| Number of shares | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Awards outstanding at beginning of year | 1,599,360 | ||||||||||||||||
| Awards granted during the year | 1,176,532 | 1,669,191 | |||||||||||||||
| Awards lapsed during the year | (155,575) | (55,208) | |||||||||||||||
| Awards exercised during the year | (330,555) | (14,623) | |||||||||||||||
| Awards outstanding at end of year | 2,289,762 | 1,599,360 | |||||||||||||||
| Awards exercisable at end of year | 183,439 | 0 | |||||||||||||||
Long Term Incentive Plan (LTIP)
| Award date (unvested awards and awards vested during the year) | 2015 | |||||||||||||||||
| Calculated fair value | R | 129.94 | ||||||||||||||||
| Vesting date | 3 Mar 2018 | |||||||||||||||||
| Expiry date | 3 Mar 2025 | |||||||||||||||||
| Number of shares | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Awards outstanding at beginning of year | 229,639 | 447,842 | 2,466,357 | ||||||||||||||
| Awards lapsed during the year | 0 | 0 | (1,186,330) | ||||||||||||||
| Awards exercised during the year | (118,077) | (218,203) | (832,185) | ||||||||||||||
| Awards outstanding at end of year | 111,562 | 229,639 | 447,842 | ||||||||||||||
| Awards exercisable at end of year | 111,562 | 229,639 | 447,842 | ||||||||||||||
F - 39
| Number of shares | ||||||||
| 2017 | 2016 | 2015 | ||||||
| Awards outstanding at beginning of year | 4,363,330 | 6,028,193 | 3,964,362 | |||||
| Awards granted during the year | — | — | 3,120,555 | |||||
| Awards lapsed during the year | (1,512,857 | ) | (1,160,023 | ) | (830,356 | ) | ||
| Awards exercised during the year | (384,116 | ) | (504,840 | ) | (226,368 | ) | ||
| Awards outstanding at end of year | 2,466,357 | 4,363,330 | 6,028,193 | |||||
| Awards exercisable at end of year | 455,914 | 320,169 | 445,781 | |||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Equity-settled incentive schemes (continued)
Co-Investment Plan (CIP)
| Number of shares | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Awards outstanding at beginning of year | 23,927 | 112,578 | 95,378 | ||||||||||||||
| Awards granted during the year | 0 | 0 | 80,809 | ||||||||||||||
| Awards lapsed during the year | 0 | (16,500) | (11,633) | ||||||||||||||
| Awards matched during the year | (23,927) | (72,151) | (51,976) | ||||||||||||||
| Awards outstanding at end of year | 0 | 23,927 | 112,578 | ||||||||||||||
| Number of shares | ||||||||
| 2017 | 2016 | 2015 | ||||||
| Awards outstanding at beginning of year | 97,651 | 145,040 | 56,703 | |||||
| Awards granted during the year | 112,105 | 47,590 | 125,050 | |||||
| Awards lapsed during the year | (62,775 | ) | (18,570 | ) | (6,426 | ) | ||
| Awards exercised during the year | (51,603 | ) | (76,409 | ) | (30,287 | ) | ||
| Awards outstanding at end of year | 95,378 | 97,651 | 145,040 | |||||
Cash-Settled Long Term Incentive Plan (CSLTIP)
There were no changes to rules or practices within the CSLTIP scheme.scheme, and no awards during 2018, 2019 and 2020.
| Award date (unvested awards and awards vested during the year) | ||||||||||||||
| 2017 | 2016 | |||||||||||||
| Vesting date | 1 March 2020 | 1 March 2019 | ||||||||||||
| Number of units | |||||||||||
| 2020 | 2019 | 2018 | |||||||||
| Share units outstanding at beginning of year | 1,480,562 | 3,815,761 | 4,469,618 | ||||||||
| Share units granted during the year | 0 | 0 | 0 | ||||||||
| Share units lapsed during the year | (82,063) | (1,305,761) | (611,265) | ||||||||
| Share units exercised during the year | (1,398,499) | (1,029,438) | (42,592) | ||||||||
| Share units outstanding at end of year | 0 | 1,480,562 | 3,815,761 | ||||||||
F - 40
| Award date (unvested awards and awards vested during the year) | |||||||
| 2017 | 2016 | ||||||
| Closing share price at 30 December: | R | 128.62 | R | 152.58 | |||
| Vesting date | 1 March 2020 | 1 March 2019 | |||||
| Number of units | ||||
| 2017 | 2016 | |||
Share units outstanding at beginning of year(1) | 2,464,630 | 30,163 | ||
| Share units granted during the year | 2,572,437 | 2,537,000 | ||
| Share units lapsed during the year | (507,597 | ) | (100,490 | ) |
| Share units exercised during the year | (59,852 | ) | (2,043 | ) |
| Share units outstanding at end of year | 4,469,618 | 2,464,630 | ||
| Figures in millions | US Dollars | |||||||
| 2017 | 2016 | 2015 | ||||||
| South African taxation | ||||||||
| Non-mining tax | 1 | 1 | 1 | |||||
| Prior year (over) under provision | — | (3 | ) | (14 | ) | |||
| Deferred taxation | ||||||||
| Impairment and disposal of tangible assets | (72 | ) | — | (1 | ) | |||
| Other temporary differences | (62 | ) | 12 | (43 | ) | |||
| Prior year under provision | 15 | 25 | — | |||||
| Change in estimated deferred tax rate | 31 | — | (15 | ) | ||||
| (87 | ) | 35 | (72 | ) | ||||
| Foreign taxation | ||||||||
| Normal taxation | 201 | 246 | 214 | |||||
| Prior year over provision | (26 | ) | (10 | ) | (9 | ) | ||
| Deferred taxation | ||||||||
| Temporary differences | 20 | (65 | ) | 73 | ||||
| Prior year (over) under provision | 2 | (17 | ) | 5 | ||||
Change in statutory tax rate | (2 | ) | — | — | ||||
| 195 | 154 | 283 | ||||||
| 108 | 189 | 211 | ||||||
| Tax rate reconciliation | ||||||||
| A reconciliation of the effective tax rate in the income statement to the prevailing estimated South African corporate tax rate is set out in the following table: | ||||||||
| % | % | % | ||||||
| Effective tax rate | (172 | ) | 70 | 82 | ||||
| Disallowable items | ||||||||
| Derivative and other commodity contracts losses and fair value gains | — | 1 | 7 | |||||
| Exploration, corporate and other disallowable expenses | 44 | (12 | ) | (23 | ) | |||
| Share of associates and joint ventures’ profit (loss) | (10 | ) | 1 | 10 | ||||
| Foreign income tax allowances and rate differentials | 47 | (18 | ) | (16 | ) | |||
| Exchange variation and translation adjustments | 10 | 8 | (24 | ) | ||||
| Non-tax effective income (loss) | 69 | (26 | ) | (25 | ) | |||
| Effect of temporary differences not recognised for deferred tax assets | 26 | — | — | |||||
| Capital allowances | — | 2 | 4 | |||||
| Change in estimated deferred tax rate | 31 | — | 6 | |||||
| Change in statutory tax rate | (4 | ) | — | — | ||||
| Prior year over provision | (13 | ) | 2 | 7 | ||||
| Estimated corporate tax rate | 28 | 28 | 28 | |||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
12 TAXATION
| Figures in millions | US Dollars | ||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| South African taxation | |||||||||||||||||
| Normal taxation | 1 | 0 | 0 | ||||||||||||||
| Prior year over provision | 0 | 0 | (2) | ||||||||||||||
| Deferred taxation | |||||||||||||||||
Other temporary differences (1) | 74 | (18) | (27) | ||||||||||||||
| Change in estimated deferred tax rate | 0 | (14) | 7 | ||||||||||||||
| 75 | (32) | (22) | |||||||||||||||
| Foreign taxation | |||||||||||||||||
| Normal taxation | 553 | 299 | 243 | ||||||||||||||
| Prior year under (over) provision | 8 | (1) | 1 | ||||||||||||||
| Deferred taxation | |||||||||||||||||
| Temporary differences | 9 | (28) | (6) | ||||||||||||||
| Prior year (over) under provision | (6) | 1 | 4 | ||||||||||||||
| Change in estimate | (14) | 9 | (7) | ||||||||||||||
| Change in statutory tax rate | 0 | 2 | (1) | ||||||||||||||
| 550 | 282 | 234 | |||||||||||||||
| 625 | 250 | 212 | |||||||||||||||
Reconciliation to South African statutory rate
| Figures in millions | US Dollars | ||||||||||||||||
| Reconciliation to South African statutory rate | 2020 | 2019 | 2018 | ||||||||||||||
| Implied tax charge at 28% | 445 | 173 | 125 | ||||||||||||||
| Increase (decrease) due to: | |||||||||||||||||
Expenses not tax deductible(1) | 29 | 28 | 28 | ||||||||||||||
| Share of associates and joint ventures' profit | (78) | (47) | (34) | ||||||||||||||
Tax rate differentials(2) and withholding taxes | 96 | 39 | 25 | ||||||||||||||
| Exchange variations, translation and accounting adjustments | 28 | 11 | 24 | ||||||||||||||
| Current year tax losses not recognised (recognised) in deferred tax assets: | |||||||||||||||||
| Obuasi mine | (6) | 14 | 13 | ||||||||||||||
AngloGold Ashanti Holdings plc(3) | 31 | 29 | 36 | ||||||||||||||
| North America | 4 | 6 | 6 | ||||||||||||||
| Siguiri | (8) | 0 | 0 | ||||||||||||||
| Other | 3 | (2) | (1) | ||||||||||||||
| Change in planned utilisation of deferred tax assets and impact of estimated deferred tax rate change | (14) | (5) | 0 | ||||||||||||||
| Tax effect of retained SA items | 16 | 3 | (10) | ||||||||||||||
| Tax allowances | (1) | (1) | (2) | ||||||||||||||
| Derecognition of deferred tax assets | 78 | 0 | 0 | ||||||||||||||
| Impact of statutory tax rate change | 0 | 2 | (1) | ||||||||||||||
| Adjustment in respect of prior years | 2 | 0 | 3 | ||||||||||||||
| Income tax expense | 625 | 250 | 212 | ||||||||||||||
(1) Includes corporate, exploration and non-tax deductible rehabilitation costs and British Virgin Isle group losses.
(2) Due to different tax rates in various jurisdictions, primarily Tanzania, Ghana and Guinea.
F - 41
| 2017 | 2016 | 2015 | ||||||
| South Africa | ||||||||
Mining tax rate – maximum statutory rate(1) | 34 | % | 34 | % | 34 | % | ||
| Non-mining tax | 28 | % | 28 | % | 28 | % | ||
| Foreign operations include: | ||||||||
| Argentina | 30 | % | 30 | % | 30 | % | ||
| Australia | 30 | % | 30 | % | 30 | % | ||
| Brazil | 34 | % | 34 | % | 34 | % | ||
| Ghana | 30 | % | 30 | % | 30 | % | ||
| Guinea | 30 | % | 30 | % | 30 | % | ||
| Tanzania | 30 | % | 30 | % | 30 | % | ||
| Figures in millions | US Dollars | Figures in millions | US Dollars | ||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2020 | 2019 | 2018 | ||||||||||||||||||||
| Analysis of unrecognised deferred tax assets | Analysis of unrecognised deferred tax assets | ||||||||||||||||||||||||
| Available to be utilised against future profits | |||||||||||||||||||||||||
| Tax losses available to be utilised against future profits | Tax losses available to be utilised against future profits | ||||||||||||||||||||||||
| - utilisation required within one year | - utilisation required within one year | 62 | 0 | 48 | |||||||||||||||||||||
| - utilisation required between one and two years | 48 | — | — | - utilisation required between one and two years | 54 | 85 | 187 | ||||||||||||||||||
| - utilisation required between two and five years | 333 | 321 | 237 | - utilisation required between two and five years | 352 | 356 | 300 | ||||||||||||||||||
| - utilisation required between five and twenty years | 1,210 | 1,185 | 1,184 | - utilisation required between five and twenty years | 1,002 | 973 | 1,229 | ||||||||||||||||||
| - utilisation in excess of twenty years | 1 | 1 | — | - utilisation in excess of twenty years | 421 | 73 | 26 | ||||||||||||||||||
| 1,592 | 1,507 | 1,421 | 1,891 | 1,487 | 1,790 | ||||||||||||||||||||
At the statutory tax rates the unrecognised value of deferred tax assets are: $470m (2016: $477m; 2015: $452m)$487m (2019: $389m; 2018: $501m), mainly relating to tax losses incurred in the United Kingdom, North America, Ghana, Colombia and Colombia.SA Corporate.
Income tax uncertainties
AngloGold Ashanti operates in numerous countries around the world and accordingly is subject to, and pays annual income taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with local government, and others are defined by the general corporate income tax laws of the country. The group has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably determined to be due. In some jurisdictions, tax authorities are yet to complete their assessments for previous years. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the group is subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the tax authorities over the interpretation or application of certain rules in respect of the group’s business conducted within the country involved. Significant judgement is required in determining the worldwide provisions for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
Irrespective of whether potential economic outflows of matters have been assessed as probable or possible, individually significant matters are included below, to the extent that disclosure does not prejudice the group.
Argentina - Cerro Vanguardia SA
The Argentina Tax Authority has challenged the deduction of certain hedge losses, with tax and penalties amounting to $8m (2019: $10m; 2018: $14m). Management has appealed this matter which has been heard by the Tax Court, with final evidence submitted in 2017. The matter is pending and judgement is expected in the next 24 months. Management is of the opinion that the hedge losses were claimed correctly and no provision has therefore been made.
Brazil - AGA Mineração and Serra Grande
The Brazil Tax Authority has challenged various aspects of the Companies’ tax returns for periods from 2003 to 2016 which individually and in aggregate are not considered to be material. Based on the engagement with the Tax Authority, certain amounts have been allowed and assessments reduced, whilst objections have been lodged against the remainder of the findings. In December 2019, Serra Grande received a tax assessment of $20m (2019: $25m) relating to the amortisation of goodwill on the acquisition of mining interests, which is permitted as a tax deduction when the acquirer is a domiciled entity. Management is of the opinion that the Tax Authority is unlikely to succeed in this matter. This is supported by external legal advice and therefore no provision has been made.
Colombia - La Colosa and Gramalote
The tax treatment of exploration expenditure has been investigated by the Colombian Tax Authority which resulted in claims for taxes and penalties of $86m(1) (2019: $88m; 2018: $144m) pertaining to the 2010 to 2014 tax years.
These assessments were appealed in 2016 (in the case of La Colosa) and resulted in an adverse judgement on 22 October 2018, in the Administrative Court of Cundinamarca. An appeal was lodged and all arguments submitted to the Council of State on 21 August 2018, with an expected judgement in the next 12 to 18 months as at 31 December 2020. The deduction of exploration costs is prohibited from 2017 onwards following a change in legislation. Subsequent to this date, exploration costs have been treated in accordance with the amended legislation. In July 2019, the Supreme Administrative Court issued a ruling that duplicate penalties may not be charged. The impact of the ruling is that certain penalties will be waived, which reduces the overall exposure by $76m (2019: $76m). The matter is pending and may take two to four years to be resolved. Management is of the opinion that the Colombian Tax Authority is unlikely to succeed in this matter and therefore no provision is made.
(1) Includes reduction of overall exposure by $76m (2019:$76m) as described above.
Ghana - Iduapriem
The Ghana Revenue Authority completed a tax audit for the 2018 year of assessment claiming a tax liability of $15m. The claim relates to corporate income taxes, where certain business expenses have been disallowed as a deduction for tax purposes. Management filed an objection to the assessment in September 2020 and is of the opinion that the Ghana Revenue Authority is unlikely to succeed in this matter and therefore no provision has been made.
F - 42
Guinea - Siguiri
The Guinea Tax Authority has challenged various aspects of the Companies’ tax returns for periods of 2010, and 2014 to 2016 totalling $8m (attributable) (2019: $12m (attributable);2018: $8m (attributable)). An amount of $4m relating to the years 2014 to 2016 was paid in settlement of $10m of tax claims during the second half of 2020.
Tanzania - Geita Gold Mine
The Tanzania Revenue Authority has raised audit findings on various tax matters for years from 2009 to 2019 amounting to $254m (2019: $164m; 2018: $163m) including additional tax assessments of $94m received in 2020. In addition, the Tanzania Revenue Authority has issued Agency Notices on various local bank accounts of the Company in Tanzania, enforcing payments from those bank accounts, despite the matters being on appeal. In order to continue operating its bank accounts and to not impact operations, Geita paid various amounts under protest. Management has objected and appealed through various levels of the legislative processes. Management is of the opinion that the claims of the Tanzania Revenue Authority are unlikely to succeed.
In addition, it should be noted that amendments passed to Tanzanian legislation in 2017 amended the 2010 Mining Act and new Finance Act. Effective from 1 July 2017, the gold mining royalty rate increased to 6% (from 4%) and further a 1% clearing fee on the value of all minerals exported was imposed. The group has been paying the higher royalty and clearing fees since this date, under protest and is of the view that this is in contravention of its Mining Development Agreement.
Tax impacts of COVID-19
As a result of the COVID-19 pandemic, governments have responded with various stimulus packages, to provide relief to companies and individuals, to ensure business and employment continuity. This has been achieved through various tax and employment concessions, over varying periods, mostly commencing in April 2020. In North America, the US Government passed the Coronavirus Aid, Relief and Economic Security (CARES) Act on 27 March 2020. The bill provides various tax relief and incentives such as accelerated access to tax attributes created under the Tax Cuts and Jobs Act of 2017 (TCJA). Other tax jurisdictions have provided tax relief in various forms to companies which will impact on tax planning and tax payments in the light of the uncertainty created by the pandemic. Management continues to evaluate these tax measures and applies them when appropriate.
F - 43
| 2020 | 2019 | 2018 | |||||||||||||||
| US cents per share | |||||||||||||||||
| Basic earnings (loss) per ordinary share | 227 | (3) | 32 | ||||||||||||||
| - Continuing operations | 225 | 87 | 52 | ||||||||||||||
| The calculation of basic earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of $946m (2019: $364m; 2018: $216m) and 419,033,516 (2019: 418,349,777; 2018: 417,122,155) shares being the weighted average number of ordinary shares in issue during the financial year. | |||||||||||||||||
| - Discontinued operations | 2 | (90) | (20) | ||||||||||||||
| The calculation of basic earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of $7m (2019: $(376)m; 2018: $(83)m) and 419,033,516 (2019: 418,349,777; 2018: 417,122,155) shares being the weighted average number of ordinary shares in issue during the financial year. | |||||||||||||||||
| Diluted earnings (loss) per ordinary share | 227 | (3) | 32 | ||||||||||||||
| - Continuing operations | 225 | 87 | 52 | ||||||||||||||
| The calculation of diluted earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of $946m (2019: $364m; 2018: $216m) and 419,481,450 (2019: 418,349,777; 2018: 417,379,405) shares being the diluted number of ordinary shares. | |||||||||||||||||
| - Discontinued operations | 2 | (90) | (20) | ||||||||||||||
| The calculation of diluted earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of $7m (2019: $(376)m; 2018: $(83)m) and 419,481,450 (2019: 418,349,777; 2018: 417,379,405) shares being the weighted average number of ordinary shares in issue during the financial year. | |||||||||||||||||
| 2017 | 2016 | 2015 | ||||||
| US cents per share | ||||||||
| Basic earnings (loss) per ordinary share | (46 | ) | 15 | (20 | ) | |||
| - Continuing operations | (46 | ) | 15 | 8 | ||||
| The calculation of basic earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of ($191m) (2016: $63m; 2015: $31m) and 415,440,077 (2016: 412,585,042; 2015: 409,606,858) shares being the weighted average number of ordinary shares in issue during the financial year. | ||||||||
| - Discontinued operations | — | — | (28 | ) | ||||
| The calculation of basic earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of nil (2016: nil; 2015: ($116m)) and 415,440,077 (2016: 412,585,042; 2015: 409,606,858) shares being the weighted average number of ordinary shares in issue during the financial year. | ||||||||
| Diluted earnings (loss) per ordinary share | (46 | ) | 15 | (20 | ) | |||
| - Continuing operations | (46 | ) | 15 | 8 | ||||
| The calculation of diluted earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of ($191m) (2016: $63m; 2015: $31m) and 415,440,077 (2016: 414,706,400; 2015: 411,371,341) shares being the diluted number of ordinary shares. | ||||||||
| - Discontinued operations | — | — | (28 | ) | ||||
| The calculation of diluted earnings (loss) per ordinary share is based on profits (losses) attributable to equity shareholders of nil (2016: nil; 2015: $(116m)) and 415,440,077 (2016: 414,706,400; 2015: 409,606,858) shares being the diluted number of ordinary shares. | ||||||||
In calculating the basic and diluted number of ordinary shares outstanding for the year, the following were taken into consideration:
| Number of shares | |||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||
| Ordinary shares | 416,399,307 | 414,407,622 | 411,412,947 | ||||||||||||||
Fully vested options and currently exercisable(1) | 2,634,209 | 3,942,155 | 5,709,208 | ||||||||||||||
| Weighted average number of shares | 419,033,516 | 418,349,777 | 417,122,155 | ||||||||||||||
Dilutive potential of share options(2) | 447,934 | 0 | 257,250 | ||||||||||||||
| Fully diluted number of ordinary shares | 419,481,450 | 418,349,777 | 417,379,405 | ||||||||||||||
| Number of shares | ||||||||
| 2017 | 2016 | 2015 | ||||||
| Ordinary shares | 409,265,471 | 407,519,542 | 404,747,625 | |||||
Fully vested options and currently exercisable(1) | 6,174,606 | 5,065,500 | 4,859,233 | |||||
| Weighted average number of shares | 415,440,077 | 412,585,042 | 409,606,858 | |||||
| Dilutive potential of share options | — | 2,121,358 | — | |||||
| Fully diluted number of ordinary shares | 415,440,077 | 414,706,400 | 409,606,858 | |||||
(2)The number of share options that could potentially dilute basic earnings in the future were not included as the effect was anti-dilutive were NaN (2019: 517,186; 2018:NaN).
F - 44
| Figures in millions | US Dollars | |||||||
| In calculating the diluted earnings (loss) attributable to equity shareholders, the following were taken into consideration: | ||||||||
| Profit (loss) attributable to equity shareholders | (191 | ) | 63 | (85 | ) | |||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
13 EARNINGS (LOSS) PER ORDINARY SHARE (continued)
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Headline earnings (loss) | |||||||||||||||||
| The profit (loss) attributable to equity shareholders was adjusted by the following to arrive at headline earnings (loss): | |||||||||||||||||
| Profit (loss) attributable to equity shareholders from continuing and discontinued operations | 953 | (12) | 133 | ||||||||||||||
| Net impairment (impairment reversal) on held for sale assets | (17) | 549 | (2) | ||||||||||||||
| Taxation on net impairment (impairment reversal) on held for sale assets | 0 | (165) | 0 | ||||||||||||||
| Derecognition of assets | 0 | 10 | 104 | ||||||||||||||
| Taxation on derecognition of assets | 0 | 0 | (26) | ||||||||||||||
| Loss on disposal of discontinued operations | 80 | 0 | 24 | ||||||||||||||
| Taxation on loss on disposal of discontinued operations | 1 | 0 | (20) | ||||||||||||||
Profit on sale of joint ventures (1) | (19) | 0 | 0 | ||||||||||||||
| Net loss (profit) on disposal of assets | 2 | (3) | 8 | ||||||||||||||
| Taxation on net (profit) loss on disposal of assets | 0 | 0 | (1) | ||||||||||||||
| 1,000 | 379 | 220 | |||||||||||||||
(1) Tax effect has not been disclosed as the tax is less than $1m.
| US Cents | |||||||||||||||||
| Basic headline earnings (loss) per share | |||||||||||||||||
| The calculation of basic headline earnings (loss) per ordinary share is based on basic headline earnings (losses) of $1,000m (2019: $379m; 2018: $220m) and 419,033,516 (2019: 418,349,777; 2018: 417,122,155) shares being the weighted average number of ordinary shares in issue during the year. | 238 | 91 | 53 | ||||||||||||||
| Diluted headline earnings (loss) per share | |||||||||||||||||
| The calculation of diluted headline earnings (loss) per ordinary share is based on diluted headline earnings (losses) of $1,000m (2019: $379m; 2018: $220m) and 419,481,450 (2019: 418,349,777; 2018: 417,379,405) shares being the weighted average number of ordinary shares in issue during the year. | 238 | 91 | 53 | ||||||||||||||
14 DIVIDENDS
| US Dollars | ||||||||||||||||||||
| Figures in million | 2020 | 2019 | 2018 | |||||||||||||||||
| Ordinary shares | ||||||||||||||||||||
| Dividend number 119 of 70 SA cents per share was declared on 20 February 2018 and paid on 6 April 2018 (6 US cents per share). | 24 | |||||||||||||||||||
| Dividend number 120 of 95 SA cents per share was declared on 19 February 2019 and paid on 8 April 2019 (7 US cents per share). | 27 | |||||||||||||||||||
| Dividend number 121 of 165 SA cents per share was declared on 21 February 2020 and paid on 27 March 2019 (9 US cents per share) | 38 | |||||||||||||||||||
| 38 | 27 | 24 | ||||||||||||||||||
F - 45
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Headline earnings (loss) | ||||||||
| The profit (loss) attributable to equity shareholders was adjusted by the following to arrive at headline earnings (loss): | ||||||||
| Profit (loss) attributable to equity shareholders from continuing and discontinued operations | (191 | ) | 63 | (85 | ) | |||
| Net impairment (impairment reversal) and derecognition of assets | 298 | (16 | ) | 2 | ||||
| Net (profit) loss on disposal of assets | (8 | ) | 4 | 9 | ||||
| Special items of associates and joint ventures | — | — | 3 | |||||
| Exchange loss on foreign currency translation reserve release | — | 60 | — | |||||
| Taxation on items above | (72 | ) | — | (2 | ) | |||
| 27 | 111 | (73 | ) | |||||
| US Cents | ||||||||
| Basic headline earnings (loss) per share | ||||||||
| The calculation of basic headline earnings (loss) per ordinary share is based on basic headline earnings (losses) of $27m (2016: $111m; 2015: ($73m)) and 415,440,077 (2016: 412,585,042; 2015: 409,606,858) shares being the weighted average number of ordinary shares in issue during the year. | 6 | 27 | (18 | ) | ||||
| Diluted headline earnings (loss) per share | ||||||||
| The calculation of diluted headline earnings (loss) per ordinary share is based on diluted headline earnings (losses) of $27m (2016: $111m; 2015: ($73m)) and 415,440,077 (2016: 414,706,400; 2015: 409,606,858) shares being the weighted average number of ordinary shares in issue during the year. | 6 | 27 | (18 | ) | ||||
| US Dollars | |||||||||
| Figures in million | 2017 | 2016 | 2015 | ||||||
| Ordinary shares | |||||||||
| Dividend number 118 of 130 SA cents per share was declared on 21 February 2017 and paid on 7 April 2017. (10 US cents per share) | 39 | — | — | ||||||
| 39 | — | — | |||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| Figures in millions | Mine development costs | Mine infra- structure(2) | Mineral rights and dumps | Exploration and evaluation assets | Assets under construction | Land and buildings(3)(4) | Total | ||||||||||||||||||||||||||||||||||
| US Dollars | |||||||||||||||||||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2018 | 5,562 | 4,382 | 892 | 5 | 490 | 83 | 11,414 | ||||||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||||||||
| - project capital | 2 | 0 | 0 | 0 | 175 | 0 | 177 | ||||||||||||||||||||||||||||||||||
| - stay-in-business capital | 294 | 20 | 3 | 0 | 149 | 1 | 467 | ||||||||||||||||||||||||||||||||||
| Disposals | (5) | (30) | 0 | (1) | 0 | (3) | (39) | ||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | 60 | (41) | 0 | 0 | (270) | 1 | (250) | ||||||||||||||||||||||||||||||||||
| Translation | (239) | (119) | (7) | 0 | (32) | (5) | (402) | ||||||||||||||||||||||||||||||||||
| Balance at 31 December 2018 | 5,674 | 4,212 | 888 | 4 | 512 | 77 | 11,367 | ||||||||||||||||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2018 | 3,979 | 2,796 | 853 | 3 | 26 | 15 | 7,672 | ||||||||||||||||||||||||||||||||||
| Amortisation for the year | 397 | 233 | 2 | 1 | 0 | 1 | 634 | ||||||||||||||||||||||||||||||||||
Impairment and derecognition of assets (5) | 0 | 104 | 0 | 0 | 0 | 0 | 104 | ||||||||||||||||||||||||||||||||||
| Disposals | (5) | (27) | 0 | (1) | 0 | (2) | (35) | ||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | (52) | (153) | 0 | 0 | 0 | 0 | (205) | ||||||||||||||||||||||||||||||||||
| Translation | (135) | (42) | (6) | 0 | 1 | (2) | (184) | ||||||||||||||||||||||||||||||||||
| Balance at 31 December 2018 | 4,184 | 2,911 | 849 | 3 | 27 | 12 | 7,986 | ||||||||||||||||||||||||||||||||||
| Net book value at 31 December 2018 | 1,490 | 1,301 | 39 | 1 | 485 | 65 | 3,381 | ||||||||||||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2019 | 5,674 | 4,212 | 888 | 4 | 512 | 77 | 11,367 | ||||||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||||||||
| - project capital | 43 | 0 | 0 | 1 | 281 | 14 | 339 | ||||||||||||||||||||||||||||||||||
| - stay-in-business capital | 208 | 25 | 1 | 2 | 188 | 0 | 424 | ||||||||||||||||||||||||||||||||||
| Disposals | (1) | (16) | 0 | 0 | 0 | 0 | (17) | ||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | (259) | 219 | 1 | 0 | (489) | (16) | (544) | ||||||||||||||||||||||||||||||||||
| Transfer to non-current assets and liabilities held for sale | (660) | (663) | (9) | 0 | (90) | (9) | (1,431) | ||||||||||||||||||||||||||||||||||
| Finance costs capitalised | 0 | 0 | 0 | 0 | 6 | 0 | 6 | ||||||||||||||||||||||||||||||||||
| Translation | (4) | (1) | 0 | 0 | (3) | 0 | (8) | ||||||||||||||||||||||||||||||||||
| Balance at 31 December 2019 | 5,001 | 3,776 | 881 | 7 | 405 | 66 | 10,136 | ||||||||||||||||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2019 | 4,184 | 2,911 | 849 | 3 | 27 | 12 | 7,986 | ||||||||||||||||||||||||||||||||||
| Amortisation for the year | 392 | 215 | 1 | 1 | 0 | 0 | 609 | ||||||||||||||||||||||||||||||||||
Impairment and derecognition of assets(5) | 243 | 172 | 0 | 0 | 90 | 0 | 505 | ||||||||||||||||||||||||||||||||||
| Disposals | (1) | (15) | 0 | 0 | 0 | 0 | (16) | ||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | (455) | (53) | 1 | 0 | (3) | (12) | (522) | ||||||||||||||||||||||||||||||||||
| Transfer to non-current assets and liabilities held for sale | (488) | (422) | (5) | 0 | (88) | 0 | (1,003) | ||||||||||||||||||||||||||||||||||
| Translation | (9) | (5) | 0 | 0 | (1) | 0 | (15) | ||||||||||||||||||||||||||||||||||
| Balance at 31 December 2019 | 3,866 | 2,803 | 846 | 4 | 25 | 0 | 7,544 | ||||||||||||||||||||||||||||||||||
| Net book value at 31 December 2019 | 1,135 | 973 | 35 | 3 | 380 | 66 | 2,592 | ||||||||||||||||||||||||||||||||||
F - 46
| Figures in millions | Mine development costs | Mine infra- structure(2) | Mineral rights and dumps | Exploration and evaluation assets | Assets under construction | Land and buildings(3)(4) | Total | |||||||||||||
| US Dollars | ||||||||||||||||||||
| Cost | ||||||||||||||||||||
| Balance at 1 January 2015 | 7,238 | 5,369 | 958 | 35 | 757 | 88 | 14,445 | |||||||||||||
| Additions | ||||||||||||||||||||
| - project capital | 19 | 1 | — | — | 102 | 6 | 128 | |||||||||||||
| - stay-in-business capital | 345 | 57 | — | — | 158 | 1 | 561 | |||||||||||||
| - capitalised leased assets | — | 62 | — | — | — | — | 62 | |||||||||||||
| Disposals | (113 | ) | (772 | ) | (25 | ) | (29 | ) | (291 | ) | (7 | ) | (1,237 | ) | ||||||
Transfers and other movements(1) | (497 | ) | (4 | ) | — | (1 | ) | (298 | ) | (1 | ) | (801 | ) | |||||||
| Translation | (710 | ) | (281 | ) | (19 | ) | — | (72 | ) | (9 | ) | (1,091 | ) | |||||||
| Balance at 31 December 2015 | 6,282 | 4,432 | 914 | 5 | 356 | 78 | 12,067 | |||||||||||||
| Accumulated amortisation and impairments | ||||||||||||||||||||
| Balance at 1 January 2015 | 5,045 | 3,515 | 893 | 32 | 79 | 18 | 9,582 | |||||||||||||
| Amortisation for the year | 475 | 257 | 6 | 1 | — | 1 | 740 | |||||||||||||
| Impairment and derecognition of assets | 4 | 1 | — | — | — | — | 5 | |||||||||||||
| Disposals | (113 | ) | (727 | ) | (25 | ) | (29 | ) | (49 | ) | (6 | ) | (949 | ) | ||||||
Transfers and other movements(1) | (458 | ) | (346 | ) | — | (1 | ) | (1 | ) | — | (806 | ) | ||||||||
| Translation | (465 | ) | (82 | ) | (12 | ) | (1 | ) | — | (3 | ) | (563 | ) | |||||||
| Balance at 31 December 2015 | 4,488 | 2,618 | 862 | 2 | 29 | 10 | 8,009 | |||||||||||||
| Net book value at 31 December 2015 | 1,794 | 1,814 | 52 | 3 | 327 | 68 | 4,058 | |||||||||||||
| Cost | ||||||||||||||||||||
| Balance at 1 January 2016 | 6,282 | 4,432 | 914 | 5 | 356 | 78 | 12,067 | |||||||||||||
| Additions | ||||||||||||||||||||
| - project capital | 25 | 4 | — | — | 64 | — | 93 | |||||||||||||
| - stay-in-business capital | 363 | 54 | 1 | — | 192 | 1 | 611 | |||||||||||||
| - capitalised leased assets | — | 2 | — | — | — | — | 2 | |||||||||||||
| Disposals | (45 | ) | (46 | ) | — | — | — | — | (91 | ) | ||||||||||
Transfers and other movements(1) | (884 | ) | 25 | — | — | (190 | ) | — | (1,049 | ) | ||||||||||
| Translation | 202 | 105 | 4 | — | 28 | 3 | 342 | |||||||||||||
| Balance at 31 December 2016 | 5,943 | 4,576 | 919 | 5 | 450 | 82 | 11,975 | |||||||||||||
| Accumulated amortisation and impairments | ||||||||||||||||||||
| Balance at 1 January 2016 | 4,488 | 2,618 | 862 | 2 | 29 | 10 | 8,009 | |||||||||||||
| Amortisation for the year | 546 | 254 | 4 | 1 | — | 1 | 806 | |||||||||||||
| Impairment and derecognition of assets | 1 | 2 | — | — | — | — | 3 | |||||||||||||
| Disposals | (43 | ) | (43 | ) | — | — | — | — | (86 | ) | ||||||||||
Transfers and other movements(1) | (964 | ) | (70 | ) | — | — | (3 | ) | — | (1,037 | ) | |||||||||
| Translation | 135 | 31 | 2 | — | — | 1 | 169 | |||||||||||||
| Balance at 31 December 2016 | 4,163 | 2,792 | 868 | 3 | 26 | 12 | 7,864 | |||||||||||||
| Net book value at 31 December 2016 | 1,780 | 1,784 | 51 | 2 | 424 | 70 | 4,111 | |||||||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions | Mine development costs | Mine infra- structure(2) | Mineral rights and dumps | Exploration and evaluation assets | Assets under construction | Land and buildings(3)(4) | Total | ||||||||||||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2020 | 5,001 | 3,776 | 881 | 7 | 405 | 66 | 10,136 | ||||||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||||||||
| - project capital | 64 | 0 | 0 | 1 | 246 | 20 | 331 | ||||||||||||||||||||||||||||||||||
| - stay-in-business capital | 180 | 8 | 1 | 0 | 179 | 2 | 370 | ||||||||||||||||||||||||||||||||||
Finance costs capitalised (5) | 0 | 0 | 0 | 0 | 17 | 0 | 17 | ||||||||||||||||||||||||||||||||||
| Disposals | (1) | (26) | 0 | 0 | 0 | 0 | (27) | ||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | (1,076) | 186 | (699) | 2 | (320) | 24 | (1,883) | ||||||||||||||||||||||||||||||||||
| Translation | 157 | 9 | 5 | (1) | 6 | 0 | 176 | ||||||||||||||||||||||||||||||||||
| Balance at 31 December 2020 | 4,325 | 3,953 | 188 | 9 | 533 | 112 | 9,120 | ||||||||||||||||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2020 | 3,866 | 2,803 | 846 | 4 | 25 | 0 | 7,544 | ||||||||||||||||||||||||||||||||||
| Amortisation for the year | 345 | 179 | 5 | 1 | 0 | 0 | 530 | ||||||||||||||||||||||||||||||||||
| Disposals | (1) | (25) | 0 | 0 | 0 | 0 | (26) | ||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | (1,208) | (33) | (699) | 0 | 0 | 0 | (1,940) | ||||||||||||||||||||||||||||||||||
| Translation | 117 | 6 | 4 | 0 | 1 | 0 | 128 | ||||||||||||||||||||||||||||||||||
| Balance at 31 December 2020 | 3,119 | 2,930 | 156 | 5 | 26 | 0 | 6,236 | ||||||||||||||||||||||||||||||||||
| Net book value at 31 December 2020 | 1,206 | 1,023 | 32 | 4 | 507 | 112 | 2,884 | ||||||||||||||||||||||||||||||||||
(1)Transfers and other movements include amounts from deferred stripping, changes in estimates of decommissioning assets, asset reclassifications, derecognition of assets and initial recognition of joint operation share of property, plant and equipment.
| Figures in millions | Mine development costs | Mine infra- structure(2) | Mineral rights and dumps | Exploration and evaluation assets | Assets under construction | Land and buildings(3)(4) | Total | |||||||||||||
| Cost | ||||||||||||||||||||
| Balance at 1 January 2017 | 5,943 | 4,576 | 919 | 5 | 450 | 82 | 11,975 | |||||||||||||
| Additions | ||||||||||||||||||||
| - project capital | 28 | 3 | — | — | 125 | — | 156 | |||||||||||||
| - stay-in-business capital | 371 | 37 | — | — | 257 | — | 665 | |||||||||||||
| Disposals | (1 | ) | (20 | ) | — | — | — | — | (21 | ) | ||||||||||
Transfers and other movements(1) | (168 | ) | (21 | ) | (27 | ) | — | (291 | ) | 1 | (506 | ) | ||||||||
Transfer to non-current assets and liabilities held for sale | (785 | ) | (281 | ) | (7 | ) | — | (72 | ) | (3 | ) | (1,148 | ) | |||||||
| Translation | 174 | 88 | 7 | — | 21 | 3 | 293 | |||||||||||||
| Balance at 31 December 2017 | 5,562 | 4,382 | 892 | 5 | 490 | 83 | 11,414 | |||||||||||||
| Accumulated amortisation and impairments | ||||||||||||||||||||
| Balance at 1 January 2017 | 4,163 | 2,792 | 868 | 3 | 26 | 12 | 7,864 | |||||||||||||
| Amortisation for the year | 553 | 272 | 3 | — | — | 1 | 829 | |||||||||||||
Impairment and derecognition of assets(5) | 182 | 62 | 8 | — | 1 | — | 253 | |||||||||||||
| Disposals | (1 | ) | (20 | ) | — | — | — | — | (21 | ) | ||||||||||
Transfers and other movements(1) | (326 | ) | (163 | ) | (27 | ) | — | — | — | (516 | ) | |||||||||
| Transfer to non-current assets and liabilities held for sale | (685 | ) | (169 | ) | (4 | ) | — | (1 | ) | — | (859 | ) | ||||||||
| Translation | 93 | 22 | 5 | — | — | 2 | 122 | |||||||||||||
| Balance at 31 December 2017 | 3,979 | 2,796 | 853 | 3 | 26 | 15 | 7,672 | |||||||||||||
| Net book value at 31 December 2017 | 1,583 | 1,586 | 39 | 2 | 464 | 68 | 3,742 | |||||||||||||
(3)Included in the amounts for land and buildings are assets held under finance leases with a net book value of NaN (2019: NaN; 2018: $3m).
(4)Assets of $7m (2019: $9m; 2018: $10m) have been pledged as security.
(5)The weighted average capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation was 4.52% (2019: 5.6%; 2018: NaN)
(6)Impairment and derecognition of assets is assessed as follows:
Impairment calculation assumptions as at 31 December 20172020 - goodwill, tangible and intangible assets
Management assumptions for the value in use of tangible assets and goodwill include:
•the gold price assumption represents management’s best estimate of the future price of gold. A long-term real gold price of $1,240/$1,450/oz (2016: $1,212/(2019: $1,300/oz; 2018: $1,239/oz) is based on a range of economic and market conditions that will exist over the remaining useful life of the assets.
Annual life of mine plans take into account the following:
•proved and probable Ore Reserve;
•value beyond proved and probable reservesOre Reserve (including exploration potential) determined using the gold price assumption referred to above;
•foreign currency cash flows translated at estimated forward exchange rates and then discounted using appropriate discount rates for that currency;
•cash flows used in impairment calculations are based on life of mine plans which range from 26 years to 4226 years; and
•variable operating cash flows are increased at local Consumer Price Index rates.
F - 47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Impairments and derecognitions of tangible assets
For theyear ended 31 December, 2017, the following impairments and derecognitions of tangible assets were recognised:recognised for the following cash generating units (CGU's):
| Figures in millions - US Dollars | 2019 (1) | 2018 | |||||||||
| First Uranium - Mine Waste Solutions | 89 | 93 | |||||||||
| Surface Operations | 18 | 1 | |||||||||
| Mponeng | 384 | 4 | |||||||||
| Covalent | 11 | 0 | |||||||||
| Obuasi | 0 | 5 | |||||||||
| Siguiri | 2 | 0 | |||||||||
| AGA Mineração | 1 | 0 | |||||||||
| Other | 0 | 1 | |||||||||
| 505 | 104 | ||||||||||
(1) Includes impairment of the South African asset disposal group, measured at fair value less costs to sell and disclosed in Discontinued operations. Refer to note 9.
Impairment of cash generating units
The group reviews and tests the carrying value of its mining assets when events or changes in circumstances suggest that the carrying amount may not be recoverable.
Based on an analysis carried out by the group in 2020, the carrying value and value in use of the most sensitive CGU are:
| Figures in millions - US Dollars | Carrying value | Value in use | ||||||
Kibali (1)(2) | 1,482 | 1,614 | ||||||
(1) It is estimated that a decrease of the long-term real gold price of $1,450/oz by 4.4%, would cause the recoverable amount of Kibali to equal its carrying amount using a real post-tax weighted average cost of capital (WACC) discount rate of 12.5% (2019: 9.7%). The sensitivity analysis has been provided on the basis that the key assumption changes without a change in mine plans to restructure the South African operations, Kopanang mine, TauTona mine including Savuka section and the West Gold Plant sectionother assumptions. However, for a change in each of the Surface operationsassumptions used, it is impracticable to disclose the consequential effect of changes on the other variables used to measure the recoverable amount because these assumptions and others used in South Africa were fully impaired as they were not expected to generate future economic benefits.impairment testing are inextricably linked.
F - Non-current assets and liabilities held for sale.48
| Figures in millions | Goodwill | Software and licences | Royalty tax rate concession and other | Total | |||||||
| US Dollars | |||||||||||
| Cost | |||||||||||
| Balance at 1 January 2015 | 400 | 152 | 60 | 612 | |||||||
| Additions | — | 3 | — | 3 | |||||||
| Disposals | — | (9 | ) | — | (9 | ) | |||||
Transfers and other movements(1) | — | (10 | ) | — | (10 | ) | |||||
| Translation | (20 | ) | (18 | ) | — | (38 | ) | ||||
| Balance at 31 December 2015 | 380 | 118 | 60 | 558 | |||||||
| Accumulated amortisation and impairments | |||||||||||
| Balance at 1 January 2015 | 258 | 82 | 47 | 387 | |||||||
| Amortisation for the year | 37 | 3 | 40 | ||||||||
| Disposals | — | (7 | ) | — | (7 | ) | |||||
Transfers and other movements(1) | — | (7 | ) | — | (7 | ) | |||||
| Translation | (4 | ) | (12 | ) | — | (16 | ) | ||||
| Balance at 31 December 2015 | 254 | 93 | 50 | 397 | |||||||
| Net book value at 31 December 2015 | 126 | 25 | 10 | 161 | |||||||
| Cost | |||||||||||
| Balance at 1 January 2016 | 380 | 118 | 60 | 558 | |||||||
| Additions | — | 5 | — | 5 | |||||||
Transfers and other movements(1) | — | (4 | ) | — | (4 | ) | |||||
| Translation | (1 | ) | 6 | — | 5 | ||||||
| Balance at 31 December 2016 | 379 | 125 | 60 | 564 | |||||||
| Accumulated amortisation and impairments | |||||||||||
| Balance at 1 January 2016 | 254 | 93 | 50 | 397 | |||||||
| Amortisation for the year | 16 | 4 | 20 | ||||||||
Transfers and other movements(1) | — | (3 | ) | — | (3 | ) | |||||
| Translation | (1 | ) | 6 | — | 5 | ||||||
| Balance at 31 December 2016 | 253 | 112 | 54 | 419 | |||||||
| Net book value at 31 December 2016 | 126 | 13 | 6 | 145 | |||||||
| Cost | |||||||||||
| Balance at 1 January 2017 | 379 | 125 | 60 | 564 | |||||||
| Additions | — | 1 | — | 1 | |||||||
| Transfer to non-current assets and liabilities held for sale | — | (17 | ) | — | (17 | ) | |||||
Transfers and other movements(1) | (263 | ) | (1 | ) | — | (264 | ) | ||||
| Translation | 11 | 4 | — | 15 | |||||||
| Balance at 31 December 2017 | 127 | 112 | 60 | 299 | |||||||
| Accumulated amortisation and impairments | |||||||||||
| Balance at 1 January 2017 | 253 | 112 | 54 | 419 | |||||||
| Amortisation for the year | 3 | 3 | 6 | ||||||||
| Impairment | 9 | — | — | 9 | |||||||
| Transfer to non-current assets and liabilities held for sale | — | (15 | ) | — | (15 | ) | |||||
Transfers and other movements(1) | (263 | ) | (1 | ) | — | (264 | ) | ||||
| Translation | 1 | 5 | — | 6 | |||||||
| Balance at 31 December 2017 | — | 104 | 57 | 161 | |||||||
| Net book value at 31 December 2017 | 127 | 8 | 3 | 138 | |||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
16 RIGHT OF USE ASSETS AND LEASE LIABILITIES
The group leases various assets including buildings, plant and equipment and vehicles. The group’s lease obligations are secured by the lessors’ title to the leased assets for such leases.
RIGHT OF USE ASSETS
| US dollar millions | Mine Infra- structure | Land and buildings | Total | ||||||||||||||||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||||||||||||||
| Impact of adopting IFRS 16 - 1 January 2019 | 119 | 9 | 128 | ||||||||||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||||||||
| - stay-in-business capital | 32 | 0 | 32 | ||||||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | 58 | 15 | 73 | ||||||||||||||||||||||||||||||||||||||
| Transfer to assets and liabilities held for sale | 0 | (1) | (1) | ||||||||||||||||||||||||||||||||||||||
| Translation | 0 | 1 | 1 | ||||||||||||||||||||||||||||||||||||||
| Balance at 31 December 2019 | 209 | 24 | 233 | ||||||||||||||||||||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2019 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||
| Amortisation for the year | 40 | 2 | 42 | ||||||||||||||||||||||||||||||||||||||
Transfers and other movements(1) | 21 | 12 | 33 | ||||||||||||||||||||||||||||||||||||||
| Balance at 31 December 2019 | 61 | 14 | 75 | ||||||||||||||||||||||||||||||||||||||
| Net book value at 31 December 2019 | 148 | 10 | 158 | ||||||||||||||||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2020 | 209 | 24 | 233 | ||||||||||||||||||||||||||||||||||||||
| Additions | |||||||||||||||||||||||||||||||||||||||||
| - stay-in-business capital | 23 | 0 | 23 | ||||||||||||||||||||||||||||||||||||||
| Derecognition and other movements | (13) | 1 | (12) | ||||||||||||||||||||||||||||||||||||||
| Translation | 14 | (1) | 13 | ||||||||||||||||||||||||||||||||||||||
| Balance at 31 December 2020 | 233 | 24 | 257 | ||||||||||||||||||||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||||||||||||||||||||
| Balance at 1 January 2020 | 61 | 14 | 75 | ||||||||||||||||||||||||||||||||||||||
| Amortisation for the year | 45 | 2 | 47 | ||||||||||||||||||||||||||||||||||||||
| Derecognition of assets | (11) | 0 | (11) | ||||||||||||||||||||||||||||||||||||||
| Translation | 5 | (1) | 4 | ||||||||||||||||||||||||||||||||||||||
| Balance at 31 December 2020 | 100 | 15 | 115 | ||||||||||||||||||||||||||||||||||||||
Net book value at 31 December 2020 | 133 | 9 | 142 | ||||||||||||||||||||||||||||||||||||||
(1) Relates to contracts previously classified as leases under IAS 17, which the group has reassessed upon initial transition as leases under IFRS 16 as of 1 January 2019.
F - 49
16. RIGHT OF USE ASSETS AND LEASE LIABILITIES (continued)
LEASE EXPENSES
| US dollar millions | 2020 | 2019 | ||||||
| Amounts recognised in the income statement | ||||||||
| Amortisation expense on right of use assets (note 4) | 47 | 42 | ||||||
| Interest expense on lease liabilities (note 7) | 8 | 10 | ||||||
| Expenses on short term leases | 107 | 83 | ||||||
Expenses on variable lease payments not included in the lease liabilities(1) | 234 | 220 | ||||||
Expenses on leases of low value assets(1) | 24 | 2 | ||||||
(1) Includes expenses at Obuasi that have been capitalised as part of the re-development project.
These expenses are allocated to cost of sales and corporate administration, marketing and other costs.
Total cash outflow for leases during the period amounted to $55m (2019: $51m), consisting of repayments of liabilities of $47m (2019: $42m) and finance costs paid of $8m (2019: $9m).
LEASE LIABILITIES
| US Dollar million | 2020 | 2019 | ||||||
| Reconciliation of lease liabilities | ||||||||
| A reconciliation of the lease liabilities included in the statement of financial position is set out in the following table: | ||||||||
| Opening balance | 171 | 0 | ||||||
| Lease liabilities recognised | 23 | 160 | ||||||
| Repayment of lease liabilities | (47) | (42) | ||||||
| Finance costs paid on lease liabilities | (8) | (9) | ||||||
| Interest charged to the income statement | 8 | 10 | ||||||
| Reclassification of finance leases from borrowings | 0 | 60 | ||||||
| Change in estimate | (1) | (5) | ||||||
| Translation | 7 | (3) | ||||||
| Closing balance | 153 | 171 | ||||||
| Lease finance costs paid included in the statement of cash flows | 8 | 9 | ||||||
| US Dollar million | 2020 | 2019 | ||||||
| Maturity analysis of lease liabilities | ||||||||
| Undiscounted cash flows | ||||||||
| Less than and including 1 year | 43 | 52 | ||||||
| Between 1 and 5 years | 83 | 89 | ||||||
| Five years and more | 36 | 57 | ||||||
| Total | 162 | 198 | ||||||
F - 50
16. RIGHT OF USE ASSETS AND LEASE LIABILITIES (continued)
| US Dollar million | 2020 | 2019 | ||||||
| Lease liabilities | ||||||||
| Non-current | 116 | 126 | ||||||
| Current | 37 | 45 | ||||||
| Total | 153 | 171 | ||||||
The group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the group’s treasury function.
All lease contracts contain market review clauses in the event that the group exercises its option to renew.
Certain of the group’s contracts have a payment structure that is variable in nature and hence do not qualify for IFRS 16 lease accounting. These contracts consist of mostly mining and drilling contracts. The variable nature of these contracts is to allow equal sharing of pain and gain between the group and its contractors. The cash flows are not disclosed as their variability does not permit reliable forecasts. Short-term, low value and variable contracts continue to be recognised within cost of sales and corporate administration, marketing and other costs.
The weighted average incremental borrowing rate at the end of 31 December 2020 is 5.38% (2019: 4.72%).
F - 51
17 INTANGIBLE ASSETS
| Figures in millions | Goodwill | Other | Total | ||||||||||||||||||||
| US Dollars | |||||||||||||||||||||||
| Cost | |||||||||||||||||||||||
| Balance at 1 January 2018 | 127 | 172 | 299 | ||||||||||||||||||||
| Additions | 0 | 1 | 1 | ||||||||||||||||||||
| Disposals | 0 | (3) | (3) | ||||||||||||||||||||
Transfers and other movements(1) | 0 | 4 | 4 | ||||||||||||||||||||
| Translation | (11) | (7) | (18) | ||||||||||||||||||||
| Balance at 31 December 2018 | 116 | 167 | 283 | ||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||
| Balance at 1 January 2018 | 0 | 161 | 161 | ||||||||||||||||||||
| Amortisation for the year | 0 | 5 | 5 | ||||||||||||||||||||
| Disposals | 0 | (3) | (3) | ||||||||||||||||||||
Transfers and other movements(1) | 0 | 4 | 4 | ||||||||||||||||||||
| Translation | 0 | (7) | (7) | ||||||||||||||||||||
| Balance at 31 December 2018 | 0 | 160 | 160 | ||||||||||||||||||||
| Net book value at 31 December 2018 | 116 | 7 | 123 | ||||||||||||||||||||
| Cost | |||||||||||||||||||||||
| Balance at 1 January 2019 | 116 | 167 | 283 | ||||||||||||||||||||
| Transfer to assets and liabilities held for sale | 0 | (26) | (26) | ||||||||||||||||||||
Transfers and other movements(1) | 0 | 3 | 3 | ||||||||||||||||||||
| Balance at 31 December 2019 | 116 | 144 | 260 | ||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||
| Balance at 1 January 2019 | 0 | 160 | 160 | ||||||||||||||||||||
| Amortisation for the year | 0 | 3 | 3 | ||||||||||||||||||||
| Transfer to assets and liabilities held for sale | 0 | (26) | (26) | ||||||||||||||||||||
| Balance at 31 December 2019 | 0 | 137 | 137 | ||||||||||||||||||||
| Net book value at 31 December 2019 | 116 | 7 | 123 | ||||||||||||||||||||
| Cost | |||||||||||||||||||||||
| Balance at 1 January 2020 | 116 | 144 | 260 | ||||||||||||||||||||
| Additions | 0 | 1 | 1 | ||||||||||||||||||||
Transfers and other movements(1) | 0 | (49) | (49) | ||||||||||||||||||||
| Translation | 10 | 0 | 10 | ||||||||||||||||||||
| Balance at 31 December 2020 | 126 | 96 | 222 | ||||||||||||||||||||
| Accumulated amortisation and impairments | |||||||||||||||||||||||
| Balance at 1 January 2020 | 0 | 137 | 137 | ||||||||||||||||||||
| Amortisation for the year | 0 | 2 | 2 | ||||||||||||||||||||
Transfers and other movements (1) | 0 | (49) | (49) | ||||||||||||||||||||
| Translation | 0 | 1 | 1 | ||||||||||||||||||||
| Balance at 31 December 2020 | 0 | 91 | 91 | ||||||||||||||||||||
| Net book value at 31 December 2020 | 126 | 5 | 131 | ||||||||||||||||||||
(1)Transfers and other movements include amounts from asset reclassifications and amounts written off.
F - 52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
17 INTANGIBLE ASSETS(continued)
Impairment calculation assumptions for goodwill
Based on an analysis carried out by the group in 2017,2020, the carrying value and value in use of cash generating units (CGUs)the most sensitive CGU with goodwill that were most sensitive is:
| 2020 | |||||||||||
| US Dollars | |||||||||||
| Figures in millions | Carrying Value | Value in use | |||||||||
| Sunrise Dam | 229 | 538 | |||||||||
| 2017 | |||||
| US Dollars | |||||
| Figures in millions | Carrying Value | Value in use | |||
| AngloGold Ashanti Australia Limited - Sunrise Dam | 233 | 402 | |||
As at 31 December 2017,2020, the recoverable amount of AngloGold Ashanti Australia Limited - Sunrise Dam exceeded its carrying amount by $169m. The AngloGold Ashanti Australia Limited$309m. Sunrise Dam CGU had $119m$118m goodwill at that date.
It is estimated that a decrease of the long termlong-term real gold price of $1,240/$1,450/oz by 7%8%, would cause the recoverable amount of this CGU to equal its carrying amount. The sensitivity analysis has been provided on the basis that the key assumption changes without a change in the other assumptions. However, for a change in each of the assumptions used, it is impracticable to disclose the consequential effect of changes on the other variables used to measure the recoverable amount because these assumptions and others used in impairment testing of goodwill are inextricably linked.
Therefore, it is possible that outcomes within the next financial year that are different from the assumptions used in the impairment testing process for goodwill could require a material adjustment to the carrying amounts in future periods.
Net book value of goodwill allocated to each of the CGUs:
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| - Sunrise Dam | 118 | 108 | 108 | ||||||||||||||
| - Serra Grande | 8 | 8 | 8 | ||||||||||||||
| 126 | 116 | 116 | |||||||||||||||
| Real pre-tax discount rates applied in impairment calculations on the CGU for which the carrying amount of goodwill is significant is as follows: | |||||||||||||||||
- Sunrise Dam (1) | 8.7 | % | 10.8 | % | 8.3 | % | |||||||||||
Goodwill has been allocated to its respective CGUs where it is tested for impairment as part of the CGU . The group reviews and tests the carrying value of goodwill on an annual basis for impairment. The discount rates for 2020 were determined on a basis consistent with the 2019 discount rates.
(1)The value in use of the CGU is $538m in 2020 (2019: $363m; 2018: $750m).
F - 53
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| - Sunrise Dam | 119 | 110 | 111 | |||||
- First Uranium (Pty) Limited (1) | — | 8 | 7 | |||||
| - Serra Grande | 8 | 8 | 8 | |||||
| (note 2) | 127 | 126 | 126 | |||||
| Real pre-tax discount rates applied in impairment calculations on CGUs for which the carrying amount of goodwill is significant are as follows: | ||||||||
- Sunrise Dam(2) | 8.3 | % | 8.8 | % | 7.9 | % | ||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(continued)
18 MATERIAL PARTLY-OWNED SUBSIDIARIES
| Name | Non-controlling interest holding | Country of incorporation and operation | |||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||
| Cerro Vanguardia S.A. (CVSA) | 7.5 | % | 7.5 | % | 7.5 | % | Argentina | ||||||||||||||||
| Société AngloGold Ashanti de Guinée S.A. (Siguiri) | 15 | % | 15 | % | 15 | % | Republic of Guinea | ||||||||||||||||
| Name | Non-controlling interest holding | Country of incorporation and operation | ||||||||
| 2017 | 2016 | 2015 | ||||||||
| Cerro Vanguardia S.A. (CVSA) | 7.5 | % | 7.5 | % | 7.5 | % | Argentina | |||
| Société AngloGold Ashanti de Guinée S.A. (Siguiri) | 15 | % | 15 | % | 15 | % | Republic of Guinea | |||
Financial information of subsidiaries that have material non-controlling interests are provided below:
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Profit (loss) allocated to material non-controlling interests | |||||||||||||||||
| CVSA | 8 | 5 | 9 | ||||||||||||||
| Siguiri | 10 | 0 | 8 | ||||||||||||||
| Accumulated balances of material non-controlling interests | |||||||||||||||||
| CVSA | 14 | 13 | 14 | ||||||||||||||
| Siguiri | 31 | 23 | 32 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Profit allocated to material non-controlling interest | ||||||||
| CVSA | 7 | 6 | 4 | |||||
| Siguiri | 13 | 11 | 8 | |||||
| Accumulated balances of material non-controlling interests | ||||||||
| CVSA | 13 | 15 | 15 | |||||
| Siguiri | 32 | 28 | 26 | |||||
Summarised financial information of subsidiaries is as follows. The information is based on amounts including inter-company balances.
| US Dollars | |||||||||||
| Figures in millions | CVSA | Siguiri | |||||||||
| Statement of profit or loss for 2020 | |||||||||||
| Revenue | 440 | 453 | |||||||||
| Profit (loss) for the year | 84 | 68 | |||||||||
| Total comprehensive income (loss) for the year, net of tax | 84 | 68 | |||||||||
| Attributable to non-controlling interests | 8 | 10 | |||||||||
| Dividends paid to non-controlling interests | (6) | (3) | |||||||||
| Statement of profit or loss for 2019 | |||||||||||
| Revenue | 390 | 349 | |||||||||
| Profit (loss) for the year | 68 | 1 | |||||||||
| Total comprehensive income (loss) for the year, net of tax | 68 | 1 | |||||||||
| Attributable to non-controlling interests | 5 | 0 | |||||||||
| Dividends paid to non-controlling interests | (7) | (9) | |||||||||
| Statement of profit or loss for 2018 | |||||||||||
| Revenue | 498 | 365 | |||||||||
| Profit (loss) for the year | 119 | 56 | |||||||||
| Total comprehensive income (loss) for the year, net of tax | 119 | 56 | |||||||||
| Attributable to non-controlling interests | 9 | 8 | |||||||||
| Dividends paid to non-controlling interests | (7) | (8) | |||||||||
F - 54
| US Dollars | |||||
| Figures in millions | CVSA | Siguiri | |||
| Statement of profit or loss for 2017 | |||||
| Revenue | 517 | 489 | |||
| Profit (loss) for the year | 96 | 88 | |||
| Total comprehensive income (loss) for the year, net of tax | 96 | 88 | |||
| Attributable to non-controlling interests | 7 | 13 | |||
| Dividends paid to non-controlling interests | (9 | ) | (10 | ) | |
| Statement of profit or loss for 2016 | |||||
| Revenue | 472 | 367 | |||
| Profit (loss) for the year | 81 | 74 | |||
| Total comprehensive income (loss) for the year, net of tax | 81 | 74 | |||
| Attributable to non-controlling interests | 6 | 11 | |||
| Dividends paid to non-controlling interests | (6 | ) | (9 | ) | |
| Statement of profit or loss for 2015 | |||||
| Revenue | 399 | 350 | |||
| Profit (loss) for the year | 57 | 50 | |||
| Total comprehensive income (loss) for the year, net of tax | 57 | 50 | |||
| Attributable to non-controlling interests | 4 | 8 | |||
| Dividends paid to non-controlling interests | — | (4 | ) | ||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Summarised financial information of subsidiaries is as follows. The information is based on amounts before inter-company eliminations.
| US Dollars | |||||||||||
| Figures in millions | CVSA | Siguiri | |||||||||
| Statement of financial position as at 31 December 2020 | |||||||||||
| Non-current assets | 202 | 233 | |||||||||
Current assets (1) | 254 | 224 | |||||||||
| Non-current liabilities | (123) | (138) | |||||||||
| Current liabilities | (150) | (117) | |||||||||
| Total equity | 183 | 202 | |||||||||
| Statement of financial position as at 31 December 2019 | |||||||||||
| Non-current assets | 177 | 245 | |||||||||
| Current assets | 202 | 170 | |||||||||
| Non-current liabilities | (120) | (141) | |||||||||
| Current liabilities | (82) | (121) | |||||||||
| Total equity | 177 | 153 | |||||||||
| Statement of financial position as at 31 December 2018 | |||||||||||
| Non-current assets | 176 | 257 | |||||||||
| Current assets | 215 | 157 | |||||||||
| Non-current liabilities | (112) | (64) | |||||||||
| Current liabilities | (78) | (137) | |||||||||
| Total equity | 201 | 213 | |||||||||
| Statement of cash flows for the year ended 31 December 2020 | |||||||||||
| Cash inflow (outflow) from operating activities | 169 | 63 | |||||||||
| Cash inflow (outflow) from investing activities | (16) | (30) | |||||||||
| Cash inflow (outflow) from financing activities | (59) | (11) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 94 | 22 | |||||||||
| Statement of cash flows for the year ended 31 December 2019 | |||||||||||
| Cash inflow (outflow) from operating activities | 107 | 46 | |||||||||
| Cash inflow (outflow) from investing activities | (30) | (22) | |||||||||
| Cash inflow (outflow) from financing activities | (47) | (30) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 30 | (6) | |||||||||
| Statement of cash flows for the year ended 31 December 2018 | |||||||||||
| Cash inflow (outflow) from operating activities | 179 | 84 | |||||||||
| Cash inflow (outflow) from investing activities | (36) | (96) | |||||||||
| Cash inflow (outflow) from financing activities | (140) | (6) | |||||||||
| Net increase (decrease) in cash and cash equivalents | 3 | (18) | |||||||||
(1) CVSA had a cash balance of $137m equivalent as at 31 December 2020, of which $50m is currently eligible to be declared as dividends. Application has been made to the Central Argentine Bank to approve $11m of this eligible amount to be paid offshore to AngloGold Ashanti. Approval is pending. The cash is fully available for CVSA’s operational requirements.
F - 55
| US Dollars | |||||
| Figures in millions | CVSA | Siguiri | |||
| Statement of financial position as at 31 December 2017 | |||||
| Non-current assets | 193 | 206 | |||
| Current assets | 171 | 189 | |||
| Non-current liabilities | (103 | ) | (101 | ) | |
| Current liabilities | (84 | ) | (82 | ) | |
| Total equity | 177 | 212 | |||
| Statement of financial position as at 31 December 2016 | |||||
| Non-current assets | 241 | 174 | |||
| Current assets | 177 | 178 | |||
| Non-current liabilities | (108 | ) | (79 | ) | |
| Current liabilities | (107 | ) | (85 | ) | |
| Total equity | 203 | 188 | |||
| Statement of financial position as at 31 December 2015 | |||||
| Non-current assets | 245 | 151 | |||
| Current assets | 182 | 158 | |||
| Non-current liabilities | (114 | ) | (79 | ) | |
| Current liabilities | (109 | ) | (55 | ) | |
| Total equity | 204 | 175 | |||
| Statement of cash flows for the year ended 31 December 2017 | |||||
| Cash inflow (outflow) from operating activities | 189 | 152 | |||
| Cash inflow (outflow) from investing activities | (55 | ) | (82 | ) | |
| Cash inflow (outflow) from financing activities | (118 | ) | (58 | ) | |
| Net increase (decrease) in cash and cash equivalents | 16 | 12 | |||
| Statement of cash flows for the year ended 31 December 2016 | |||||
| Cash inflow (outflow) from operating activities | 110 | 120 | |||
| Cash inflow (outflow) from investing activities | (57 | ) | (59 | ) | |
| Cash inflow (outflow) from financing activities | (97 | ) | (53 | ) | |
| Net increase (decrease) in cash and cash equivalents | (44 | ) | 8 | ||
| Statement of cash flows for the year ended 31 December 2015 | |||||
| Cash inflow (outflow) from operating activities | 98 | 76 | |||
| Cash inflow (outflow) from investing activities | (60 | ) | (29 | ) | |
| Cash inflow (outflow) from financing activities | 3 | (36 | ) | ||
| Net increase (decrease) in cash and cash equivalents | 41 | 11 | |||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Carrying value | |||||||||||||||||
| Investments in associates | 47 | 40 | 36 | ||||||||||||||
| Investments in joint ventures | 1,604 | 1,541 | 1,492 | ||||||||||||||
| 1,651 | 1,581 | 1,528 | |||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Carrying value | ||||||||
| Investments in associates | 36 | 20 | 34 | |||||
| Investments in joint ventures | 1,471 | 1,428 | 1,431 | |||||
| 1,507 | 1,448 | 1,465 | ||||||
Detailed disclosures are provided for the years in which investments in associates and joint ventures are considered to be material.
Summarised financial information of immaterial associates is as follows:
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Aggregate statement of profit or loss for associates (attributable) | |||||||||||||||||
| Revenue | 29 | 20 | 19 | ||||||||||||||
Operating (expenses) income (1) | (6) | 3 | (4) | ||||||||||||||
| Taxation | 0 | 0 | (1) | ||||||||||||||
| Profit (loss) for the year | 23 | 23 | 14 | ||||||||||||||
| Total comprehensive profit (loss) for the year, net of tax | 23 | 23 | 14 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Aggregate statement of profit or loss for associates (attributable) | ||||||||
| Revenue | 21 | 30 | 53 | |||||
| Operating costs and expenses | (11 | ) | (38 | ) | (45 | ) | ||
| Taxation | 2 | (1 | ) | 4 | ||||
| Profit (loss) for the year | 12 | (9 | ) | 12 | ||||
| Total comprehensive profit (loss) for the year, net of tax | 12 | (9 | ) | 12 | ||||
Investments in material joint ventures comprise:
| Name | Effective % | Description | Country of incorporation and operation | ||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||
Kibali Goldmines S.A.(1) | 45.0 | 45.0 | 45.0 | Exploration and mine development | The Democratic Republic of the Congo | ||||||||||||||||||||||||
| Name | Effective % | Description | Country of incorporation and operation | ||||||
| 2017 | 2016 | 2015 | |||||||
Kibali Goldmines S.A..(1) | 45 | 45 | 45 | Exploration and mine development | The Democratic Republic of the Congo | ||||
(1)AngloGold Ashanti Limited has a 50% interest in Kibali (Jersey) Limited (Kibali) which holds our effective 45% interest in Kibali Goldmines S.A.
| US Dollars | US Dollars | ||||||||||||||||||||||||
| Figures in millions | 2017 | 2016 | 2015 | Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||||||
| Carrying value of joint ventures | Carrying value of joint ventures | ||||||||||||||||||||||||
| Kibali | 1,423 | 1,400 | 1,406 | Kibali | 1,604 | 1,506 | 1,439 | ||||||||||||||||||
| Immaterial joint ventures | 48 | 28 | 25 | Immaterial joint ventures | 0 | 35 | 53 | ||||||||||||||||||
| 1,471 | 1,428 | 1,431 | 1,604 | 1,541 | 1,492 | ||||||||||||||||||||
| Reversal (impairment) of investments in joint ventures | Reversal (impairment) of investments in joint ventures | ||||||||||||||||||||||||
| Sadiola (note 8) | 2 | 11 | 12 | ||||||||||||||||||||||
Sadiola (note 8) (2) | Sadiola (note 8) (2) | 0 | 6 | 14 | |||||||||||||||||||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| The cumulative unrecognised share of losses of the joint ventures: | |||||||||||||||||
Morila (3) | 0 | 8 | 8 | ||||||||||||||
| Yatela | 1 | 2 | 3 | ||||||||||||||
(1) Following an amendment to the Gramalote joint venture shareholders agreement, the joint arrangement classification was reassessed. The updated facts and circumstances indicate that the joint venture changed to a joint operation during the year. As a result, the group recognises its share of revenue, expenses, assets and liabilities of the joint operation.
(2) Sold effective 30 December 2020.
(3) Sold effective 10 November 2020.
F - 56
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| The cumulative unrecognised share of losses of the joint ventures: | ||||||||
| Sadiola | — | — | 10 | |||||
| Morila | 7 | 9 | — | |||||
| Yatela | 2 | 3 | — | |||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Summarised financial information of joint ventures is as follows (not attributable):
| US Dollars | |||||||||||||||||
| Kibali | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Statement of profit or loss | |||||||||||||||||
| Revenue | 1,443 | 1,123 | 1,098 | ||||||||||||||
| Other operating costs and expenses | (541) | (479) | (539) | ||||||||||||||
| Amortisation of tangible and intangible assets | (241) | (282) | (330) | ||||||||||||||
| Finance costs and unwinding of obligations | (6) | (4) | (4) | ||||||||||||||
| Interest received | 7 | 4 | 3 | ||||||||||||||
| Taxation | (157) | (62) | (16) | ||||||||||||||
| Profit for the year | 505 | 300 | 212 | ||||||||||||||
| Total comprehensive income for the year, net of tax | 505 | 300 | 212 | ||||||||||||||
| Dividends received from joint venture (attributable) | 140 | 75 | 89 | ||||||||||||||
| US Dollars | |||||||||||||||||
| Kibali | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Statement of financial position | |||||||||||||||||
| Non-current assets | 2,459 | 2,522 | 2,659 | ||||||||||||||
| Current assets | 120 | 183 | 205 | ||||||||||||||
Cash and cash equivalents (1) | 944 | 453 | 124 | ||||||||||||||
| Total assets | 3,523 | 3,158 | 2,988 | ||||||||||||||
| Non-current financial liabilities | 50 | 45 | 29 | ||||||||||||||
| Other non-current liabilities | 118 | 26 | 24 | ||||||||||||||
| Current financial liabilities | 15 | 11 | 11 | ||||||||||||||
| Other current liabilities | 106 | 66 | 64 | ||||||||||||||
| Total liabilities | 289 | 148 | 128 | ||||||||||||||
| Net assets | 3,234 | 3,010 | 2,860 | ||||||||||||||
| Group’s share of net assets | 1,617 | 1,505 | 1,430 | ||||||||||||||
| Other | (13) | 1 | 9 | ||||||||||||||
| Carrying amount of interest in joint venture | 1,604 | 1,506 | 1,439 | ||||||||||||||
(1) At 31 December 2020, the Company’s attributable share of the outstanding cash balances awaiting repatriation from the DRC amounted to $424m. Barrick Gold Corporation (Barrick), the operator of the Kibali joint venture, continues to engage with the DRC Government regarding the 2018 Mining Code and the cash repatriation.
(2) Includes amounts relating to additional costs and contributions at acquisition as well as minority interests.
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Aggregate statement of profit (loss) for immaterial joint ventures (attributable) | |||||||||||||||||
| Revenue | 0 | 111 | 112 | ||||||||||||||
| Other operating costs and expenses | (2) | (94) | (92) | ||||||||||||||
| Amortisation of tangible and intangible assets | 0 | (7) | (15) | ||||||||||||||
| Profit on sale of joint ventures | 19 | 0 | 0 | ||||||||||||||
| Taxation | 0 | (7) | (2) | ||||||||||||||
| Profit (loss) for the year | 17 | 3 | 3 | ||||||||||||||
| Total comprehensive income (loss) for the year, net of tax | 17 | 3 | 3 | ||||||||||||||
F - 57
| US Dollars | ||||||||
| Kibali | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Statement of profit or loss | ||||||||
| Revenue | 755 | 709 | 747 | |||||
| Other operating costs and expenses | (530 | ) | (471 | ) | (398 | ) | ||
| Amortisation of tangible and intangible assets | (264 | ) | (211 | ) | (193 | ) | ||
| Finance costs and unwinding of obligations | (5 | ) | (5 | ) | (5 | ) | ||
| Interest received | 4 | 5 | 5 | |||||
| Taxation | 54 | 23 | (18 | ) | ||||
| Profit for the year | 14 | 50 | 138 | |||||
| Other comprehensive income for the year, net of tax | — | — | 3 | |||||
| Total comprehensive income for the year, net of tax | 14 | 50 | 141 | |||||
| Dividends received from joint venture (attributable) | — | 30 | 35 | |||||
| US Dollars | ||||||||
| Kibali | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Statement of financial position | ||||||||
| Non-current assets | 2,834 | 2,805 | 2,754 | |||||
| Current assets | 166 | 179 | 259 | |||||
| Cash and cash equivalents | 3 | 19 | 22 | |||||
| Total assets | 3,003 | 3,003 | 3,035 | |||||
| Non-current financial liabilities | 41 | 47 | 52 | |||||
| Other non-current liabilities | 23 | 32 | 57 | |||||
| Current financial liabilities | 7 | 10 | 10 | |||||
| Other current liabilities | 107 | 133 | 125 | |||||
| Total liabilities | 178 | 222 | 244 | |||||
| Net assets | 2,825 | 2,781 | 2,791 | |||||
| Group’s share of net assets | 1,413 | 1,391 | 1,396 | |||||
| Other | 10 | 9 | 10 | |||||
| Carrying amount of interest in joint venture | 1,423 | 1,400 | 1,406 | |||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Aggregate statement of profit (loss) for immaterial joint ventures (attributable) | ||||||||
| Revenue | 113 | 114 | 138 | |||||
| Other operating costs and expenses | (94 | ) | (95 | ) | (102 | ) | ||
| Amortisation of tangible and intangible assets | (16 | ) | (18 | ) | (21 | ) | ||
| Taxation | (2 | ) | (3 | ) | (7 | ) | ||
| Profit (loss) for the year | 1 | (2 | ) | 8 | ||||
| Total comprehensive income (loss) for the year, net of tax | 1 | (2 | ) | 8 | ||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
Listed investments (1) | |||||||||||||||||
| Non-current investments | |||||||||||||||||
| Equity investments at fair value through profit and loss (FVTPL) | |||||||||||||||||
| Balance at end of year | 0 | 0 | 19 | ||||||||||||||
| Equity investments at fair value though OCI (FVTOCI) | |||||||||||||||||
| Balance at beginning of year | 72 | 63 | 47 | ||||||||||||||
| Additions | 9 | 9 | 13 | ||||||||||||||
| Disposals | 0 | 0 | (7) | ||||||||||||||
| Fair value adjustments | 98 | 0 | 10 | ||||||||||||||
| Transfer from unlisted non-current investments | 7 | 0 | 0 | ||||||||||||||
| Balance at end of year | 186 | 72 | 63 | ||||||||||||||
| The non-current equity investments consist of ordinary shares and collective investment schemes and primarily comprise: | |||||||||||||||||
| Corvus Gold Corporation | 59 | 41 | 43 | ||||||||||||||
| Various listed investments held by Environmental Rehabilitation Trust Fund | 0 | 0 | 16 | ||||||||||||||
| Pure Gold Mining | 126 | 31 | 18 | ||||||||||||||
| Other | 1 | 0 | 5 | ||||||||||||||
| 186 | 72 | 82 | |||||||||||||||
F - 58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
20 OTHER INVESTMENTS (continued)
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current investments | ||||||||
Listed investments (1) | ||||||||
| Available-for-sale | ||||||||
| Balance at beginning of year | 46 | 29 | 47 | |||||
| Additions | 9 | 8 | 8 | |||||
| Disposals | (1 | ) | (1 | ) | (3 | ) | ||
| Fair value adjustments | 19 | 7 | (7 | ) | ||||
| Impairments | (3 | ) | — | (9 | ) | |||
| Translation | 3 | 3 | (7 | ) | ||||
| Balance at end of year | 73 | 46 | 29 | |||||
| The available-for-sale non-current investments consist of ordinary shares and collective investment schemes and primarily comprise: | ||||||||
| International Tower Hill Mines Limited (ITH) | 7 | 9 | 2 | |||||
| Corvus Gold Corporation | 25 | 7 | 4 | |||||
| Various listed investments held by Environmental Rehabilitation Trust Fund | 22 | 18 | 17 | |||||
| Pure Gold Mining | 11 | 8 | 1 | |||||
| Orinoco Gold Limited | 4 | — | — | |||||
| Other | 4 | 4 | 5 | |||||
| 73 | 46 | 29 | ||||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Listed investments (continued) | |||||||||||||||||
| Non-current investments (continued) | |||||||||||||||||
| Investments at amortised cost - Non-current | |||||||||||||||||
| Balance at end of year | 0 | 0 | 12 | ||||||||||||||
| Current investments | |||||||||||||||||
Listed investments - FVTOCI (1) (2) | 0 | 10 | 6 | ||||||||||||||
| Book value of listed investments | 186 | 82 | 100 | ||||||||||||||
| Unlisted investments | |||||||||||||||||
| Non-current investments | |||||||||||||||||
| Balance at beginning of year | 4 | 47 | 54 | ||||||||||||||
| Additions | 0 | 45 | 48 | ||||||||||||||
| Maturities | 0 | (44) | (45) | ||||||||||||||
| Transfer to non-current assets and liabilities held for sale | 0 | (48) | 0 | ||||||||||||||
| Transfer to listed non-current investments | (7) | 0 | 0 | ||||||||||||||
| Fair value adjustment - FVTOCI | 0 | 2 | 0 | ||||||||||||||
| Fair value adjustments - FVTPL | 5 | 0 | 0 | ||||||||||||||
| Other | 0 | 0 | (2) | ||||||||||||||
| Translation | 0 | 2 | (8) | ||||||||||||||
| Balance at end of year | 2 | 4 | 47 | ||||||||||||||
| The unlisted investments include: | |||||||||||||||||
| Book value of unlisted investments | 2 | 4 | 47 | ||||||||||||||
| Non-current other investments | 188 | 76 | 141 | ||||||||||||||
| Total book value of other investments | 188 | 86 | 147 | ||||||||||||||
(1)The group’s listed available-for-sale equity investments are susceptible to market price risk arising from uncertainties about the future values of the investments.
At the reporting date, the majority ofFVTOCI equity investments were listed on the Toronto Stock Exchange and the JSE.Exchange.
(2)The investment in Sandstorm was disposed in 2020.
F - 59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
21 INVENTORIES
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Non-current | |||||||||||||||||
| Raw materials - ore stockpiles | 69 | 93 | 106 | ||||||||||||||
| Current | |||||||||||||||||
| Raw materials | |||||||||||||||||
| - ore stockpiles | 262 | 229 | 251 | ||||||||||||||
| - heap-leach inventory | 5 | 4 | 3 | ||||||||||||||
| Work in progress | |||||||||||||||||
| - metals in process | 46 | 51 | 44 | ||||||||||||||
| Finished goods | |||||||||||||||||
| - gold doré/bullion | 42 | 42 | 57 | ||||||||||||||
| - by-products | 0 | 1 | 0 | ||||||||||||||
| Total metal inventories | 355 | 327 | 355 | ||||||||||||||
| Mine operating supplies | 378 | 305 | 297 | ||||||||||||||
| 733 | 632 | 652 | |||||||||||||||
Total inventories(1) | 802 | 725 | 758 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current investments (continued) | ||||||||
| Listed investments (continued) | ||||||||
| Held-to-maturity | 4 | 6 | 5 | |||||
| The held-to-maturity investment consists of government bonds held by the Environmental Rehabilitation Trust Fund administered by Ashburton Investments. | ||||||||
| The fair value of bonds held-to-maturity is $6m (2016: $8m; 2015: $6m) and has a sensitivity of less than $1m (2016: less than $1m; 2015: less than $1m) for a 1% change in interest rates. | ||||||||
| Current investments | ||||||||
| Listed investments - available for sale | 7 | 5 | 1 | |||||
| Book value of listed investments | 84 | 57 | 35 | |||||
| Non-current assets | ||||||||
| Unlisted investments | ||||||||
| Balance at beginning of year | 73 | 57 | 72 | |||||
| Additions | 81 | 66 | 77 | |||||
| Maturities | (73 | ) | (58 | ) | (74 | ) | ||
| Transfer to non-current assets and liabilities held for sale | (32 | ) | — | — | ||||
| Accrued interest | — | 1 | — | |||||
| Translation | 5 | 7 | (18 | ) | ||||
| Balance at end of year | 54 | 73 | 57 | |||||
| The unlisted investments include: | ||||||||
| Negotiable Certificates of Deposit - Environmental Rehabilitation Trust Fund administered by Ashburton Investments | 53 | 69 | 55 | |||||
| Other | 1 | 4 | 2 | |||||
| 54 | 73 | 57 | ||||||
| Book value of unlisted investments | 54 | 73 | 57 | |||||
| Total book value of other investments (note 34) | 138 | 130 | 92 | |||||
(1)The group’s listed available-for-sale equity investments are susceptible to market price risk arising from uncertainties about the future valuesamount of the investments.write-down of ore stockpiles and mine operating supplies to net realisable value, and recognised as an expense in cost of sales is $7m (2019: $4m; 2018: $19m).
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current | ||||||||
| Raw materials - ore stockpiles | 100 | 84 | 90 | |||||
| Current | ||||||||
| Raw materials | ||||||||
| - ore stockpiles | 261 | 233 | 232 | |||||
| - heap-leach inventory | 5 | 3 | 6 | |||||
| Work in progress | ||||||||
| - metals in process | 58 | 77 | 65 | |||||
| Finished goods | ||||||||
| - gold doré/bullion | 59 | 60 | 28 | |||||
| - by-products | 5 | 4 | 5 | |||||
| Total metal inventories | 388 | 377 | 336 | |||||
| Mine operating supplies | 295 | 295 | 310 | |||||
| 683 | 672 | 646 | ||||||
Total inventories(1) | 783 | 756 | 736 | |||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Non-current | |||||||||||||||||
| Deferred compensation asset | 28 | 0 | 0 | ||||||||||||||
| Prepayments | 12 | 15 | 18 | ||||||||||||||
| Recoverable tax, rebates, levies and duties | 195 | 107 | 84 | ||||||||||||||
| 235 | 122 | 102 | |||||||||||||||
| Current | |||||||||||||||||
| Trade and loan receivables | 56 | 47 | 33 | ||||||||||||||
| Prepayments | 56 | 61 | 42 | ||||||||||||||
Recoverable tax, rebates, levies and duties (1) | 100 | 130 | 116 | ||||||||||||||
| Other receivables | 17 | 12 | 18 | ||||||||||||||
| 229 | 250 | 209 | |||||||||||||||
| Total trade, other receivables and other assets | 464 | 372 | 311 | ||||||||||||||
| There is a concentration of risk in respect of amounts due from Revenue Authorities for recoverable tax, rebates, levies and duties from subsidiaries in the Africa Region segment. These values are summarised as follows: | |||||||||||||||||
| Recoverable value added tax | 215 | 167 | 126 | ||||||||||||||
Recoverable fuel duties(2) | 0 | 43 | 41 | ||||||||||||||
| Appeal deposits | 34 | 10 | 10 | ||||||||||||||
(1) Includes taxation asset, refer note 31.
(2) Fuel duty claims were written off during 2020.
F - 60
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current | ||||||||
| Prepayments | 17 | 9 | 9 | |||||
| Recoverable tax, rebates, levies and duties | 50 | 25 | 4 | |||||
| 67 | 34 | 13 | ||||||
| Current | ||||||||
| Trade and loan receivables | 27 | 35 | 34 | |||||
| Prepayments | 62 | 85 | 37 | |||||
| Recoverable tax, rebates, levies and duties | 127 | 124 | 117 | |||||
| Other receivables | 6 | 11 | 8 | |||||
| 222 | 255 | 196 | ||||||
| Total trade, other receivables and other assets | 289 | 289 | 209 | |||||
| Current trade and loan receivables are generally on terms less than 90 days. | ||||||||
| At 31 December 2017 trade receivables of $2m have been pledged as security. | ||||||||
| There is a concentration of risk in respect of amounts due from Revenue Authorities for recoverable tax, rebates, levies and duties from subsidiaries in the Continental Africa segment. These values are summarised as follows: | ||||||||
| Recoverable value added tax | 106 | 61 | 66 | |||||
| Recoverable fuel duties | 38 | 39 | 28 | |||||
| Appeal deposits | 10 | 8 | 1 | |||||
22 TRADE, OTHER RECEIVABLES AND OTHER ASSETS (continued)
Geita Gold Mine (GGM) in Tanzania net indirect tax receivables balance increased by $20m to $139m (2019: $119m; 2018: $84m).
No refunds were received in cash or offset against provisional corporate tax payments were made in the current year. Claims relating to periods pre-July 2017 totalling $9m were offset against provisional corporate tax payments in 2019. Amounts set off against VAT claims have been certified by an external advisor and verified by the Tanzania Revenue Authority (“TRA”). The TRA acknowledged the majority of the offsets during December 2019. The remaining disputed balance was objected to as GGM believe that the claims have been correctly lodged pursuant to Tanzanian law.
An amendment, effective 20 July 2017, to Tanzania's mining legislation included an amendment to the Value Added Tax Act, 2014 (No. 5) (2015 VAT Act) to the effect that no input tax credit can be claimed for the exportation of “raw minerals”. The Written Laws (Miscellaneous Amendments) (No. 2) Act, 2019, issued during 2019, provides a definition for "raw minerals". However, GGM has received notices from the TRA that they are not eligible for VAT relief from July 2017 onwards on the basis that all production constitutes “raw minerals” for this purpose.
The basis for dispute of the disqualifications is on the interpretation of the legislation. Management's view is the definition of "raw minerals" provided in the Written Laws (Miscellaneous Amendments) (No. 2) Act. 2019 excludes gold doré. Gold bearing ore is mined from the open pit and underground mining operations, where it is further crushed and milled to maximise the gold recovery process, producing gold doré exceeding 80% purity as well as beneficiated products (concentrate). On this basis the mined doré and concentrate do not constitute “raw minerals” and accordingly the VAT claims are valid. Management have obtained a legal opinion that supports management's view that doré does not constitute a “raw mineral”.
The Finance Act 2020 became effective on 1 July 2020. The Finance Act amended the VAT Act by deleting the disqualification of VAT refunds due to the exportation of “raw minerals”. The deletion is intended to ensure the recovery of VAT refunds from July 2020, although the amendment cannot be applied retrospectively, it confirms that VAT refunds from July 2017 onwards are due to GGM. On 30 January 2021, management received a proposal from the TRA to settle VAT objections filed between 2017 and 2020, confirming the TRA's position to disqualify all VAT refunds requested by GGM for the period from July 2017 to June 2020. Management is not in agreement with the proposal and will pursue legal remedies provided to taxpayers by Tanzanian law.
The total VAT claims submitted from July 2017 to June 2020 amount to $164m (of the total, $25m of claims were submitted in 2020). All disqualifications received from the TRA have been objected to by GGM in accordance with the provisions and time frames set out in the Tax Administration Act, 2015 (No.10). Claims of $27m were submitted between July 2020 and December 2020, taking the total claims to $191m. The net indirect tax receivable at 31 December 2020 of $139m, reflects the discounting effects applied to the timing of when GGM expects to offset its indirect tax claims against future income taxes of GGM.
CVSA
On 4 September 2018, a decree was published by the Argentinian Government, which reintroduced export duties for products exported from Argentina. The export duty rate was 12% on the freight on board (FOB) value of goods exported, including gold, paid in country. The duty was limited so as not to exceed ARS $4 for each US dollar exported. On 14 December 2019, the Government of Argentina announced that the cap of ARS $4 for each US dollar exported, would be replaced by a flat rate of 12% for 2020. On 2 October 2020, the Government of Argentina extended the export duties until 31 December 2021, at a rate of 8% for gold bullion. In terms of the Stability Agreement between CVSA and the Government of Argentina, CVSA has a right of refund or offset of these amounts paid as established by its Stability Agreement, which provides for a 30% taxation cap on annual taxes and duties paid by CVSA. As a result of the taxation cap, export duty receivables amount to $23m (2019: $25m).
23 CASH RESTRICTED FOR USE
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Non-current | 31 | 31 | 35 | ||||||||||||||
| Current | |||||||||||||||||
| Cash restricted by prudential solvency requirements and other | 24 | 27 | 24 | ||||||||||||||
| Cash balances held by the Tropicana - joint operation | 18 | 6 | 7 | ||||||||||||||
| 42 | 33 | 31 | |||||||||||||||
| Total cash restricted for use (note 35 and 36) | 73 | 64 | 66 | ||||||||||||||
F - 61
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current | ||||||||
| Cash balances held by Environmental Rehabilitation Trust Funds and other | 37 | 36 | 37 | |||||
| Current | ||||||||
| Cash restricted by prudential solvency requirements and other | 18 | 16 | 19 | |||||
| Cash balances held by the Tropicana joint venture | 10 | 3 | 4 | |||||
| 28 | 19 | 23 | ||||||
| Total cash restricted for use (note 34) | 65 | 55 | 60 | |||||
24 CASH AND CASH EQUIVALENTS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Cash and deposits on call | 1,081 | 417 | 312 | ||||||||||||||
| Money market instruments | 249 | 39 | 17 | ||||||||||||||
| Total cash and cash equivalents (notes 35 and note 36) | 1,330 | 456 | 329 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Cash and deposits on call | 170 | 167 | 344 | |||||
| Money market instruments | 35 | 48 | 140 | |||||
| Total cash and cash equivalents (note 34 and note 35) | 205 | 215 | 484 | |||||
| Kopanang gold mine, West Gold Plant and related infrastructure (Kopanang Sale Assets) | ||||||||
| The Kopanang gold mine is situated approximately 170 kilometres southwest of Johannesburg. It is included in the South Africa reporting segment. Kopanang gold mine was previously recognised as a combination of tangible assets, current assets, current and long term liabilities. On 19 October 2017, AngloGold Ashanti Limited announced that it has entered into an agreement to dispose of the Kopanang Sale Assets to Heaven‐Sent SA Sunshine Investment Company Limited (HSC), a Chinese capital management company headquartered in Hong Kong. The purchase consideration will be settled on the Closing Date by a payment of R100 million in cash and the transfer of certain gold bearing rock dumps from a subsidiary of HSC, namely Village Main Reef Limited to AngloGold Ashanti. Kopanang mine is a single shaft system, which produces gold as its primary output. In 2017, Kopanang mine produced 91,000 ounces of gold (2016: 91,000 ounces). | ||||||||
| Moab Khotsong gold mine and related infrastructure, Nufcor and Margaret Water Company (Moab Sale Assets) | ||||||||
| The Moab Khotsong gold mine is situated about 180 kilometres southwest of Johannesburg. It is included in the South Africa reporting segment. Moab Khotsong gold mine was previously recognised as a combination of tangible assets, current assets, current and long term liabilities. On 19 October 2017, AngloGold Ashanti Limited announced that it has entered into a sale and purchase agreement, to dispose of various assets (Moab Sale Assets) situated in the Vaal River area of South Africa to Harmony Gold Mining Company Limited for a cash consideration of US$300 million. | ||||||||
| The assets and related interests to be sold include the following: | ||||||||
| · The Moab Khotsong mine (which incorporates the Great Noligwa mine) and related infrastructure; | ||||||||
| · AngloGold Ashanti’s entire interest in Nuclear Fuels Corporation of South Africa Proprietary Limited; and | ||||||||
| · AngloGold Ashanti’s entire interest in Margaret Water Company NPC. | ||||||||
| Moab Khotsong is an underground mine which produced 294,000 ounces in 2017 (2016: 280,000 ounces). | ||||||||
| Subsequent to year end the conditions precedent were fulfilled. Refer note 36. | ||||||||
| The carrying amount of major classes of assets and liabilities includes: | ||||||||
| US Dollars | ||||||||
| 2017 | ||||||||
| Figures in millions | Moab Sale Assets | Kopanang Sale Assets | Total | |||||
Tangible assets(1) | 277 | 12 | 289 | |||||
| Intangible assets | 2 | — | 2 | |||||
| Inventories | 16 | 5 | 21 | |||||
| Other investments | 31 | 5 | 36 | |||||
| Non-current assets held for sale (note 2) | 326 | 22 | 348 | |||||
| Environmental and rehabilitation provisions | 20 | 9 | 29 | |||||
| Provision for pension and post-retirement benefits | 1 | — | 1 | |||||
| Trade, other payables and deferred income | 10 | 5 | 15 | |||||
| Deferred taxation | 81 | — | 81 | |||||
| Non-current liabilities held for sale | 112 | 14 | 126 | |||||
| Net non-current assets held for sale | 214 | 8 | 222 | |||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Share capital | |||||||||||||||||
| Authorised | |||||||||||||||||
| 600,000,000 ordinary shares of 25 SA cents each | 23 | 23 | 23 | ||||||||||||||
| 2,000,000 A redeemable preference shares of 50 SA cents each | 0 | 0 | 0 | ||||||||||||||
| 5,000,000 B redeemable preference shares of 1 SA cent each | 0 | 0 | 0 | ||||||||||||||
| 30,000,000 C redeemable preference shares of 0 par value | 0 | 0 | 0 | ||||||||||||||
| 23 | 23 | 23 | |||||||||||||||
| Issued and fully paid | |||||||||||||||||
| 416,890,087 (2019: 415,301,215; 2018: 412,769,980) ordinary shares of 25 SA cents each | 17 | 17 | 16 | ||||||||||||||
| 2,000,000 A redeemable preference shares of 50 SA cents each | 0 | 0 | 0 | ||||||||||||||
| 778,896 B redeemable preference shares of 1 SA cent each | 0 | 0 | 0 | ||||||||||||||
| 17 | 17 | 16 | |||||||||||||||
| Treasury shares held within the group: | |||||||||||||||||
| 2,778,896 A and B redeemable preference shares | 0 | 0 | 0 | ||||||||||||||
| 17 | 17 | 16 | |||||||||||||||
| Share premium | |||||||||||||||||
| Balance at beginning of year | 7,235 | 7,208 | 7,171 | ||||||||||||||
| Ordinary shares issued - share premium | 15 | 27 | 37 | ||||||||||||||
| 7,250 | 7,235 | 7,208 | |||||||||||||||
| Less: held within the group | |||||||||||||||||
| Redeemable preference shares | (53) | (53) | (53) | ||||||||||||||
| Balance at end of year | 7,197 | 7,182 | 7,155 | ||||||||||||||
| Share capital and premium | 7,214 | 7,199 | 7,171 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Share capital | ||||||||
| Authorised | ||||||||
| 600,000,000 ordinary shares of 25 SA cents each | 23 | 23 | 23 | |||||
| 2,000,000 A redeemable preference shares of 50 SA cents each | — | — | — | |||||
| 5,000,000 B redeemable preference shares of 1 SA cent each | — | — | — | |||||
| 30,000,000 C redeemable preference shares of no par value | — | — | — | |||||
| 23 | 23 | 23 | ||||||
| Issued and fully paid | ||||||||
| 410,054,615 (2016: 408,223,760; 2015: 405,265,315) ordinary shares of 25 SA cents each | 16 | 16 | 16 | |||||
| 2,000,000 A redeemable preference shares of 50 SA cents each | — | — | — | |||||
| 778,896 B redeemable preference shares of 1 SA cent each | — | — | — | |||||
| 16 | 16 | 16 | ||||||
| Treasury shares held within the group: | ||||||||
| 2,778,896 A and B redeemable preference shares | — | — | — | |||||
| 16 | 16 | 16 | ||||||
| Share premium | ||||||||
| Balance at beginning of year | 7,145 | 7,103 | 7,078 | |||||
| Ordinary shares issued | 26 | 42 | 25 | |||||
| 7,171 | 7,145 | 7,103 | ||||||
| Less: held within the group | ||||||||
| Redeemable preference shares | (53 | ) | (53 | ) | (53 | ) | ||
| Balance at end of year | 7,118 | 7,092 | 7,050 | |||||
| Share capital and premium | 7,134 | 7,108 | 7,066 | |||||
The rights and restrictions applicable to the A, B and BC redeemable preference shares were unchanged during 2017.2020. The Ccancellation of all redeemable preference shares have no par value but have the same rights as the B preference shares except that the C preference shares rank after the B preference shares (but prior to the A preference shares) as regards the paymentis in process.
F - 62
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current | ||||||||
| Unsecured | ||||||||
| Debt carried at fair value | ||||||||
| $1.25bn bonds - issued July 2013 | — | — | 498 | |||||
| On 1 August 2016, the remaining portion of the bonds were settled. | ||||||||
| Debt carried at amortised cost | ||||||||
| Rated bonds - issued July 2012 | 759 | 758 | 756 | |||||
| Semi-annual coupons are paid at 5.125% per annum. The bonds were issued on 30 July 2012, are repayable on 1 August 2022 and are US dollar-based. | ||||||||
| Rated bonds - issued April 2010 | 1,001 | 1,000 | 999 | |||||
| Semi-annual coupons are paid at 5.375% per annum on $700m 10-year bonds and at 6.5% per annum on $300m 30-year bonds. The $700m bonds are repayable in April 2020 and the $300m bonds are repayable in April 2040. The bonds are US dollar-based. | ||||||||
| Syndicated revolving credit facility ($1bn) | 32 | 45 | 194 | |||||
| Semi-annual interest paid at LIBOR plus 1.5% per annum. The applicable margin is subject to a ratings grid. The facility was issued on 17 July 2014 and is available until 17 July 2019. The facility is US dollar-based. | ||||||||
| Syndicated revolving credit facility (A$500m) | 163 | 168 | 96 | |||||
| Interest charged at BBSY plus 2% per annum. The applicable margin is subject to a ratings grid. The loan is repayable in July 2019 and is Australian dollar-based. | ||||||||
| Syndicated loan facility (R1.5bn) | — | 88 | 65 | |||||
| The facility was issued on 3 December 2013 and was settled on 12 December 2017. | ||||||||
| Syndicated revolving credit facility (R2.5bn) | 56 | — | — | |||||
| Quarterly interest paid at JIBAR plus 1.8% per annum. The facility was issued on 12 December 2017 and is available until 12 December 2020, with the option on application to extend by two years. The loan is SA rand-based. | ||||||||
| Syndicated loan facility (R1.4bn) | 81 | — | — | |||||
| Quarterly interest paid at JIBAR plus 1.65% per annum. The facility was issued on 7 July 2015 and is available until 7 July 2020. The loan is SA rand-based. | ||||||||
| Syndicated loan facility (R1bn) | 81 | — | — | |||||
| Quarterly interest paid at JIBAR plus 1.3% per annum. The facility was issued on 3 November 2017 and is available until 3 November 2020, with the option on application to extend by two years. The loan is SA rand-based. | ||||||||
| Revolving Credit Facilities - $100m | 16 | 41 | — | |||||
| Various loans with interest rates ranging from 6.2% to 8% above LIBOR. The facilities were issued on 23 August 2016 and are available until 23 August 2019 and are US dollar-based. | ||||||||
| Other | 1 | 1 | 1 | |||||
| Interest charged at various rates from 2.5% plus delta exchange rate on individual instalments per annum to 4.5% per annum. Repayments terminate in June 2023. All loans are Brazilian real-based. | ||||||||
| The loans are subject to debt covenant arrangements for which no default event occurred. | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
26 BORROWINGS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Non-current | |||||||||||||||||
| Unsecured | |||||||||||||||||
| Debt carried at amortised cost | |||||||||||||||||
| Rated bonds - issued July 2012 | 764 | 762 | 761 | ||||||||||||||
| Semi-annual coupons are paid at 5.125% per annum. The bonds were issued on 30 July 2012, are repayable on 1 August 2022 and are US dollar-based. | |||||||||||||||||
| Rated bonds - issued April 2010 | 295 | 1,003 | 1,002 | ||||||||||||||
| Semi-annual coupons are paid at 5.375% per annum on $700m 10-year bonds and at 6.5% per annum on $300m 30-year bonds. The $700m were repaid on 15 April 2020 and the $300m bonds are repayable in April 2040. The bonds are US dollar-based. | |||||||||||||||||
| Rated bonds - issued October 2020 | 692 | 0 | 0 | ||||||||||||||
| Semi-annual coupons are paid at 3.75% per annum. The bonds were issued on 1 October 2020, are repayable on 1 October 2030 and are US dollar-based. | |||||||||||||||||
| Multi-currency syndicated revolving credit facility ($1.4bn multi-currency RCF) | 0 | 15 | 0 | ||||||||||||||
| The Facility consists of a US dollar based facility with interest charged at a margin of 1.45% above LIBOR and an Australian dollar based facility capped at $500m with a margin of 1.45% above BBSY. The applicable margin is subject to a ratings grid. The facility was issued on 23 October 2018 and is available until 23 October 2023. | |||||||||||||||||
| Syndicated loan facility (R1.4bn) | 0 | 0 | 28 | ||||||||||||||
| Quarterly interest paid at JIBAR plus 1.65% per annum. The facility was issued on 7 July 2015 and was cancelled on 19 February 2020.The loan is SA rand-based. | |||||||||||||||||
| Syndicated loan facility (R1bn) | 0 | 72 | 35 | ||||||||||||||
| Quarterly interest paid at JIBAR plus 1.3% per annum. The facility was issued on 3 November 2017. During 2020 the facility was fully repaid and voluntarily cancelled on 11 November 2020. The loan was SA rand-based. | |||||||||||||||||
| Siguiri revolving credit facilities ($65m) | 67 | 67 | 0 | ||||||||||||||
| Interest paid at 8.5% above LIBOR. The facility was issued on 23 August 2016, and is available until 3 May 2022 and is US dollar-based. | |||||||||||||||||
| Geita revolving credit facility ($150m) | 113 | 114 | 60 | ||||||||||||||
| Multi-currency RCF consisting of Tanzanian shilling component which is capped at the equivalent of US$45m. This component bears interest at 12.5%. The remaining USD component of the facility bears interest at LIBOR plus 6.7% The facility matures on 22 June 2021. | |||||||||||||||||
| Revolving credit facilities ($100m) | 0 | 0 | 103 | ||||||||||||||
| During 2019 the loans were refinanced and included in the Geita and Siguiri revolving credit facilities. | |||||||||||||||||
| Secured | |||||||||||||||||
Finance leases (1) | 0 | 0 | 57 | ||||||||||||||
F - 63
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current (continued) | ||||||||
| Secured | ||||||||
| Finance leases | ||||||||
| Turbine Square Two (Pty) Limited | 15 | 15 | 15 | |||||
| The leases are capitalised at an implied interest rate of 9.8% per annum. Lease payments are due in monthly instalments terminating in March 2022 and are SA rand-based. The buildings financed are used as security for these loans (note 35). | ||||||||
| Australian Gas Pipeline | 58 | 57 | 62 | |||||
| The contract with the supplier of gas contains embedded leases which have been determined to bear interest at an average of 6.75% per annum. The embedded leases commenced in November and December 2015 and are for a 10 and 12 year duration, respectively. The leases are repayable in monthly instalments and are Australian dollar-based. The equipment related to the embedded leases is used as security for these loans. | ||||||||
| Other | 5 | 5 | 2 | |||||
| Various loans with interest rates ranging from 2.5% to 15.5% per annum. These loans are repayable from 2016 to 2041. Some of these loans are secured by the financed assets. | ||||||||
| Total non-current borrowings including current portion | 2,268 | 2,178 | 2,688 | |||||
| Current portion of non-current borrowings included in current liabilities | (38 | ) | (34 | ) | (51 | ) | ||
| Total non-current borrowings | 2,230 | 2,144 | 2,637 | |||||
| Current | ||||||||
| Current portion of non-current borrowings included above | 38 | 34 | 51 | |||||
| Unsecured | ||||||||
| R750m Bonds - issued December 2013 | — | — | 49 | |||||
| Total current borrowings | 38 | 34 | 100 | |||||
| Total borrowings (notes 34 and 35) | 2,268 | 2,178 | 2,737 | |||||
| Amounts falling due | ||||||||
| Within one year | 38 | 34 | 100 | |||||
| Between one and two years | 219 | 170 | 64 | |||||
| Between two and five years | 1,687 | 902 | 1,495 | |||||
| After five years | 324 | 1,072 | 1,078 | |||||
| (notes 34 and 35) | 2,268 | 2,178 | 2,737 | |||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Other | 0 | 0 | 4 | ||||||||||||||
| Total borrowings (note 35) | 1,931 | 2,033 | 2,050 | ||||||||||||||
| Current portion of borrowings (note 36) | (142) | (734) | (139) | ||||||||||||||
| Total non-current borrowings (note 36) | 1,789 | 1,299 | 1,911 | ||||||||||||||
| Amounts falling due | |||||||||||||||||
| Within one year | 142 | 734 | 139 | ||||||||||||||
| Between one and two years | 812 | 110 | 734 | ||||||||||||||
| Between two and five years | 0 | 898 | 860 | ||||||||||||||
| After five years | 977 | 291 | 317 | ||||||||||||||
| (note 35) | 1,931 | 2,033 | 2,050 | ||||||||||||||
(1) The Finance leases have been included in the lease liabilities from 1 January 2019 (refer to note 16).
IBOR linked borrowings
The Interest Rate Benchmark Reform - Phase 2 Amendments will have an effect on the group financial statements. The group has revolving credit facilities which reference to LIBOR, some of which extend beyond 2021. These facilities have yet to transfer to an alternative benchmark interest rate. The table below provides the details of these contracts:
| Figures in millions | Carrying value at 31 December 2020 | Repayable within one year | Repayable within one to two years | ||||||||
| Siguiri revolving credit facility ($65m) | 67 | 2 | 65 | ||||||||
Geita revolving credit facility ($105m) (1) | 67 | 67 | 0 | ||||||||
Multi-currency syndicated revolving credit facility ($1.4bn multi-currency RCF) (2) | 0 | 0 | 0 | ||||||||
(1) The Geita RCF consists of a Tanzanian shilling component which is capped at the equivalent of US$45m and this component bears interest at 12.5%. The remaining component bears interest at LIBOR plus 6.7%.
(2) The $1.4bn multi-currency is undrawn at 31 December 2020 and is available until 23 October 2023.
F - 64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
26 BORROWINGS (continued)
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Currency | ||||||||
| The currencies in which the borrowings are denominated are as follows: | ||||||||
| US dollar | 1,807 | 1,844 | 2,447 | |||||
| Australian dollar | 221 | 225 | 158 | |||||
| SA rand | 237 | 106 | 130 | |||||
| Brazilian real | 3 | 3 | 2 | |||||
| (notes 34 and 35) | 2,268 | 2,178 | 2,737 | |||||
| Undrawn facilities | ||||||||
| Undrawn borrowing facilities as at 31 December are as follows: | ||||||||
| Syndicated revolving credit facility ($1bn) - US dollar | 965 | 950 | 800 | |||||
| Syndicated revolving credit facility (A$500m) - Australian dollar | 226 | 191 | 266 | |||||
| Syndicated revolving credit facility (R1.5bn) - SA rand | — | 21 | 33 | |||||
| Syndicated revolving credit facility (R2.5bn) - SA rand | 146 | — | — | |||||
| Syndicated revolving credit facility (R1.4bn) - SA rand | 32 | 102 | 91 | |||||
| FirstRand Bank Limited (R750m) - SA rand | 61 | 37 | 32 | |||||
| Revolving credit facilities ($100m) - US dollar | 85 | 60 | — | |||||
| 1,515 | 1,361 | 1,222 | ||||||
| Changes in liabilities arising from financing activities: | ||||||||
| Reconciliation of total borrowings: | ||||||||
| A reconciliation of total borrowings included in the statement of financial position is set out in the following table: | ||||||||
| Opening balance | 2,178 | 2,737 | 3,721 | |||||
| Acquisitions and disposals - other | — | — | 47 | |||||
| Proceeds from borrowings | 815 | 787 | 421 | |||||
| Repayment of borrowings | (767 | ) | (1,333 | ) | (1,288 | ) | ||
| Finance costs paid on borrowings | (125 | ) | (159 | ) | (239 | ) | ||
| Interest charged to the income statement | 130 | 145 | 213 | |||||
| Fair value adjustments on issued bonds | — | (9 | ) | (66 | ) | |||
| Translation | 37 | 10 | (72 | ) | ||||
| Closing balance | 2,268 | 2,178 | 2,737 | |||||
| Reconciliation of finance costs paid: | ||||||||
| A reconciliation of finance costs paid included in the statement of cash flows is set out in the following table: | ||||||||
| Finance costs paid on borrowings | 125 | 159 | 239 | |||||
| Commitment fees, environmental guarantee fees and other borrowing costs | 13 | 13 | 12 | |||||
| Total finance costs paid | 138 | 172 | 251 | |||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Currency | |||||||||||||||||
| The currencies in which the borrowings are denominated are as follows: | |||||||||||||||||
| US dollar | 1,884 | 1,893 | 1,896 | ||||||||||||||
| Australian dollar | 0 | 21 | 48 | ||||||||||||||
| SA rand | 0 | 72 | 75 | ||||||||||||||
| Tanzanian shillings | 47 | 47 | 29 | ||||||||||||||
| Brazilian real | 0 | 0 | 2 | ||||||||||||||
| (notes 35) | 1,931 | 2,033 | 2,050 | ||||||||||||||
| Undrawn facilities | |||||||||||||||||
| Undrawn borrowing facilities as at 31 December are as follows: | |||||||||||||||||
Syndicated revolving credit facility (R2.5bn) - SA rand (1) | 179 | 174 | |||||||||||||||
Syndicated revolving credit facility (R1.4bn) - SA rand (2) | 100 | 70 | |||||||||||||||
| FirstRand Bank Limited (R500m; 2019 & 2018: R750m) - SA rand | 34 | 54 | 52 | ||||||||||||||
Revolving credit facility (R1bn) - SA rand(3) | 0 | 35 | |||||||||||||||
| Multi currency syndicated revolving credit facility ($1.4bn) - US Dollar | 1,400 | 1,379 | 1,400 | ||||||||||||||
| Revolving credit facility - $150m | 41 | 40 | 57 | ||||||||||||||
| 1,475 | 1,752 | 1,788 | |||||||||||||||
| Change in liabilities arising from financing activities: | |||||||||||||||||
Reconciliation of borrowings (excluding lease liabilities) (4): | |||||||||||||||||
| A reconciliation of the total borrowings included in the statement of financial position is set out in the following table: | |||||||||||||||||
| Opening balance | 2,033 | 2,050 | 2,268 | ||||||||||||||
| Proceeds from borrowings | 2,226 | 168 | 753 | ||||||||||||||
| Repayment of borrowings | (2,310) | (123) | (967) | ||||||||||||||
| Finance costs paid on borrowings | (114) | (122) | (117) | ||||||||||||||
| Deferred loan fees | 4 | (7) | 0 | ||||||||||||||
| Other borrowing fees | (15) | ||||||||||||||||
| Interest charged to the income statement | 115 | 127 | 127 | ||||||||||||||
| Reclassification of finance leases to lease liabilities | 0 | (60) | 0 | ||||||||||||||
| Translation | (8) | 0 | (14) | ||||||||||||||
| Closing balance | 1,931 | 2,033 | 2,050 | ||||||||||||||
| Reconciliation of finance costs paid: | |||||||||||||||||
| A reconciliation of the finance cost paid included in the statement of cash flows is set out in the following table: | |||||||||||||||||
| Finance costs paid on borrowings | 114 | 122 | 117 | ||||||||||||||
| Capitalised finance cost | (17) | (6) | 0 | ||||||||||||||
| Commitment fees, utilisation fees and other borrowing costs | 13 | 12 | 13 | ||||||||||||||
| Total finance costs paid | 110 | 128 | 130 | ||||||||||||||
(1) R2.5bn Syndicated loan facility issued December 2017 was cancelled on 23 October 2020.
(2) R1.4bn Syndicated loan facility issued July 2015 was cancelled on 19 February 2020.
(3) R1bn Syndicated loan facility issued November 2017 was cancelled on 11 November 2020.
(4) Refer note 16 for changes in lease liabilities arising from financing activities.
F - 65
27 ENVIRONMENTAL REHABILITATION AND OTHER PROVISIONS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Environmental rehabilitation obligations | |||||||||||||||||
| Provision for decommissioning | |||||||||||||||||
| Balance at beginning of year | 196 | 237 | 286 | ||||||||||||||
| Charge to income statement | 0 | 0 | 1 | ||||||||||||||
Change in estimates(1) | 17 | 29 | (47) | ||||||||||||||
| Unwinding of decommissioning obligation | 2 | 10 | 12 | ||||||||||||||
| Transfer to assets and liabilities held for sale | 0 | (81) | 0 | ||||||||||||||
| Utilised during the year | 0 | (1) | (1) | ||||||||||||||
| Translation | 4 | 2 | (14) | ||||||||||||||
| Balance at end of year | 219 | 196 | 237 | ||||||||||||||
| Provision for restoration | |||||||||||||||||
| Balance at beginning of year | 423 | 385 | 409 | ||||||||||||||
| Charge to income statement | 2 | (1) | 2 | ||||||||||||||
Change in estimates(1) | 15 | 50 | (28) | ||||||||||||||
| Unwinding of restoration obligation | 4 | 9 | 12 | ||||||||||||||
| Transfer to assets and liabilities held for sale | 0 | (15) | 0 | ||||||||||||||
| Utilised during the year | (11) | (5) | (3) | ||||||||||||||
| Translation | 7 | 0 | (7) | ||||||||||||||
| Balance at end of year | 440 | 423 | 385 | ||||||||||||||
Other provisions(2) | |||||||||||||||||
| Balance at beginning of year | 78 | 205 | 247 | ||||||||||||||
| Charge to income statement | 12 | 39 | 24 | ||||||||||||||
| Change in estimates | 5 | 27 | 18 | ||||||||||||||
| Transfer to assets and liabilities held for sale | 0 | (115) | 0 | ||||||||||||||
| Transfer from (to) short term provisions included in trade and other payables | 2 | (73) | (26) | ||||||||||||||
| Unwinding of other provisions | 4 | 6 | 7 | ||||||||||||||
| Utilised during the year | (22) | (16) | (35) | ||||||||||||||
| Translation | (7) | 5 | (30) | ||||||||||||||
| Balance at end of year | 72 | 78 | 205 | ||||||||||||||
| Total environmental rehabilitation and other provisions | 731 | 697 | 827 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Environmental rehabilitation obligations | ||||||||
| Provision for decommissioning | ||||||||
| Balance at beginning of year | 279 | 272 | 296 | |||||
| Charge to income statement | 2 | — | — | |||||
Change in estimates(1) | 4 | (12 | ) | 5 | ||||
| Unwinding of decommissioning obligation | 12 | 12 | 11 | |||||
| Transfer to non-current assets and liabilities held for sale | (20 | ) | — | (11 | ) | |||
| Utilised during the year | (2 | ) | (2 | ) | (3 | ) | ||
| Translation | 11 | 9 | (26 | ) | ||||
| Balance at end of year | 286 | 279 | 272 | |||||
| Provision for restoration | ||||||||
| Balance at beginning of year | 426 | 411 | 555 | |||||
| Charge to income statement | 8 | 10 | 6 | |||||
Change in estimates(1) | (17 | ) | (2 | ) | (40 | ) | ||
| Unwinding of restoration obligation | 10 | 8 | 10 | |||||
| Transfer to non-current assets and liabilities held for sale | (3 | ) | — | (110 | ) | |||
| Transfer to current portion | (17 | ) | — | — | ||||
| Utilised during the year | (4 | ) | (3 | ) | (2 | ) | ||
| Translation | 6 | 2 | (8 | ) | ||||
| Balance at end of year | 409 | 426 | 411 | |||||
Other provisions(2)(3) | ||||||||
| Balance at beginning of year | 172 | 164 | 201 | |||||
| Charge to income statement | 17 | 11 | 11 | |||||
| Change in estimates | 15 | 5 | 24 | |||||
| Additions | 64 | — | — | |||||
| Transfer (to) from trade and other payables | (6 | ) | (2 | ) | 3 | |||
| Unwinding of other provisions | 1 | 1 | 1 | |||||
| Utilised during the year | (35 | ) | (30 | ) | (25 | ) | ||
| Translation | 19 | 23 | (51 | ) | ||||
| Balance at end of year | 247 | 172 | 164 | |||||
| Total environmental rehabilitation and other provisions | 942 | 877 | 847 | |||||
| (1)The change in estimates is attributable to changes in discount rates due to changes in global economic assumptions and changes in mine plans resulting in a change in |
28 PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Defined benefit plans | |||||||||||||||||
| The retirement schemes consist of the following: | |||||||||||||||||
| Post-retirement medical scheme for AngloGold Ashanti's South African employees | 77 | 93 | 93 | ||||||||||||||
| Other defined benefit plans | 6 | 7 | 7 | ||||||||||||||
| 83 | 100 | 100 | |||||||||||||||
F - 66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
28 PROVISION FOR PENSION AND POST-RETIREMENT BENEFITS (continued)
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| US Dollars | |||||||||||||||||
| Post-retirement medical scheme for AngloGold Ashanti's South African employees | |||||||||||||||||
| The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. | |||||||||||||||||
| The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performed as at 31 December 2020. | |||||||||||||||||
| Information with respect to the defined benefit liability is as follows: | |||||||||||||||||
| Benefit obligation | |||||||||||||||||
| Balance at beginning of year | 93 | 93 | 115 | ||||||||||||||
| Interest cost | 7 | 8 | 9 | ||||||||||||||
| Benefits paid | (7) | (8) | (10) | ||||||||||||||
| Actuarial (gain) loss | (9) | (2) | (5) | ||||||||||||||
| Translation | (5) | 2 | (16) | ||||||||||||||
| Balance at end of year | 79 | 93 | 93 | ||||||||||||||
| Settlement gain | (2) | 0 | 0 | ||||||||||||||
| Net amount recognised | 77 | 93 | 93 | ||||||||||||||
| Components of net periodic benefit cost | |||||||||||||||||
| Interest cost | 7 | 8 | 9 | ||||||||||||||
| Net periodic benefit cost | 7 | 8 | 9 | ||||||||||||||
| Assumptions | |||||||||||||||||
| Assumptions used to determine benefit obligations at the end of the year are as follows: | |||||||||||||||||
| Discount rate | 9.14 | % | 9.15 | % | 9.57 | % | |||||||||||
| Expected increase in health care costs | 6.06 | % | 7.25 | % | 7.35 | % | |||||||||||
| Assumed health care cost trend rates at 31 December: | |||||||||||||||||
| Health care cost trend assumed for next year | 6.06 | % | 7.25 | % | 7.35 | % | |||||||||||
| Rate to which the cost trend is assumed to decline (the ultimate trend rate) | 6.06 | % | 7.25 | % | 7.35 | % | |||||||||||
| Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect: | |||||||||||||||||
| Effect on total service and interest cost – 1% point increase | 0 | 1 | 1 | ||||||||||||||
| Effect on post-retirement benefit obligation – 1% point increase | 4 | 7 | 7 | ||||||||||||||
| Effect on total service and interest cost – 1% point decrease | 0 | (1) | (1) | ||||||||||||||
| Effect on post-retirement benefit obligation – 1% point decrease | (4) | (6) | (7) | ||||||||||||||
| Cash flows | |||||||||||||||||
| Contributions | |||||||||||||||||
| AngloGold Ashanti Limited expects to contribute $8m to the post-retirement medical plan in 2021. | |||||||||||||||||
| Estimated future benefit payments | |||||||||||||||||
| The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | |||||||||||||||||
| 2021 | 8 | ||||||||||||||||
| 2022 | 9 | ||||||||||||||||
| 2023 | 9 | ||||||||||||||||
| 2024 | 9 | ||||||||||||||||
| 2025 | 9 | ||||||||||||||||
| Thereafter | 33 | ||||||||||||||||
F - 67
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Defined benefit plans | ||||||||
| The group has made provision for pension, provident and medical schemes covering substantially all employees. The retirement schemes consist of the following: | ||||||||
| AngloGold Ashanti Limited Pension Fund | — | — | (18 | ) | ||||
| Post-retirement medical scheme for AngloGold Ashanti Limited South African employees | 114 | 109 | 97 | |||||
| Other defined benefit plans | 8 | 9 | 10 | |||||
| Sub-total | 122 | 118 | 89 | |||||
| Transferred to other non-current assets | ||||||||
| - AngloGold Ashanti Limited Pension Fund | — | — | 18 | |||||
| 122 | 118 | 107 | ||||||
| Other defined benefit plans include the following: | ||||||||
| -Obuasi Mines Staff Pension Scheme | 6 | 6 | 7 | |||||
| - Retiree Medical Plan for North American employees | 1 | 2 | 2 | |||||
| - Supplemental Employee Retirement Plan (SERP) for North America (USA) Inc. employees | 1 | 1 | 1 | |||||
| 8 | 9 | 10 | ||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions | 2017 | 2016 | 2015 | |||||
| US Dollars | ||||||||
| Post-retirement medical scheme for AngloGold Ashanti Limited South African employees | ||||||||
| The provision for post-retirement medical funding represents the provision for health care benefits for employees and retired employees and their registered dependants. | ||||||||
| The post-retirement benefit costs are assessed in accordance with the advice of independent professionally qualified actuaries. The actuarial method used is the projected unit credit funding method. This scheme is unfunded. The last valuation was performed as at 31 December 2017. | ||||||||
| Information with respect to the defined benefit liability is as follows: | ||||||||
| Benefit obligation | ||||||||
| Balance at beginning of year | 109 | 97 | 135 | |||||
| Interest cost | 10 | 10 | 10 | |||||
| Benefits paid | (9 | ) | (8 | ) | (9 | ) | ||
| Actuarial (gain) loss | (8 | ) | (2 | ) | (7 | ) | ||
| Translation | 13 | 12 | (32 | ) | ||||
| Balance at end of year | 115 | 109 | 97 | |||||
| Less: transfer to non-current assets and liabilities held for sale | (1 | ) | — | — | ||||
Net amount recognised(1) | 114 | 109 | 97 | |||||
(1) The obligation for post-retirement medical is unfunded. | ||||||||
| Components of net periodic benefit cost | ||||||||
| Interest cost | 10 | 10 | 10 | |||||
| Net periodic benefit cost | 10 | 10 | 10 | |||||
| Assumptions | ||||||||
| Assumptions used to determine benefit obligations at the end of the year are as follows: | ||||||||
| Discount rate | 9.29 | % | 9.31 | % | 10.10 | % | ||
| Expected increase in health care costs | 7.75 | % | 8.30 | % | 9.10 | % | ||
| Assumed health care cost trend rates at 31 December: | ||||||||
| Health care cost trend assumed for next year | 7.75 | % | 8.30 | % | 9.10 | % | ||
| Rate to which the cost trend is assumed to decline (the ultimate trend rate) | 7.75 | % | 8.30 | % | 9.10 | % | ||
| Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A 1% point change in assumed health care cost trend rates would have the following effect: | ||||||||
| Effect on total service and interest cost – 1% point increase | 1 | 1 | 1 | |||||
| Effect on post-retirement benefit obligation – 1% point increase | 10 | 10 | 9 | |||||
| Effect on total service and interest cost – 1% point decrease | (1 | ) | (1 | ) | (1 | ) | ||
| Effect on post-retirement benefit obligation – 1% point decrease | (8 | ) | (9 | ) | (8 | ) | ||
| Cash flows | ||||||||
| Contributions | ||||||||
| AngloGold Ashanti Limited expects to contribute $10m to the post-retirement medical plan in 2018. | ||||||||
| Estimated future benefit payments | ||||||||
| The following medical benefit payments, which reflect the expected future service, as appropriate, are expected to be paid: | ||||||||
| 2018 | 10 | |||||||
| 2019 | 10 | |||||||
| 2020 | 10 | |||||||
| 2021 | 11 | |||||||
| 2022 | 11 | |||||||
| Thereafter | 62 | |||||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Deferred taxation relating to temporary differences is made up as follows: | |||||||||||||||||
| Liabilities | |||||||||||||||||
| Tangible assets (owned) | 373 | 370 | 521 | ||||||||||||||
| Right-of-use assets | 40 | 48 | 0 | ||||||||||||||
| Inventories | 20 | 24 | 37 | ||||||||||||||
| Other | 13 | 9 | 5 | ||||||||||||||
| 446 | 451 | 563 | |||||||||||||||
| Assets | |||||||||||||||||
| Provisions | 122 | 209 | 218 | ||||||||||||||
| Lease liabilities | 42 | 52 | 0 | ||||||||||||||
| Tax losses | 15 | 45 | 24 | ||||||||||||||
| Other | 28 | 9 | 6 | ||||||||||||||
| 207 | 315 | 248 | |||||||||||||||
| Net deferred taxation liability | 239 | 136 | 315 | ||||||||||||||
| Included in the statement of financial position as follows: | |||||||||||||||||
| Deferred tax assets | 7 | 105 | 0 | ||||||||||||||
| Deferred tax liabilities | 246 | 241 | 315 | ||||||||||||||
| Net deferred taxation liability | 239 | 136 | 315 | ||||||||||||||
| The movement on the net deferred tax balance is as follows: | |||||||||||||||||
| Balance at beginning of year | 136 | 315 | 359 | ||||||||||||||
| Taxation of items included in income statement from continuing and discontinued operations | 53 | (189) | (30) | ||||||||||||||
| Taxation of non-current assets and liabilities included in discontinued operations | 28 | 0 | 0 | ||||||||||||||
| Taxation on items included in other comprehensive income | 6 | (2) | 5 | ||||||||||||||
| Transfer to non-current assets and liabilities held for sale | 0 | 15 | 0 | ||||||||||||||
| Translation | 16 | (3) | (19) | ||||||||||||||
| Balance at end of year | 239 | 136 | 315 | ||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Deferred taxation relating to temporary differences is made up as follows: | ||||||||
| Liabilities | ||||||||
| Tangible assets | 604 | 730 | 743 | |||||
| Inventories | 33 | 31 | 35 | |||||
| Other | 15 | 10 | 14 | |||||
| 652 | 771 | 792 | ||||||
| Assets | ||||||||
| Provisions | 229 | 245 | 242 | |||||
| Tax losses | 60 | 31 | 34 | |||||
| Other | 4 | 3 | 3 | |||||
| 293 | 279 | 279 | ||||||
| Net deferred taxation liability | 359 | 492 | 513 | |||||
| Included in the statement of financial position as follows: | ||||||||
| Deferred tax assets | 4 | 4 | 1 | |||||
| Deferred tax liabilities | 363 | 496 | 514 | |||||
| Net deferred taxation liability | 359 | 492 | 513 | |||||
| The movement on the deferred tax balance is as follows: | ||||||||
| Balance at beginning of year | 492 | 513 | 440 | |||||
| Taxation of items included in income statement | (68 | ) | (45 | ) | 140 | |||
| Taxation on items included in other comprehensive income | (6 | ) | 2 | 2 | ||||
| Transfer to non-current assets and liabilities held for sale | (73 | ) | — | — | ||||
| Translation | 14 | 22 | (69 | ) | ||||
| Balance at end of year | 359 | 492 | 513 | |||||
Provision has been made for South African income tax or foreign taxes that may result from future remittances of undistributed earnings of foreign subsidiaries or foreign corporate joint ventures, where the group is able to assert that the undistributed earnings are not permanently reinvested. In all other cases, the foreign subsidiaries reinvest the undistributed earnings into future capital expansion projects, maintenance capital and ongoing working capital funding requirements. Unrecognised taxable temporary differences pertaining to undistributed earnings totalled $384m (2016: $366m; 2015: $357m)$1,806m (2019: $1,787m(1); 2018: $1,663m(1)).
If remitted, the undistributed earnings may be subject to withholding taxes between 0% - 10%.
(1) Prior year amounts have been represented to disclose the gross undistributed earnings. The representation has no impact on deferred tax previously recognised.
F - 68
30 TRADE, OTHER PAYABLES AND DEFERRED INCOMEPROVISIONS
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Non-current | |||||||||||||||||
| Other Payables | 8 | 15 | 3 | ||||||||||||||
| Current | |||||||||||||||||
| Trade payables | 403 | 365 | 350 | ||||||||||||||
Accruals(1) | 191 | 167 | 186 | ||||||||||||||
| Short-term provisions | 30 | 53 | 20 | ||||||||||||||
| Derivatives | 0 | 0 | 9 | ||||||||||||||
| Other payables | 3 | 1 | 29 | ||||||||||||||
| 627 | 586 | 594 | |||||||||||||||
| Total trade, other payables and provisions | 635 | 601 | 597 | ||||||||||||||
| Current trade and other payables are non-interest bearing and are normally settled within 60 days. | |||||||||||||||||
(1) Includes accrual for silicosis of $12m (2019: $11m; 2018: $16m).
F - 69
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Non-current | 3 | 4 | 5 | |||||
| Current | ||||||||
| Trade payables | 358 | 381 | 306 | |||||
| Accruals and deferred income | 193 | 206 | 187 | |||||
| Short-term provisions | 22 | — | — | |||||
| Accruals for retrenchment costs | 35 | — | — | |||||
| Other payables | 30 | 28 | 23 | |||||
| 638 | 615 | 516 | ||||||
| Total trade, other payables and deferred income | 641 | 619 | 521 | |||||
| Current trade and other payables are non-interest bearing and are normally settled within 60 days. | ||||||||
31 TAXATION
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Balance at beginning of year | 62 | 54 | 50 | ||||||||||||||
| Refunds during the year | 0 | 7 | 5 | ||||||||||||||
| Payments during the year | (431) | (228) | (171) | ||||||||||||||
| Taxation of items included in the income statement | 562 | 298 | 242 | ||||||||||||||
| Offset of VAT and other taxes | (41) | (50) | (63) | ||||||||||||||
| Transfer from tax receivable relating to North America | (4) | (10) | 0 | ||||||||||||||
| Withholding tax transferred to trade, other payables and provisions | (7) | 0 | 0 | ||||||||||||||
| Translation | (2) | (9) | (9) | ||||||||||||||
| Balance at end of year | 139 | 62 | 54 | ||||||||||||||
| Included in the statement of financial position as follows: | |||||||||||||||||
| Taxation asset included in trade, other receivables and other assets | (14) | (10) | (6) | ||||||||||||||
| Taxation liability | 153 | 72 | 60 | ||||||||||||||
| 139 | 62 | 54 | |||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Balance at beginning of year | 97 | 64 | 41 | |||||
| Refunds during the year | 14 | 12 | 21 | |||||
| Payments during the year | (174 | ) | (165 | ) | (184 | ) | ||
| Taxation of items included in the income statement | 190 | 234 | 192 | |||||
| Offset of VAT and other taxes | (78 | ) | (47 | ) | — | |||
| Translation | 1 | (1 | ) | (6 | ) | |||
| Balance at end of year | 50 | 97 | 64 | |||||
| Included in the statement of financial position as follows: | ||||||||
| Taxation asset included in trade and other receivables | (3 | ) | (14 | ) | (27 | ) | ||
| Taxation liability | 53 | 111 | 91 | |||||
| 50 | 97 | 64 | ||||||
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Profit (loss) before taxation | 1,589 | 619 | 445 | ||||||||||||||
| Adjusted for: | |||||||||||||||||
| Movement on non-hedge derivatives and other commodity contracts | 0 | (6) | 6 | ||||||||||||||
| Amortisation of tangible assets and right of use assets (note 4) | 568 | 580 | 553 | ||||||||||||||
| Finance costs and unwinding of obligations (note 7) | 177 | 172 | 168 | ||||||||||||||
| Environmental, rehabilitation and other expenditure | (50) | (6) | (23) | ||||||||||||||
| Impairment, derecognition of assets and profit (loss) on disposal | (1) | 3 | 5 | ||||||||||||||
| Other expenses (income) | 51 | 41 | 28 | ||||||||||||||
| Amortisation of intangible assets (note 4) | 2 | 3 | 5 | ||||||||||||||
| Interest income | (27) | (14) | (8) | ||||||||||||||
| Share of associates and joint ventures’ (profit) loss (note 8) | (278) | (168) | (122) | ||||||||||||||
| Other non-cash movements | 35 | 43 | (4) | ||||||||||||||
| Movements in working capital | (238) | (165) | (122) | ||||||||||||||
| 1,828 | 1,102 | 931 | |||||||||||||||
| Movements in working capital: | |||||||||||||||||
| (Increase) decrease in inventories | (83) | (67) | (2) | ||||||||||||||
| (Increase) decrease in trade, other receivables and other assets | (163) | (138) | (74) | ||||||||||||||
| Increase (decrease) in trade, other payables and provisions | 8 | 40 | (46) | ||||||||||||||
| (238) | (165) | (122) | |||||||||||||||
F - 70
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Profit (loss) before taxation | (63 | ) | 269 | 257 | ||||
| Adjusted for: | ||||||||
| Movement on non-hedge derivatives and other commodity contracts | (10 | ) | (19 | ) | 7 | |||
| Amortisation of tangible assets (note 4) | 817 | 789 | 737 | |||||
| Finance costs and unwinding of obligations (note 7) | 169 | 180 | 245 | |||||
| Environmental, rehabilitation and other expenditure | (30 | ) | (13 | ) | (56 | ) | ||
| Special items | 394 | 44 | 60 | |||||
| Amortisation of intangible assets (notes 4 and 15) | 6 | 20 | 40 | |||||
| Fair value adjustment on issued bonds | — | (9 | ) | (66 | ) | |||
| Interest received (note 3) | (15 | ) | (22 | ) | (28 | ) | ||
| Share of associates and joint ventures’ (profit) loss (note 8) | (22 | ) | (11 | ) | (88 | ) | ||
| Exchange loss on foreign currency reserve release | — | 60 | — | |||||
| Other non-cash movements | 61 | 90 | 53 | |||||
| Movements in working capital | (156 | ) | (76 | ) | 89 | |||
| 1,151 | 1,302 | 1,250 | ||||||
| Movements in working capital: | ||||||||
| (Increase) decrease in inventories | (67 | ) | (48 | ) | 99 | |||
| (Increase) decrease in trade, other receivables and other assets | (86 | ) | (131 | ) | 108 | |||
| Increase (decrease) in trade, other payables and deferred income | (3 | ) | 103 | (118 | ) | |||
| (156 | ) | (76 | ) | 89 | ||||
Table of Contents
32NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
33 RELATED PARTIES
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Material related party transactions were as follows (not attributable): | |||||||||||||||||
| Sales and services rendered to related parties | |||||||||||||||||
| Associates | 11 | 19 | 0 | ||||||||||||||
| Joint ventures | 8 | 7 | 10 | ||||||||||||||
| Purchases and services acquired from related parties | |||||||||||||||||
| Associates | 20 | 12 | 19 | ||||||||||||||
| Joint ventures | 1 | 1 | 0 | ||||||||||||||
| Outstanding balances arising from sale of goods and services due by related parties | |||||||||||||||||
| Associates | 11 | 19 | 19 | ||||||||||||||
| Joint ventures | 0 | 1 | 0 | ||||||||||||||
| Amounts owed to/due by related parties above are unsecured and non-interest bearing. | |||||||||||||||||
| Loans advanced to joint ventures and associates | |||||||||||||||||
| Loans advanced to associates and joint ventures are included in the carrying value of investments in associates and joint ventures (note 19) | |||||||||||||||||
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Material related party transactions were as follows (not attributable): | ||||||||
| Sales and services rendered to related parties | ||||||||
| Joint ventures | 12 | 16 | 6 | |||||
| Purchases and services acquired from related parties | ||||||||
| Associates | 16 | 15 | 8 | |||||
| Joint ventures | 3 | 6 | — | |||||
| Outstanding balances arising from sale of goods and services due by related parties | ||||||||
| Associates | 7 | — | — | |||||
| Joint ventures | 2 | 8 | — | |||||
| Amounts owed to/due by related parties above are unsecured and non-interest bearing. | ||||||||
| Loans advanced to joint ventures and associates | ||||||||
| Rand Refinery (Pty) Limited | ||||||||
| During the year the loan was converted to preference shares. There are no fixed repayment terms. The loan had accrued interest at JIBAR plus 3.5% | — | 20 | 27 | |||||
| Loans advanced to associates and joint ventures are included in the carrying value of investments in associates and joint ventures (note 17) | ||||||||
Executive contracts
All members of the Executive CommitteeManagement team have permanent employment contracts which entitle them to standard group benefits as defined by their specific region and participation in the company’s short-term incentive scheme, the BonusCompany’s Deferred Share Plan (BSP) and the Long Term Incentive Plan (LTIP). All recently updated Executive Committee contracts include details on participation in the Co-Investment Plan (CIP)(DSP).
South AfricanAfrican-based executives have an off-shore retainerare paid a portion of their remuneration offshore, which is detailed under a separate contract. This reflects the percentageglobal roles and responsibilities and takes account of their time focused on offshore business requirements. The offshore pay has been increased to a maximum cap of 40% of base pay due to a review of the amount of time spent outside South Africa on the offshore responsibilities of each executive team member. Where practical the offshore portion is now pensionable.
The executive contracts are reviewed annually and currently continue to include a change ofin control provision. The change ofin control is subject to the following triggers:
•The acquisition of all or part of AngloGold Ashanti; or
•A number of shareholders holding less than 35%thirty-five percent of the company’sCompany’s issued share capital consorting to gain a majority of the board and make management decisions; and
•The contracts of Executive Committee members are either terminated or their role and employment conditions are curtailed.
In the event of a change ofin control becoming effective, the executive management team will in certain circumstances be subject to both the notice period and the change ofin control contract terms. The notice period applied per category of executive and the change ofin control periods as at 31 December 20172020 were as follows:
| Executive Committee member | Notice Period | Change of control | |||||||||
CEO(1) | 12 months | 12 months | |||||||||
CFO(2) | 6 months | 6 months | |||||||||
| 6 months | 6 months | ||||||||||
(1) KC Ramon in her Interim CEO role remains on a 6 months notice period and 6 month change in control period
(2) I Kramer in his Interim CFO role remains on a 3 months notice period and a 3 months change in control period
F - 71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Directors and other key management personnel
Executive Directors’directors’ and prescribed officers’ remuneration
The tables below illustrate the single total figure of remuneration and the total cash equivalent received reconciliation of Executive Directors and Prescribed Officers’Officers as prescribed by King IV. It comprises an overview of all the pay elements available to the executive management team for the year ended 31 December 2020.
The following are definitions of terminology used in the adoption of the reporting requirements under King IV.
Reflected
In respect of the DSP awards, remuneration is reflected when performance conditions have been met during the reporting period.
Settled
This refers to remuneration that has been included in prior reporting periods and has now become payable (but may not yet have been paid) to the executive in the current period.
Single total figure of remuneration | Base Salary | Pension scheme benefits | Cash in lieu of dividends | Other benefits(2) | Awards earned during the period reflected but not yet settled | Other Payment | Single total figure of remuneration | ||||||||||||||||||||||||||||
| ZAR denominated portion | USD/AUD denominated portion(1) | DSP awards(3) | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||
| ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | USD '000 (9) | USD '000(9) | USD '000(9) | |||||||||||||||||||||||||
| Executive directors | |||||||||||||||||||||||||||||||||||
KPM Dushnisky(4) | 0 | 21,657 | 5,266 | 13 | 1,759 | 25,796 | 0 | 54,491 | 3,312 | 6,268 | 7,570 | ||||||||||||||||||||||||
KC Ramon(5) | 5,864 | 4,594 | 834 | 385 | 924 | 22,507 | 16,513 | 51,621 | 3,138 | 5,097 | 3,547 | ||||||||||||||||||||||||
| Total executive directors | 5,864 | 26,251 | 6,100 | 398 | 2,683 | 48,303 | 16,513 | 106,112 | 6,450 | 11,365 | 11,117 | ||||||||||||||||||||||||
| Prescribed officers | |||||||||||||||||||||||||||||||||||
| SD Bailey | 4,465 | 3,305 | 0 | 75 | 1,259 | 24,103 | 0 | 33,207 | 2,019 | 2,190 | 0 | ||||||||||||||||||||||||
| PD Chenard | 5,282 | 4,255 | 0 | 0 | 2,468 | 8,554 | 0 | 20,559 | 1,250 | 3,292 | 0 | ||||||||||||||||||||||||
| GJ Ehm | 0 | 10,462 | 284 | 409 | 710 | 32,108 | 0 | 43,973 | 2,673 | 4,742 | 3,286 | ||||||||||||||||||||||||
| L Eybers | 0 | 10,832 | 284 | 377 | 798 | 31,896 | 0 | 44,187 | 2,686 | 4,659 | 2,511 | ||||||||||||||||||||||||
I Kramer(6) | 1,156 | 0 | 144 | 0 | 24 | 6,085 | 289 | 7,698 | 468 | 0 | 0 | ||||||||||||||||||||||||
LMarwick(7) | 1,896 | 939 | 256 | 0 | 136 | 16,615 | 571 | 20,413 | 1,241 | 0 | 0 | ||||||||||||||||||||||||
| S Ntuli | 5,202 | 3,851 | 728 | 95 | 1,387 | 26,942 | 0 | 38,205 | 2,322 | 2,565 | 0 | ||||||||||||||||||||||||
ME Sanz Perez(8) | 2,353 | 1,763 | 514 | 300 | 1,809 | 0 | 0 | 6,739 | 410 | 3,868 | 2,833 | ||||||||||||||||||||||||
| TR Sibisi | 4,484 | 3,518 | 1,000 | 258 | 58 | 20,802 | 0 | 30,120 | 1,831 | 3,514 | 2,699 | ||||||||||||||||||||||||
| Total prescribed officers | 24,838 | 38,925 | 3,210 | 1,514 | 8,649 | 167,105 | 860 | 245,101 | 14,900 | 24,830 | 11,329 | ||||||||||||||||||||||||
Notes
(1)Salary denominated in USD/AUD for global roles and responsibilities converted to ZAR on payment date.
(2)Other benefits include health care, group personal accident, disability, funeral cover, accommodation allowance, pension allowance, airfare and surplus leave encashed. Surplus leave days accrued are automatically encashed unless work requirements allow for carry over.
(3)The fair value of the DSP comprises of a cash bonus and share awards for the year ended 31 December 2020. The cash bonus is payable in February 2021 and the share awards are allocated in February 2021. Shares vest over a 5-year period in equal tranches.
(4)KPM Dushnisky received the cash portion only for 2020 due to his resignation, aligned to the standard terms and conditions of termination.
(5)KC Ramon was appointed as Interim CEO effective 1 September 2020. Included in the DSP award is the DSP cash bonus and share award for 2020 calculated on the CFO role for 8 months only. Other payments reflect the acting allowance paid and the DSP cash bonus and share award for the acting period of 4 months calculated on the CEO target bonus opportunity.
(6)I Kramer was appointed as Interim CFO and prescribed officer effective 1 September 2020. All salary payments, including pension and other benefits, were pro-rated and aligned to the appointment date. Included in the DSP award is the DSP cash bonus and share award for the full year of 2020 (DSP award was not pro-rated. It was calculated based on his normal Senior Vice President salary plus 4 months acting allowance on the Senior Vice President target bonus opportunity). Other payments reflect the acting allowance for the acting period from 1 September to 31 December 2020.
(7) L Marwick was appointed as prescribed officer and Interim Company Secretary effective 1 July 2020. All salary payments, including pension and other benefits, were pro-rated and aligned to the appointment date. Included in the DSP award is the DSP cash bonus and share award for the full year of 2020 (DSP award was not pro-rated. It was calculated based on the prescribed officer target bonus opportunity for the full year aligned to the standard conditions of employment). Other benefits reflect the acting allowance for the acting period in the Company Secretary role from 1 July 2020 to 10 January 2021.
(8) ME Sanz Perez resigned effective 30 June 2020. All salary payments, including salary, pension and other benefits, are pro-rated in accordance with the resignation date.
(9)Convenience conversion to USD at the year-to-date average exchange rate of $1: R16.4506 (2019: $1: R14.445; 2018: R13.247).
F - 72
Salary(1) | Performance related payments(2) | Pension scheme benefits | Other benefits and encashed leave(3) | Subtotal | Pre-tax gain on share options | Total | Total | Total | Total | ||||||||||||||||
| SA Rands | US Dollars(4) | US Dollars(4) | US Dollars(4) | ||||||||||||||||||||||
| Figures in thousands | 2017 | 2016 | 2015 | ||||||||||||||||||||||
| Executive Directors | |||||||||||||||||||||||||
| S Venkatakrishnan | 13,318 | 8,382 | 3,296 | 3,388 | 28,384 | — | 28,384 | 2,134 | 1,832 | 1,905 | |||||||||||||||
| KC Ramon | 8,423 | 4,607 | 727 | 1,627 | 15,384 | — | 15,384 | 1,157 | 947 | 1,024 | |||||||||||||||
| 21,741 | 12,989 | 4,023 | 5,015 | 43,768 | — | 43,768 | 3,291 | 2,779 | 2,929 | ||||||||||||||||
| Prescribed Officers | |||||||||||||||||||||||||
CE Carter(5) | 9,408 | 4,411 | 1,330 | 1,717 | 16,866 | 8,238 | 25,104 | 1,887 | 1,535 | 1,906 | |||||||||||||||
| GJ Ehm | 8,778 | 4,116 | 306 | 1,489 | 14,689 | 4,588 | 19,277 | 1,449 | 1,693 | 1,404 | |||||||||||||||
L Eybers(6) | 7,400 | 3,691 | 327 | 2,570 | 13,988 | — | 13,988 | 1,051 | — | — | |||||||||||||||
| DC Noko | 6,767 | 3,173 | 644 | 1,888 | 12,472 | — | 12,472 | 938 | 961 | 976 | |||||||||||||||
| ME Sanz Perez | 6,737 | 3,159 | 795 | 1,078 | 11,769 | — | 11,769 | 885 | 1,640 | 823 | |||||||||||||||
| CB Sheppard | 7,154 | 3,354 | 681 | 272 | 11,461 | — | 11,461 | 862 | 721 | 511 | |||||||||||||||
| TR Sibisi | 5,786 | 2,886 | 703 | 77 | 9,452 | — | 9,452 | 711 | 541 | — | |||||||||||||||
| Retired prescribed officers | 8,189 | — | 2,887 | 22,601 | 33,677 | 29,281 | 62,958 | 4,733 | 5,978 | 4,719 | |||||||||||||||
| 60,219 | 24,790 | 7,673 | 31,692 | 124,374 | 42,107 | 166,481 | 12,516 | 13,069 | 10,339 | ||||||||||||||||
| Total Executive Directors’ and Prescribed Officers’ remuneration ZAR | 81,960 | 37,779 | 11,696 | 36,707 | 168,142 | 42,107 | 210,249 | ||||||||||||||||||
| Total Executive Directors’ and Prescribed Officers’ remuneration USD | 6,162 | 2,840 | 879 | 2,760 | 12,641 | 3,166 | 15,807 | 15,848 | 13,268 | ||||||||||||||||
Directors and other key management personnel (continued)
CONTINUED| Total cash equivalent received reconciliation | Single total figure of remuneration | Awards earned during the period reflected but not yet settled | DSP 2019 cash portion settled | BSP, CIP, DSP and LTIP share awards settled | Sign-on cash settled | Sign-on shares settled | Total cash equivalent received reconciliation | |||||||||||||||||||||||||||||||||||||||||||
DSP awards(1) | Grant fair value(2) | Market movement since grant date(2) | Vesting fair value(2) | Grant fair value(2) | Currency movement since grant date(2) | Settlement fair value(2) | Grant fair value(2) | Market movement since grant date(2) | Vesting fair value(2) | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||||||||
| ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | ZAR '000 | USD '000(4) | USD '000(4) | USD '000(4) | |||||||||||||||||||||||||||||||||||
| Executive directors | ||||||||||||||||||||||||||||||||||||||||||||||||||
KPM Dushnisky(3) | 54,491 | (25,796) | 9,177 | 2,770 | 1,810 | 4,579 | 14,680 | (245) | 14,435 | 10,094 | 18,379 | 28,473 | 85,359 | 5,189 | 6,298 | 550 | ||||||||||||||||||||||||||||||||||
| KC Ramon | 51,621 | (38,137) | 9,214 | 22,804 | 24,878 | 47,682 | 0 | 0 | 0 | 0 | 0 | 0 | 70,380 | 4,278 | 3,057 | 1,936 | ||||||||||||||||||||||||||||||||||
| Total executive directors | 106,112 | (63,933) | 18,391 | 25,574 | 26,688 | 52,261 | 14,680 | (245) | 14,435 | 10,094 | 18,379 | 28,473 | 155,739 | 9,467 | 9,355 | 2,486 | ||||||||||||||||||||||||||||||||||
| — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Prescribed officers | ||||||||||||||||||||||||||||||||||||||||||||||||||
| SD Bailey | 33,207 | (24,103) | 5,473 | 4,960 | 5,278 | 10,237 | 0 | 0 | 0 | 0 | 0 | 0 | 24,814 | 1,508 | 1,041 | 0 | ||||||||||||||||||||||||||||||||||
| PD Chenard | 20,559 | (8,554) | 5,557 | 0 | 0 | 0 | 3,165 | 0 | 3,165 | 6,513 | 9,012 | 15,525 | 36,252 | 2,204 | 900 | 0 | ||||||||||||||||||||||||||||||||||
| GJ Ehm | 43,973 | (32,108) | 8,612 | 20,969 | 21,781 | 42,750 | 0 | 0 | 0 | 0 | 0 | 0 | 63,227 | 3,843 | 2,536 | 1,751 | ||||||||||||||||||||||||||||||||||
| L Eybers | 44,187 | (31,896) | 8,518 | 19,688 | 21,295 | 40,983 | 0 | 0 | 0 | 0 | 0 | 0 | 61,792 | 3,756 | 2,082 | 1,233 | ||||||||||||||||||||||||||||||||||
| I Kramer | 7,698 | (6,085) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,613 | 98 | 0 | 0 | ||||||||||||||||||||||||||||||||||
| L Marwick | 20,413 | (16,615) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3,798 | 231 | 0 | 0 | ||||||||||||||||||||||||||||||||||
| S Ntuli | 38,205 | (26,942) | 6,367 | 6,289 | 6,710 | 12,999 | 0 | 0 | 0 | 0 | 0 | 0 | 30,629 | 1,862 | 1,160 | 0 | ||||||||||||||||||||||||||||||||||
| ME Sanz Perez | 6,739 | 0 | 6,224 | 17,588 | 18,861 | 36,448 | 0 | 0 | 0 | 0 | 0 | 0 | 49,411 | 3,004 | 2,425 | 1,399 | ||||||||||||||||||||||||||||||||||
| TR Sibisi | 30,120 | (20,802) | 5,943 | 15,258 | 16,122 | 31,380 | 0 | 0 | 0 | 0 | 0 | 0 | 46,641 | 2,835 | 2,249 | 886 | ||||||||||||||||||||||||||||||||||
| Total prescribed officers | 245,101 | (167,105) | 46,694 | 84,752 | 90,047 | 174,797 | 3,165 | 0 | 3,165 | 6,513 | 9,012 | 15,525 | 318,177 | 19,341 | 12,393 | 5,269 | ||||||||||||||||||||||||||||||||||
(1)The fair value of optionsthe DSP comprises of a cash bonus and awards granted
Balance at 1 January 2017 | Granted during 2017 | Exercised during 2017 | Lapsed during 2017 | Balance as at 31 December 2017 | (1) | Vested balance at 31 December 2017 | |||||||||||||
| Executive Directors | |||||||||||||||||||
| S Venkatakrishnan | 689,087 | 72,118 | — | 89,553 | 671,652 | 343,678 | |||||||||||||
| KC Ramon | 211,785 | 42,878 | — | 37,099 | 217,564 | 44,887 | |||||||||||||
| Total Executive Directors | 900,872 | 114,996 | — | 126,652 | 889,216 | 388,565 | |||||||||||||
| Prescribed Officers | |||||||||||||||||||
| CE Carter | 250,386 | 38,600 | 58,260 | 51,426 | 179,300 | — | |||||||||||||
| GJ Ehm | 331,354 | 33,580 | 31,172 | 59,637 | 274,125 | 105,508 | |||||||||||||
| L Eybers | 58,563 | 18,101 | — | 11,179 | 65,485 | 17,280 | |||||||||||||
| DC Noko | 244,592 | 27,626 | — | 40,299 | 231,919 | 100,410 | |||||||||||||
| ME Sanz Perez | 205,213 | 29,398 | — | 42,538 | 192,073 | 59,244 | |||||||||||||
| CB Sheppard | 27,552 | 29,205 | — | — | 56,757 | 5,076 | |||||||||||||
| TR Sibisi | — | 23,621 | — | — | 23,621 | — | |||||||||||||
| Retired prescribed officer | 475,616 | — | 214,256 | 261,360 | — | — | |||||||||||||
| Total Prescribed Officers | 1,593,276 | 200,131 | 303,688 | 466,439 | 1,023,280 | 287,518 | |||||||||||||
| Other | 6,139,505 | 1,611,422 | 1,527,167 | 1,138,367 | — | 5,085,393 | 1,735,705 | ||||||||||||
| Total share incentive scheme | 8,633,653 | 1,926,549 | 1,830,855 | 1,731,458 | 6,997,889 | 2,411,788 | |||||||||||||
(2)Reflects the sum of $723,854all the grant fair value, the sum of all the share price movements since grant to vesting date and Graham Ehm who exercised 46,316the sum of all the vesting fair value for the vested DSP 2019, vested CSLTIP 2017, vested BSP 2018, vested CIP 2018 and vested sign-on share awards for a pre-tax gain of $392,431.
(3) KPM Dushnisky's cash portion of the DSP 2019 award was reduced by USD800,000. This is in lieu of the sign-on bonus which Mr Dushnisky voluntarily repaid after his former employer paid him a discretionary cash incentive scheme.for the same period.
F - 73
Balance at 1 January 2017 | Granted during 2017 | Exercised during 2017 | Lapsed during 2017 | Balance as at 31 December 2017 | ||||||||||
| Executive Directors | ||||||||||||||
| S Venkatakrishnan | 120,000 | 174,872 | — | — | 294,872 | |||||||||
| KC Ramon | 120,000 | 110,595 | — | — | 230,595 | |||||||||
| Total Executive Directors | 240,000 | 285,467 | — | — | 525,467 | |||||||||
| Prescribed Officers | ||||||||||||||
| CE Carter | 120,000 | 110,595 | — | — | 230,595 | |||||||||
| GJ Ehm | 120,000 | 110,595 | — | — | 230,595 | |||||||||
| L Eybers | 20,000 | 97,535 | — | — | 117,535 | |||||||||
| DC Noko | 120,000 | 88,850 | — | — | 208,850 | |||||||||
| ME Sanz Perez | 120,000 | 88,463 | — | — | 208,463 | |||||||||
| CB Sheppard | 120,000 | 93,928 | — | — | 213,928 | |||||||||
| TR Sibisi | 120,000 | 75,971 | — | — | 195,971 | |||||||||
| Retired prescribed officer | 120,000 | — | 17,497 | 102,503 | — | |||||||||
| Total Prescribed Officers | 860,000 | 665,937 | 17,497 | 102,503 | 1,405,937 | |||||||||
| Other | 1,364,630 | 1,621,033 | 42,355 | 405,094 | 2,538,214 | |||||||||
| Total share incentive scheme | 2,464,630 | 2,572,437 | 59,852 | 507,597 | 4,469,618 | |||||||||
Directors and other key management personnel(continued)
Details of the previous year’s financial results:share incentive scheme awards are included below.
BSP awards
| Balance at 1 January 2020 | Granted | Vested, deemed settled | Forfeited/ Lapsed | Balance at 31 December 2020 | Fair value of granted awards | Fair value of vested awards(1) | Fair value of unvested awards at 31 December 2020 | |||||||||||||||||||
| ZAR'000 | ZAR'000 | ZAR'000 | ||||||||||||||||||||||||
| Executive Directors | ||||||||||||||||||||||||||
| KPM Dushnisky | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| KC Ramon | 27,817 | 0 | 27,817 | 0 | 0 | 0 | 9,402 | 0 | ||||||||||||||||||
| Total executive directors | 27,817 | 0 | 27,817 | 0 | 0 | 0 | 9,402 | 0 | ||||||||||||||||||
| Prescribed officers | ||||||||||||||||||||||||||
| SD Bailey | 8,306 | 0 | 8,306 | 0 | 0 | 0 | 2,807 | 0 | ||||||||||||||||||
| PD Chenard | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
| GJ Ehm | 22,997 | 0 | 22,997 | 0 | 0 | 0 | 7,773 | 0 | ||||||||||||||||||
| L Eybers | 22,288 | 0 | 22,288 | 0 | 0 | 0 | 7,533 | 0 | ||||||||||||||||||
I Kramer (2) | 3,716 | 0 | 3,716 | 0 | 0 | 0 | 1,256 | 0 | ||||||||||||||||||
L Marwick (2) | 3,577 | 0 | 3,577 | 0 | 0 | 0 | 1,209 | 0 | ||||||||||||||||||
| S Ntuli | 10,637 | 0 | 10,637 | 0 | 0 | 0 | 3,595 | 0 | ||||||||||||||||||
| ME Sanz Perez | 19,072 | 0 | 19,072 | 0 | 0 | 0 | 6,446 | 0 | ||||||||||||||||||
| TR Sibisi | 17,705 | 0 | 17,705 | 0 | 0 | 0 | 5,984 | 0 | ||||||||||||||||||
| Total prescribed officers | 108,298 | 0 | 108,298 | 0 | 0 | 0 | 36,603 | 0 | ||||||||||||||||||
| Other management | 809,659 | 0 | 809,659 | 0 | 0 | 0 | 273,665 | 0 | ||||||||||||||||||
| Total BSP awards | 945,774 | 0 | 945,774 | 0 | 0 | 0 | 319,670 | 0 | ||||||||||||||||||
(1)The fair value of vested awards represents the value deemed received on settlement date. This is the final vesting for this scheme as it is closed.
(2)Opening balances were included as part of Other management.
F - 74
Total(1) | Total | ||||
| 2017 | 2016 | ||||
| Executive Directors | |||||
| S Venkatakrishnan | 72,118 | 49,962 | |||
| KC Ramon | 42,878 | 30,323 | |||
| 114,996 | 80,285 | ||||
| Prescribed Officers | |||||
| CE Carter | 38,600 | 36,666 | |||
| GJ Ehm | 33,580 | 31,602 | |||
| L Eybers | 18,101 | — | |||
| DC Noko | 27,626 | 20,080 | |||
| ME Sanz Perez | 29,398 | 19,992 | |||
| CB Sheppard | 29,205 | 10,152 | |||
| TR Sibisi | 23,621 | — | |||
| Retired prescribed officer | — | 63,828 | |||
| 200,131 | 182,320 | ||||
| Total awards to executive management | 315,127 | 262,605 | |||
LTIP awards
(1)The fair value of vested awards represents the value deemed received on settlement date. This is the final vesting for this scheme as it is closed. (2)Opening balances were included as part of Other management. F - 75 CIP matched awards
(1)The fair value of matched awards represents the value received on settlement dates. This is the final vesting for this scheme as it is closed. Sign-on share awards
(1)The fair value of granted awards represents the value of awards, calculated using a five business day volume weighted average share price prior to grant date. The share awards were granted on start date and will vest over a 2-year period in equal tranches in accordance with the JSE Listing requirements. (2)The fair value of KDM Dushnisky's vested awards represents the value received on settlement date, 26 February 2020. The fair value of PD Chenard's vested awards represents the value received on settlement date, 12 May 2020. (3)The fair value of unvested awards is calculated using the closing share price as at 31 December. F - 76 DSP awards
(1)The fair value of granted awards represents the value of awards, calculated using a five-business day volume weighted average share price prior to grant date, 25 February 2020. (2)The fair value of vested awards represents the value deemed received on settlement date. (3)The fair value of unvested awards is calculated using the closing share price as at 31 December. (4) Share awards lapsed due to resignation. (5)Opening balances were included as part of Other management. F - 77 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Executive Director remunerationDirectors’ fees and allowances
The board elected not to take an increase in 2020, given the COVID-19 pandemic. Non-executive directors have not received an increase in their fees since 2014. Note that while the fees have not changed, the absolute figures will vary according to the number of meetings held in a particular year.
The table below details the fees andpayable to non-executive directors in accordance with the Company’s shareholder approved policy together with allowances paid in the year. It is to Non-Executive Directors:be noted that certain non-executive directors either waived an element of their fees or donated part of their fees to the South African Solidarity Fund or associated funds, and as such the table does not reflect the fees that were actually paid or received by these non-executive directors:
Figures in thousands(1) | Figures in thousands(1) | ||||||||||||||||
Director fees | Committee fees | Travel allowance | Total | Total | Total | ||||||||||||
US Dollars(1) | 2017 | 2016 | 2015 | ||||||||||||||
| SM Pityana (Chairman) | 312,500 | 59,750 | — | 372,250 | 378 | 411 | |||||||||||
| AH Garner | 123,500 | 43,500 | 33,750 | 200,750 | 200 | 204 | |||||||||||
| MJ Kirkwood | 123,500 | 68,500 | 38,750 | 230,750 | 249 | 242 | |||||||||||
| NP January-Bardill | 123,500 | 56,000 | — | 179,500 | 189 | 189 | |||||||||||
| R Gasant | 123,500 | 58,500 | — | 182,000 | 193 | 195 | |||||||||||
| RJ Ruston | 123,500 | 56,000 | 32,500 | 212,000 | 231 | 226 | |||||||||||
| MDC Richter | 123,500 | 48,500 | 31,250 | 203,250 | 200 | 205 | |||||||||||
| DL Hodgson | 123,500 | 43,500 | — | 167,000 | 176 | 180 | |||||||||||
SV Zilwa(2) | 90,000 | 45,000 | — | 135,000 | — | — | |||||||||||
Retired non-executive officer(3) | 43,500 | 33,500 | — | 77,000 | 256 | 260 | |||||||||||
| Total | 1,310,500 | 512,750 | 136,250 | 1,959,500 | 2,072 | 2,112 | |||||||||||
| Figures in thousands | Figures in thousands | |||||||||||||||||||
| Director fees | Committee fees | Travel allowance | Total | Total | Total | |||||||||||||||
| US Dollars | 2019 | 2020 | 2019 | 2018 | ||||||||||||||||
| M Ramos (Chairperson) | 130,500 | 71,875 | 0 | 202,375 | 107 | 0 | ||||||||||||||
| R Gasant (Lead independent director) | 150,500 | 72,000 | 0 | 222,500 | 193 | 229 | ||||||||||||||
KOF Busia (1) | 63,500 | 28,500 | 11,250 | 103,250 | 0 | 0 | ||||||||||||||
| AM Ferguson | 130,500 | 59,000 | 7,500 | 197,000 | 217 | 52 | ||||||||||||||
| AH Garner | 130,500 | 35,500 | 7,500 | 173,500 | 196 | 200 | ||||||||||||||
NP January-Bardill(2) | 33,500 | 16,625 | 0 | 50,125 | 186 | 198 | ||||||||||||||
NVB Magubane (3) | 130,500 | 40,000 | 0 | 170,500 | 0 | 0 | ||||||||||||||
| MDC Richter | 130,500 | 67,000 | 11,250 | 208,750 | 230 | 235 | ||||||||||||||
RJ Ruston(2) | 33,500 | 13,125 | 10,000 | 56,625 | 218 | 261 | ||||||||||||||
| JE Tilk | 130,500 | 67,875 | 7,500 | 205,875 | 231 | 0 | ||||||||||||||
SM Pityana (Chairman)(4) | 329,000 | 77,250 | 0 | 406,250 | 387 | 441 | ||||||||||||||
| Total fees for 2020 | 1,393,000 | 548,750 | 55,000 | 1,996,750 | 1,965 | 1,616 | ||||||||||||||
(1)Director joined effective 1 August 2020. (2)Directors retired effective 6 May 2020. (3) Director joined effective 1 January 2020. (4) Director resigned effective 7 December 2020. |
Non-Executive Directors do not hold service contracts with the company.Company. Executive Directors do not receive payment of directors'directors’ fees or commitmentcommittee fees.
F - 78
Directors’ and Prescribed Officers’ interests in AngloGold Ashanti shares (continued)
The interests of directors, prescribed officers and their associates in the ordinary shares of the companyCompany at 31 December, which individually did not exceed 1% of the company’sCompany’s issued ordinary share capital, were:
31 December 2020 Beneficial holding | 31 December 2019 Beneficial holding | 31 December 2018 Beneficial holding | ||||||||||||||||||
| Direct | Indirect | Direct | Indirect | Direct | Indirect | |||||||||||||||
| Non-Executive directors | ||||||||||||||||||||
MDC Richter(1) | 9,300 | 0 | 9,300 | 0 | 9,300 | 0 | ||||||||||||||
AH Garner(1) | 17,500 | 0 | 17,500 | 0 | 17,500 | 0 | ||||||||||||||
RJ Ruston(2) | 0 | 1,000 | 0 | 1,000 | 0 | 1,000 | ||||||||||||||
| Total | 26,800 | 1,000 | 26,800 | 1,000 | 26,800 | 1,000 | ||||||||||||||
| Executive directors | ||||||||||||||||||||
KPM Dushnisky (1) | 38,168 | 0 | 131,730 | 0 | 50,000 | 0 | ||||||||||||||
| KC Ramon | 91,949 | 0 | 59,124 | 0 | 51,062 | 0 | ||||||||||||||
| Total | 130,117 | 0 | 190,854 | 0 | 101,062 | 0 | ||||||||||||||
| Company Secretary | ||||||||||||||||||||
| L Marwick | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
| Total | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
| Prescribed officers | ||||||||||||||||||||
SD Bailey(1) | 8,609 | 0 | 1,190 | 0 | 0 | 0 | ||||||||||||||
| PD Chenard | 13,194 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
GJ Ehm(2) | 50,443 | 12,213 | 35,058 | 16,213 | 35,058 | 16,213 | ||||||||||||||
| L Eybers | 28,466 | 0 | 18,164 | 0 | 17,207 | 0 | ||||||||||||||
| I Kramer | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
| S Ntuli | 6,421 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||
| TR Sibisi | 34,359 | 0 | 13,283 | 0 | 9,914 | 0 | ||||||||||||||
| Total | 141,492 | 12,213 | 67,695 | 16,213 | 62,179 | 16,213 | ||||||||||||||
| Grand total | 298,409 | 13,213 | 285,349 | 17,213 | 190,041 | 17,213 | ||||||||||||||
| 31 December 2017 | 31 December 2016 | 31 December 2015 | |||||||||||||||
| Beneficial holding | Beneficial holding | Beneficial holding | |||||||||||||||
| Direct | Indirect | Direct | Indirect | Direct | Indirect | ||||||||||||
| Non-Executive Directors | |||||||||||||||||
| SM Pityana | 2,990 | — | 2,990 | — | 2,000 | — | |||||||||||
MDC Richter(1) | 7,300 | — | 7,300 | — | 7,300 | — | |||||||||||
| DL Hodgson | 1,500 | — | 1,500 | — | 1,500 | — | |||||||||||
MJ Kirkwood(1) | 15,000 | — | 15,000 | — | 15,000 | — | |||||||||||
RJ Ruston(2) | — | 1,000 | — | 1,000 | — | 1,000 | |||||||||||
AH Garner(1) | 7,500 | — | — | — | — | — | |||||||||||
| Retired director | — | — | 3,000 | — | 3,000 | — | |||||||||||
| Total | 34,290 | 1,000 | 29,790 | 1,000 | 28,800 | 1,000 | |||||||||||
| Executive Directors | |||||||||||||||||
| S Venkatakrishnan | 236,468 | — | 213,423 | — | 205,939 | — | |||||||||||
| KC Ramon | 28,265 | — | 12,334 | — | 3,104 | — | |||||||||||
| Total | 264,733 | — | 225,757 | — | 209,043 | — | |||||||||||
| Company Secretary | |||||||||||||||||
| ME Sanz Perez | 13,994 | 16,368 | 7,921 | 12,747 | 10,471 | 8,860 | |||||||||||
| Total | 13,994 | 16,368 | 7,921 | 12,747 | 10,471 | 8,860 | |||||||||||
| Prescribed Officers | |||||||||||||||||
| CE Carter | 50,800 | — | 43,229 | — | 39,560 | — | |||||||||||
GJ Ehm(2) | 30,319 | 16,213 | 33,782 | — | 22,532 | — | |||||||||||
| L Eybers | 4,812 | — | — | — | — | — | |||||||||||
| DC Noko | 41,244 | — | 28,015 | — | 17,086 | — | |||||||||||
| CB Sheppard | 5,344 | — | — | — | — | — | |||||||||||
| TR Sibisi | 4,085 | — | — | — | — | — | |||||||||||
| Retired prescribed officers | — | — | 44,470 | — | 34,298 | 13,204 | |||||||||||
| Total | 136,604 | 16,213 | 149,496 | — | 113,476 | 13,204 | |||||||||||
| Grand total | 449,621 | 33,581 | 412,964 | 13,747 | 361,790 | 23,064 | |||||||||||
(1)Held on the New York stock exchange as American Depositary Shares (ADSs) (1 ADS is equivalent to 1 ordinary share)
(2)Held on the Australian stock exchange as CHESS Depositary Receipts (5 CDIs are equivalent to 1 ordinary share)
A register detailing Directors and Prescribed Officers’ interests in contracts is available for inspection at the company’sCompany’s registered and corporate office.
Subsequent to 31 December 2020 KOF Busia purchased 1,000 ADSs as Direct Beneficial holding.
There are no changes in Director's and Prescribed Officers' interests in AngloGold Ashanti shares, after 31 December 2020 up to the date of this report.
F - 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| US Dollars | ||||||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | |||||||||||||||||
| Capital commitments | ||||||||||||||||||||
| Acquisition of tangible assets | ||||||||||||||||||||
| Contracted for | 120 | 161 | 99 | |||||||||||||||||
| Not contracted for | 367 | 426 | 792 | |||||||||||||||||
Authorised by the directors (1) | 487 | 587 | 891 | |||||||||||||||||
| Allocated to: | ||||||||||||||||||||
| Project capital | ||||||||||||||||||||
| - within one year | 216 | 288 | 446 | |||||||||||||||||
| - thereafter | 71 | 162 | 308 | |||||||||||||||||
| 287 | 450 | 754 | ||||||||||||||||||
| Stay-in-business capital | ||||||||||||||||||||
| - within one year | 200 | 117 | 125 | |||||||||||||||||
| - thereafter | 0 | 20 | 12 | |||||||||||||||||
| 200 | 137 | 137 | ||||||||||||||||||
| Share of underlying capital commitments of joint ventures included above | 12 | 2 | 91 | |||||||||||||||||
Purchase obligations (2) | ||||||||||||||||||||
| Contracted for | ||||||||||||||||||||
| - within one year | 391 | 506 | 305 | |||||||||||||||||
| - thereafter | 882 | 579 | 658 | |||||||||||||||||
| 1,273 | 1,085 | 963 | ||||||||||||||||||
(1) Includes NaN (2019: $59m; 2018: $90m) relating to discontinued operations.
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Operating leases | ||||||||
| At 31 December 2017, the group was committed to making the following payments in respect of operating leases for, amongst others, the hire of plant and equipment and land and buildings. Certain contracts contain renewal options and escalation clauses for various periods of time. | ||||||||
| Expiry: | ||||||||
| - less than one year | 45 | 47 | 34 | |||||
| - between one and three years | 38 | 36 | 69 | |||||
| - between three and five years | 7 | 5 | 10 | |||||
| 90 | 88 | 113 | ||||||
(2) Includes NaN (2019: $8m; 2018: $25m) relating to discontinued operations.
Minimum payments | Present value of payments | Minimum payments | Present value of payments | Minimum payments | Present value of payments | |||||||||||||
| US Dollars million | 2017 | 2016 | 2015 | |||||||||||||||
| Less than one year | 14 | 8 | 12 | 6 | 11 | 5 | ||||||||||||
| Between one and three years | 27 | 18 | 25 | 15 | 22 | 12 | ||||||||||||
| Between three and five years | 24 | 17 | 26 | 18 | 24 | 15 | ||||||||||||
| More than five years | 54 | 35 | 63 | 38 | 76 | 49 | ||||||||||||
| Total minimum lease payments | 119 | 78 | 126 | 77 | 133 | 81 | ||||||||||||
| Amounts representing finance charges | (41 | ) | — | (49 | ) | — | (52 | ) | — | |||||||||
| Present value of minimum lease payments | 78 | 78 | 77 | 77 | 81 | 81 | ||||||||||||
| US Dollars | ||||||||||||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||||||||||||
| Capital commitments | ||||||||||||||||||
| Acquisition of tangible assets | ||||||||||||||||||
| Contracted for | 87 | 58 | 61 | |||||||||||||||
| Not contracted for | 113 | 587 | 856 | |||||||||||||||
| Authorised by the directors | 200 | 645 | 917 | |||||||||||||||
| Allocated to: | ||||||||||||||||||
| Project capital | ||||||||||||||||||
| - within one year | 104 | 252 | 134 | |||||||||||||||
| - thereafter | — | 255 | 402 | |||||||||||||||
| 104 | 507 | 536 | ||||||||||||||||
| Stay-in-business capital | ||||||||||||||||||
| - within one year | 84 | 135 | 249 | |||||||||||||||
| - thereafter | 12 | 3 | 132 | |||||||||||||||
| 96 | 138 | 381 | ||||||||||||||||
| Share of underlying capital commitments of joint ventures included above | 21 | 138 | 27 | |||||||||||||||
| Purchase obligations | ||||||||||||||||||
| Contracted for | ||||||||||||||||||
| - within one year | 274 | 605 | 529 | |||||||||||||||
| - thereafter | 424 | 269 | 88 | |||||||||||||||
| 698 | 874 | 617 | ||||||||||||||||
Purchase obligations
Purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies, consumables, inventories, explosives and activated carbon.
To service these capital commitments, purchase obligations and other operational requirements, the group is dependent on existing cash resources, cash generated from operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject to foreign investment, exchange control laws and regulations, and the quantity of foreign exchange available in offshore countries. In addition, distributions from joint ventures are subject to the relevant board approval.
The credit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent that external borrowings are required, the group’s covenant performance indicates that existing financing facilities will be available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future, the group believes that sufficient measures are in place to ensure that these facilities can be refinanced.
Contingencies
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Contingent liabilities | |||||||||||||||||
Litigation - Ghana(1)(2) | 97 | 97 | 97 | ||||||||||||||
| 97 | 97 | 97 | |||||||||||||||
F - 80
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Contingent liabilities | ||||||||
Litigation - Ghana(1)(2) | 97 | 97 | 97 | |||||
Litigation - North America (3) | — | — | — | |||||
Tax disputes - Brazil (4) | 24 | 15 | 11 | |||||
Tax dispute - AngloGold Ashanti Colombia S.A.(5) | 150 | 141 | 128 | |||||
Tax dispute - Cerro Vanguardia S.A.(6) | 27 | 29 | 32 | |||||
Groundwater pollution(7) | — | — | — | |||||
Deep groundwater pollution - Africa(8) | — | — | — | |||||
| 298 | 282 | 268 | ||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Litigation claims
(1)Litigation - On 11 October 2011, AngloGold Ashanti (Ghana) Limited (AGAG) terminated Mining and Building Contractors Limited’s (MBC) underground development agreement, construction on bulkheads agreement and diamond drilling agreement at Obuasi mine. The parties reached agreement on the terms of the separation and concluded a separation agreement on 8 November 2012. On 20 February 2014, AGAG was served with a demand issued by MBC claiming a total of $97m. In December 2015, the proceedings were stayed in the High Court pending arbitration. In February 2016, MBC submitted the matter to arbitration. The arbitration panel was constituted and on 26 July 2019 held an arbitration management meeting to address initial procedural matters. On 1 May 2020, the Ghana Arbitration Centre notified the parties that the Tribunal has granted the Claimant’s request to adjourn the proceedings indefinitely to enable the parties to explore possible settlement.
(2)Litigation - AGAG received a summons on 2 April 2013 from Abdul Waliyu and 152 others in which the plaintiffs allege that they were or are residents of the Obuasi municipality or its suburbs and that their health has been adversely affected by emission and/or other environmental impacts arising in connection with the current and/or historical operations of the Pompora Treatment Plant (PTP), which was decommissioned in 2000. The plaintiffs’ alleged injuries include respiratory infections, skin diseases and certain cancers. The plaintiffs subsequently did not timely file their application for directions. On 24 February 2014, executive members of the PTP (AGAG) Smoke Effect Association (PASEA), sued AGAG by themselves and on behalf of their members (undisclosed number) on grounds similar to those discussed above, as well as economic hardships as a result of constant failure of their crops. This matter has been adjourned indefinitely. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for AGAG’s obligation in either matter.
Tax claims
Other
(3)Groundwater pollution - AngloGold Ashanti had previously identified groundwater contamination plumes at certain of its South African operations, which have occurred primarily as a result of seepage from mine residue stockpiles. Numerous scientific, technical and legal studies were undertaken to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The group instituted processes to reduce future potential seepage and it was demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvements in some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggested, but have not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination. Upon completion of the sale of the remaining South African producing assets to Harmony Gold Company Limited (Harmony Gold) effective 30 September 2020, Harmony Gold became liable for the obligation.
(4)Deep groundwater pollution - The group had previously identified potential water ingress and future pollution risk posed by deep groundwater in certain underground mines in Africa. Various studies have been undertaken by AngloGold Ashanti since 1999 to understand this potential risk. In South Africa, due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the South African Mineral and Petroleum Resources Development Act, No. 28 of 2002, as amended (MPRDA) requires that the affected mining companies develop a Regional Mine Closure Strategy to be approved by the Department of Mineral Resources and Energy. Upon completion of the sale of the remaining South African producing assets to Harmony Gold effective 30 September 2020, Harmony Gold became liable for the obligation of deep groundwater pollution pertaining to the South African assets. In view of current information, the group has concluded that the risk with regards to deep groundwater pollution with respect to other underground mine operations in Africa is considered to be remote.
F - 81
In the normal course of its operations, the group is exposed to gold price, other commodity price, foreign exchange, interest rate, liquidity, equity price (deemed to be immaterial) and credit risks. In order to manage these risks, the group may enter into transactions which make use of both on- and off-balance sheet derivatives. The group does not acquire, hold or issue derivatives for speculative purposes. The group has developed a comprehensive risk management process to facilitate, control and monitor these risks. The board has approved and monitors this risk management process, inclusive of documented treasury policies, counterparty limits and controlling and reporting structures.
Managing risk in the group
Risk management activities within the group are the ultimate responsibility of the board of directors. The Chief Financial Officer is responsible to the board of directors for the design, implementation and monitoring of the risk management plan. The Audit and Risk Committee is responsible for overseeing risk management plans and systems, as well as financial risks which include a review of treasury activities and the group’s counterparties.
The financial risk management objectives of the group are defined as follows:
•safeguarding the group’s core earnings stream from its major assets through the effective control and management of gold price risk, other commodity risk, foreign exchange risk and interest rate risk;
•effective and efficient usage of credit facilities in both the short and long-term through the adoption of reliable liquidity management planning and procedures;
•ensuring that investment and hedging transactions are undertaken with creditworthy counterparties; and
•ensuring that all contracts and agreements related to risk management activities are co-ordinated, consistent throughout the group and that they comply where necessary with all relevant regulatory and statutory requirements.
Gold price and foreign exchange risk
Gold price risk arises from the risk of an adverse effect on current or future earnings resulting from fluctuations in the price of gold. The group has transactional foreign exchange exposures, which arise from sales or purchases by an operating unit in currencies other than the unit’sunit's functional currency. The gold market is predominately priced in US dollars which exposes the group to the risk thatof fluctuations in the SA rand/US dollar, Brazilian real/US dollar, Argentinean peso/US dollar and Australian dollar/US dollar exchange rates may also have an adverse effect on current or future earnings. The group is also exposed to certain by-product commodity price risk.rates.
Net open hedge position as at 31 December 2020
The group had no outstanding commitments against future production potentially settled in cash.
Interest rate and liquidity risk
The group manages liquidity risk by ensuring that there is sufficient committed borrowing and banking facilities after taking into consideration the actual and forecast cash flows, in order to meet the group's short, medium and long term funding and liquidity management requirements.
In the ordinary course of business, the group receives cash from the proceeds of its gold sales and is required to fund its working capital and capital expenditure requirements. This cash is managed to ensure surplus funds are invested in a manner to achieve market-related returns whilst minimising risks. The group is able to actively source financing at competitive rates. The counterpartiescounter parties are financial and banking institutions and their credit ratings are regularly monitored.
The group has sufficient undrawn borrowing facilities available to fund its working capital and capital requirements (notes 2526 and 35)36).
F - 82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
The following are the contractual maturities of financial liabilities, including interest payments:
Financial liabilities
| Within one year | Between one and two years | Between two and five years | After five years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Trade and other payables | 627 | 8 | 0 | 0 | 635 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 205 | 901 | 137 | 1,414 | 2,657 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - In USD | 158 | 5.0 | 901 | 5.0 | 137 | 4.6 | 1,414 | 4.6 | 2,610 | |||||||||||||||||||||||||||||||||||||||||||||||
| - TZS in USD equivalent | 47 | 12.5 | 0 | 0 | 0 | 0 | 0 | 0 | 47 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trade and other payables | 586 | 15 | 0 | 0 | 601 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 802 | 185 | 1,012 | 602 | 2,601 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - In USD | 790 | 5.8 | 132 | 6.0 | 913 | 6.1 | 602 | 6.5 | 2,437 | |||||||||||||||||||||||||||||||||||||||||||||||
| - AUD in USD equivalent | 0 | 2.3 | 0 | 2.3 | 22 | 2.3 | 0 | 0 | 22 | |||||||||||||||||||||||||||||||||||||||||||||||
| - TZS in USD equivalent | 6 | 12.5 | 47 | 12.5 | 0 | 0 | 0 | 0 | 53 | |||||||||||||||||||||||||||||||||||||||||||||||
| - ZAR in USD equivalent | 6 | 8.1 | 6 | 8.1 | 77 | 8.1 | 0 | 0 | 89 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trade and other payables | 562 | 0 | 0 | 0 | 562 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Gold and oil derivative contracts | 9 | 0 | 0 | 0 | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Borrowings | 133 | 836 | 1,120 | 663 | 2,752 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - In USD | 112 | 5.8 | 790 | 5.8 | 1,025 | 6.0 | 622 | 6.5 | 2,549 | |||||||||||||||||||||||||||||||||||||||||||||||
| - AUD in USD equivalent | 7 | 6.8 | 7 | 6.8 | 23 | 6.8 | 26 | 6.8 | 63 | |||||||||||||||||||||||||||||||||||||||||||||||
| - TZS in USD equivalent | 5 | 12.5 | 3 | 12.5 | 29 | 12.5 | 0 | 0 | 37 | |||||||||||||||||||||||||||||||||||||||||||||||
| - ZAR in USD equivalent | 9 | 9.0 | 36 | 9.0 | 43 | 9.7 | 15 | 14.7 | 103 | |||||||||||||||||||||||||||||||||||||||||||||||
| Within one year | Between one and two years | Between two and five years | After five years | Total | |||||||||||||||||||
| 2017 | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | ||||||||||||||
| Trade and other payables | 615 | — | — | — | 615 | ||||||||||||||||||
| Borrowings | 137 | 343 | 1,912 | 695 | 3,087 | ||||||||||||||||||
| - In USD | 98 | 5.4 | 145 | 5.4 | 1,643 | 5.5 | 641 | 6.5 | 2,527 | ||||||||||||||
| - AUD in USD equivalent | 16 | 5.1 | 174 | 5.1 | 25 | 6.8 | 38 | 6.8 | 253 | ||||||||||||||
| - ZAR in USD equivalent | 23 | 8.9 | 24 | 8.9 | 244 | 9.1 | 16 | 15.5 | 307 | ||||||||||||||
| 2016 | |||||||||||||||||||||||
| Trade and other payables | 596 | — | — | — | 596 | ||||||||||||||||||
| Borrowings | 127 | 287 | 1,155 | 1,513 | 3,082 | ||||||||||||||||||
| - In USD | 100 | 5.4 | 100 | 5.4 | 1,023 | 5.5 | 1,449 | 5.5 | 2,672 | ||||||||||||||
| - AUD in USD equivalent | 16 | 5.4 | 89 | 5.3 | 119 | 6.0 | 43 | 6.8 | 267 | ||||||||||||||
| - ZAR in USD equivalent | 11 | 8.9 | 98 | 8.9 | 13 | 11.2 | 21 | 14.0 | 143 | ||||||||||||||
| 2015 | |||||||||||||||||||||||
| Trade and other payables | 503 | — | — | — | 503 | ||||||||||||||||||
| Borrowings | 211 | 216 | 1,912 | 1,581 | 3,920 | ||||||||||||||||||
| - In USD | 140 | 5.8 | 140 | 5.8 | 1,767 | 5.9 | 1,507 | 5.5 | 3,554 | ||||||||||||||
| - AUD in USD equivalent | 11 | 5.2 | 68 | 5.2 | 66 | 6.2 | 51 | 6.8 | 196 | ||||||||||||||
| - ZAR in USD equivalent | 60 | 8.2 | 8 | 8.1 | 79 | 8.7 | 23 | 11.8 | 170 | ||||||||||||||
The table below provides a breakdown of the contractual maturities including interest payments of the lease liabilities.
| Within one year | Between one and two years | Between two and five years | After five years | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | Effective rate % | $ millions | |||||||||||||||||||||||||||||||||||||||||||||||
| Lease liabilities | 42 | 31 | 68 | 19 | 160 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - In USD | 10 | 6.1 | 4 | 6.1 | 6 | 6.1 | 0 | 0 | 20 | |||||||||||||||||||||||||||||||||||||||||||||||
| - AUD in USD equivalent | 22 | 4.7 | 21 | 4.7 | 58 | 4.7 | 19 | 4.7 | 120 | |||||||||||||||||||||||||||||||||||||||||||||||
| - BRL in USD equivalent | 7 | 8.4 | 5 | 8.4 | 4 | 8.4 | 0 | 0 | 16 | |||||||||||||||||||||||||||||||||||||||||||||||
| - ZAR in USD equivalent | 3 | 9.8 | 1 | 9.8 | 0 | 0 | 0 | 0 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease liabilities | 51 | 33 | 54 | 56 | 194 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| - In USD | 22 | 7.0 | 4 | 7.0 | 8 | 7.0 | 1 | 7.0 | 35 | |||||||||||||||||||||||||||||||||||||||||||||||
| - AUD in USD equivalent | 22 | 3.5 | 22 | 3.5 | 42 | 3.5 | 55 | 3.5 | 141 | |||||||||||||||||||||||||||||||||||||||||||||||
| - BRL in USD equivalent | 3 | 6.8 | 3 | 6.8 | 3 | 6.8 | 0 | 0 | 9 | |||||||||||||||||||||||||||||||||||||||||||||||
| - ZAR in USD equivalent | 4 | 9.8 | 4 | 9.8 | 1 | 9.8 | 0 | 0 | 9 | |||||||||||||||||||||||||||||||||||||||||||||||
Credit risk
Credit risk arises from the risk that a counterparty may default or not meet its obligations timeously. The group minimises credit risk by ensuring that credit risk is spread over a number of counterparties. These counterparties are financial and banking institutions. Counterparty credit limits and exposures are reviewed by the Audit and Risk Committee. Where possible, management ensures that netting agreements are in place. No set-off is applied to the statement of financial position due to the different maturity profiles of assets and liabilities.
F - 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
35FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
The combined maximum credit risk exposure of the group is as follows:
| US Dollars | ||||||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | |||||||||||||||||
Other investments (1) | 2 | 67 | 59 | |||||||||||||||||
| Trade and other receivables | 95 | 57 | 41 | |||||||||||||||||
| Cash restricted for use (note 23) | 73 | 64 | 66 | |||||||||||||||||
| Cash and cash equivalents (note 24) | 1,330 | 456 | 329 | |||||||||||||||||
| Total financial assets | 1,500 | 644 | 495 | |||||||||||||||||
| US Dollars | |||||||||
| Figures in millions | 2017 | 2016 | 2015 | ||||||
| Other investments | 58 | 79 | 61 | ||||||
| Trade and other receivables | 33 | 46 | 42 | ||||||
| Cash restricted for use (note 21) | 65 | 55 | 60 | ||||||
| Cash and cash equivalents (note 22) | 205 | 215 | 484 | ||||||
| Total financial assets | 361 | 395 | 647 | ||||||
Trade and other receivables, that are past due but not impaired totalled $20m (2016: $9m; 2015: $7m)$12m (2019: $15m; 2018: $6m). Other receivables that are impaired totalled nil (2016: nil; 2015: $6m) and other investments that are impaired totalled $3m (2016: nil; 2015: nil)NaN (2019: $1m; 2018: NaN).
Trade receivables mainly comprise banking institutions purchasing gold bullion. Normalbullion and normal market settlement terms are two working days.days, therefore expected credit losses are not expected to be material.
The group does not generally obtain collateral or other security to support financial instruments subject to credit risk, but monitors the credit standing of counterparties.
Fair value of financial instruments
The estimated fair values of financial instruments are determined at discrete points in time based on relevant market information.
The estimated fair value of the group’s other investments and borrowings as at 31 December are as follows:
Type of instrument
| Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||||||||||||||||||||||||
| US Dollar millions | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||||
| Financial assets | ||||||||||||||||||||||||||||||||||||||
Other investments (1) | 188 | 188 | 170 | 170 | 147 | 147 | ||||||||||||||||||||||||||||||||
| Financial liabilities | ||||||||||||||||||||||||||||||||||||||
| Borrowings (note 26) | 1,931 | 2,131 | 2,033 | 2,135 | 2,050 | 2,084 | ||||||||||||||||||||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | Carrying amount | Fair value | |||||||||||||
| US Dollar millions | 2017 | 2016 | 2015 | |||||||||||||||
| Financial assets | ||||||||||||||||||
| Other investments (note 18) | 138 | 140 | 130 | 132 | 92 | 93 | ||||||||||||
| Financial liabilities | ||||||||||||||||||
| Borrowings (note 25) | 2,268 | 2,377 | 2,178 | 2,203 | 2,737 | 2,425 | ||||||||||||
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash restricted for use, cash and cash equivalents, trade, other receivables and other receivablesassets and trade and other payables
The carrying amounts approximate fair value due to their short term nature.nature, except for the deferred compensation asset which is carried at fair value in level 3 of the fair value hierarchy.
Investments and other non-current assets
Listed equity investments classified as available-for-saleFVTOCI and FVTPL are carried at fair value in level 1 of the fair value hierarchy while fixed income investments and other non-current assets are carried at amortised cost. The fair value of fixed income investments has been calculated using market interest rates at the hierarchy level 2. The unlisted equity investments are carried at cost or fair value.hierarchy.
Borrowings
The rated bonds are carried at amortised cost and their fair values are their closing market values at the reporting date (fair value hierarchy - level 1). The interest rate on the remaining borrowings is resetset on a short-term floating rate basis, and accordingly the carrying amount is considered to approximate fair value.
Fair value hierarchy
The group uses the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
F - 84
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
35FINANCIAL RISK MANAGEMENT ACTIVITIES (continued)
The following table sets out the group’s financial assets measured at fair value by level within the fair value hierarchy as at 31 December:
Type of instrument
Assets measured at fair value on a recurring basis
| US Dollar millions | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
| 2020 | ||||||||||||||||||||||||||
| Equity securities - FVTOCI | 186 | 0 | 0 | 186 | ||||||||||||||||||||||
| Deferred compensation asset | 0 | 0 | 28 | 28 | ||||||||||||||||||||||
| 2019 | ||||||||||||||||||||||||||
| Equity securities - FVTPL | 21 | 0 | 0 | 21 | ||||||||||||||||||||||
| Equity securities - FVTOCI | 82 | 0 | 0 | 82 | ||||||||||||||||||||||
| 2018 | ||||||||||||||||||||||||||
| Equity securities - FVTPL | 19 | 0 | 0 | 19 | ||||||||||||||||||||||
| Equity securities - FVTOCI | 69 | 0 | 0 | 69 | ||||||||||||||||||||||
Level 3 financial assets
On 12 February 2020, AngloGold Ashanti announced that it had reached an agreement to sell its remaining South African producing assets and related liabilities to Harmony Gold Mining Company Limited ("Harmony"). The transaction closed on 30 September 2020, with Harmony taking effective control of these producing assets and related liabilities on 1 October 2020. Consideration for the transaction is in cash and deferred payments, subject to subsequent performance, and with additional proceeds if the West Wits assets are developed below current infrastructure.
The two components of the deferred compensation assets are calculated as follows:
a.$260 per ounce payable on all underground production sourced within the West Wits mineral rights (comprising the Mponeng, Savuka and TauTona mines) in excess of 250,000 ounces per annum for 6 years commencing 1 January 2021. Using a probability weighted calculation of unobservable market data and estimated with reference to expected underlying discounted cash flows a deferred compensation asset of $28m is recognised in the statement of financial position as at 31 December 2020. If the weighted number of ounces used in the weighted probability calculation increases with 10% over the period calculated, the asset value would increase by approximately $3m and if the weighted number of ounces used in the weighted probability calculation decreases by 10% over the period calculated the value of the asset would decrease by approximately $3m. The sensitivity on the weighted number of ounces included within the weighted probability calculation has been based on the range of possible outcomes expected from Harmony’s mining plans, which could differ from the actual mining plans followed by Harmony.
b. $20 per ounce payable on underground production sourced within the West Wits mineral rights (comprising the Mponeng, Savuka and TauTona mines) below the datum of current infrastructure. At transaction date this constituted 8.53 million ounces of reserves. The consideration is dependent on Harmony developing below infrastructure. The performance of this obligation is outside the influence of AngloGold Ashanti as it depends on Harmony’s future investment decisions. Under the conditions prevailing as at 31 December 2020, no portion of deferred compensation below infrastructure has been included in the loss on disposal of assets of discontinued operations.
Level 2 financial liabilities
The fair values of the gold and oil derivative contracts are determined by using the applicable valuation models for each instrument type with the key inputs being forward prices, the number of outstanding ounces or barrels on open contracts and volatilities.
Gold
In January 2020, AngloGold Ashanti entered into Asian style zero-cost collars for a total of 130,900 ounces of Argentina’s annual gold production for the period February 2020 to December 2020. The strike prices are $1,500 per ounce on the floor and an average price of $1,701.34 per ounce on the cap. At 31 December 2020 the group had no commitments against future production potentially settled in cash.
At 31 December 2020, a realised loss of $14m was incurred.
F - 85
| US Dollar millions | Level 1 | Level 2 | Level 3 | Total | ||||||||
| 2017 | ||||||||||||
| Available-for-sale financial assets | ||||||||||||
| Equity securities | 80 | — | — | 80 | ||||||||
| Available-for-sale financial assets | 2016 | |||||||||||
| Equity securities | 51 | — | — | 51 | ||||||||
| 2015 | ||||||||||||
| Available-for-sale financial assets | ||||||||||||
| Equity securities | 30 | — | — | 30 | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Oil
In February 2020, AngloGold Ashanti entered into Asian style zero-cost collars for a total of approximately 342,000 barrels of Brent crude oil for the period February 2020 to December 2020. The average strike prices are $45 per barrel on the floor and an average price of $65 per barrel on the cap.
In February 2020, AngloGold Ashanti entered into Asian style zero-cost collars for a total of approximately 622,000 barrels of Brent crude oil for the period March 2020 to December 2020. The average strike prices are$44.50 per barrel on the floor and an average price of $65 per barrel on the cap. At 31 December 2020 the group had no commitments potentially settled in cash.
At 31 December 2020, a realised loss of $5m was incurred.
Environmental obligations
Pursuant to environmental regulations in the countries in which we operate, in connection with planning for end-of-life of our mines, we are obligated to close our operations and rehabilitate the lands which we mine in accordance with these regulations. As a consequence,where such mines are located. In most cases, AngloGold Ashanti is required in some circumstances to provide either reclamationsfinancial guarantees for such work, including reclamation bonds or letters of credit issued by third party entities, establish independent trust funds or provide guarantees issuedcash reserves maintained by the operation, to the respective environmental protection agency, or such other government department with responsibility for environmental oversight in the respective country, to cover the potentialestimated environmental rehabilitation obligation in specified amounts.obligations.
In most cases, the environmental obligations will expire on completion of the rehabilitation although, in some cases, we aremay be required to potentially post bonds for potential events unknownor conditions that maycould arise after the rehabilitation has been completed.
F - 86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Sensitivity analysis
Interest rate risk on other financial assets and liabilities (excluding derivatives)
The group also monitors interest rate risk on other financial assets and liabilities.
The following table shows the approximate interest rate sensitivities of other financial assets and liabilities at 31 December (actual changes in the timing and amount of the following variables may differ from the assumed changes below). As the sensitivity is the same (linear) for both increases and decreases in interest rates only absolute numbers are presented.
| Change in interest rate basis points | Change in interest amount in currency millions | Change in interest amount US dollar millions | ||||||||||||||||||
| 2020 | ||||||||||||||||||||
| Financial assets | ||||||||||||||||||||
| USD denominated | 100 | 6 | 6 | |||||||||||||||||
| AUD denominated | 150 | 1 | 1 | |||||||||||||||||
| ARS denominated | 250 | 121 | 1 | |||||||||||||||||
| Financial liabilities | ||||||||||||||||||||
| TZS denominated | 250 | 2,730 | 1 | |||||||||||||||||
| USD denominated | 100 | 1 | 1 | |||||||||||||||||
Change in interest rate basis points | Change in interest amount in currency millions | Change in interest amount US dollar millions | |||||||
| 2017 | |||||||||
| Financial assets | |||||||||
| USD denominated | 100 | 1 | 1 | ||||||
ZAR denominated(1) | 150 | 2 | — | ||||||
| Financial liabilities | |||||||||
ZAR denominated(1) | 150 | 41 | 3 | ||||||
| AUD denominated | 100 | 3 | 2 | ||||||
| Change in interest rate basis points | Change in interest amount in currency millions | Change in interest amount US dollar millions | ||||||||||||||||||
| 2019 | ||||||||||||||||||||
| Financial assets | ||||||||||||||||||||
| USD denominated | 100 | 1 | 1 | |||||||||||||||||
| AUD denominated | 150 | 1 | 1 | |||||||||||||||||
| BRL denominated | 0 | 0 | 0 | |||||||||||||||||
| Financial liabilities | ||||||||||||||||||||
| TZS denominated | 250 | 2,704 | 1 | |||||||||||||||||
ZAR denominated(2) | 150 | 15 | 1 | |||||||||||||||||
| USD denominated | 100 | 1 | 1 | |||||||||||||||||
Change in interest rate basis points | Change in interest amount in currency millions | Change in interest amount US dollar millions | |||||||
| 2016 | |||||||||
| Financial liabilities | |||||||||
ZAR denominated(1) | 150 | 18 | 1 | ||||||
| AUD denominated | 100 | 2 | 1 | ||||||
| USD denominated | 100 | 1 | 1 | ||||||
| Change in interest rate basis points | Change in interest amount in currency millions | Change in interest amount US dollar millions | ||||||||||||||||||
| 2018 | ||||||||||||||||||||
| Financial assets | ||||||||||||||||||||
| USD denominated | 100 | 1 | 1 | |||||||||||||||||
ZAR denominated(1)(2) | 150 | 1 | 1 | |||||||||||||||||
| BRL denominated | 250 | 2 | 1 | |||||||||||||||||
| Financial liabilities | ||||||||||||||||||||
| TZS denominated | 250 | 1,680 | 1 | |||||||||||||||||
ZAR denominated(2) | 150 | 14 | 1 | |||||||||||||||||
| AUD denominated | 100 | 1 | 1 | |||||||||||||||||
(1)A change of 100 basis points in financial assets results in less than a $1m change in the interest amount.
Change in interest rate basis points | Change in interest amount in currency millions | Change in interest amount US dollar millions | |||||||
| 2015 | |||||||||
| Financial assets | |||||||||
| USD denominated | 100 | 2 | 2 | ||||||
ZAR denominated(1) | 150 | 5 | — | ||||||
| BRL denominated | 250 | 2 | 1 | ||||||
| Financial liabilities | |||||||||
ZAR denominated(1) | 150 | 26 | 2 | ||||||
| AUD denominated | 100 | 1 | 1 | ||||||
| USD denominated | 100 | 2 | 2 | ||||||
F - 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Foreign exchange risk
Foreign exchange risk arises on financial instruments that are denominated in a foreign currency.
The following table discloses the approximate foreign exchange risk sensitivities of borrowings at 31 December (actual changes in the timing and amount of the following variables may differ from the assumed changes below).
| Change in exchange rate | Change in borrowings total | Change in exchange rate | Change in borrowings total | Change in exchange rate | Change in borrowings total | |||||||||||||||||||||||||||||||||
| US$ Million | US$ Million | US$ Million | ||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||||||
| Borrowings | ||||||||||||||||||||||||||||||||||||||
| ZAR denominated (R/$) | Spot (+R1.50) | 0 | Spot (+R1.50) | (7) | Spot (+R1.50) | (7) | ||||||||||||||||||||||||||||||||
| TZS denominated (TZS/$) | Spot (+TZS250) | (5) | Spot (+TZS250) | (5) | Spot (+TZS250) | (3) | ||||||||||||||||||||||||||||||||
| AUD denominated (AUD/$) | Spot (+AUD0.1) | 0 | Spot (+AUD0.1) | (1) | Spot (+AUD0.1) | (3) | ||||||||||||||||||||||||||||||||
| ZAR denominated (R/$) | Spot (R(1.5)) | 0 | Spot (R(1.5)) | 9 | Spot (R(1.50)) | 9 | ||||||||||||||||||||||||||||||||
| TZS denominated (TZS/$) | Spot (TZS(250)) | 6 | Spot (TZS(250)) | 6 | Spot (-TZS(250)) | 4 | ||||||||||||||||||||||||||||||||
| AUD denominated (AUD/$) | Spot (AUD(0.1)) | 0 | Spot (AUD(0.1)) | 1 | Spot (AUD(0.1)) | 4 | ||||||||||||||||||||||||||||||||
| Change in exchange rate | Change in borrowings total | Change in exchange rate | Change in borrowings total | Change in exchange rate | Change in borrowings total | ||||||||||
| US$ Million | US$ Million | US$ Million | |||||||||||||
| 2017 | 2016 | 2015 | |||||||||||||
| Borrowings | |||||||||||||||
| ZAR denominated (R/$) | Spot (+R1.50) | (26 | ) | Spot (+R1.50) | (10 | ) | Spot (+R1.50) | (12 | ) | ||||||
| AUD denominated (AUD/$) | Spot (+AUD0.1) | (16 | ) | Spot (+AUD0.1) | (15 | ) | Spot (+AUD0.1) | (11 | ) | ||||||
| ZAR denominated (R/$) | Spot (-R1.50) | 33 | Spot (-R1.50) | 13 | Spot (-R1.50) | 14 | |||||||||
| AUD denominated (AUD/$) | Spot (-AUD0.1) | 19 | Spot (-AUD0.1) | 18 | Spot (-AUD0.1) | 12 | |||||||||
The borrowings total in the denominated currency will not be influenced by a movement in its exchange rate.
F - 88
36 CAPITAL MANAGEMENT
The primary objective of managing the group's capital is to ensure that there is sufficient capital available to support the funding requirements of the group, including capital expenditure, in a way that optimises the cost of capital, maximises shareholders' returns and ensures that the group remains in a sound financial position.
The capital structure of the group consists of net debt (borrowings as detailed in note 25,26, offset by cash and bank balances detailed in note 22)24) and equity of the group (comprising share capital and premium and accumulated reserves and non-controlling interests).
The group manages and makes adjustments to the capital structure as opportunities arise in the market place, as and when borrowings mature, or as and when funding is required. This may take the form of raising equity, market or bank debt or hybrids thereof.
The group manages capital using various financial metrics including the ratio of Adjusted net debt to Adjusted EBITDA (gearing). Both the calculation of Adjusted net debt and Adjusted EBITDA are based on the formula included in the Revolving Credit Agreements. The loan covenant ratio of Adjusted net debt to Adjusted EBITDA should not exceed 3.5 times. The facility also makes provision for the ability of the group to have a leverage ratio of greater than 3.5 times but less than 4.5 times, subject to certain conditions, for one measurement period not exceeding six months, during the tenor of the facility.
The group had no major issuance of equity during the year.
A full analysis of the borrowings as presented on the statement of financial position in included in note 25. In26. In addition, during April 2020 the following details$700m rated bonds entered into during April 2010 were fully repaid and cancelled. During the second half of 2020 the Company concluded a 10-year $700m bond offering, priced at 3.75% per annum. The bonds were issued on 1 October 2020 with semi-annual coupons payable in April and October each year and the bonds are also relevant to the borrowings at 31 December 2017:repayable on 1 October 2030.
The $750m, $700m$300m and $300mthe new $700m rated bonds are fully and unconditionally guaranteed by the group;group.
The interest margin on the five-yearfive-year unsecured multi-currency syndicated revolving credit facility of A$500m ($390m)$1.4bn with a group of banks will reduce should the group’s credit rating improve from its current BB+/Baa3 status and should increase if its credit rating worsens. ThisThe A$500m portion of this facility will be used to fund the working capital and development costs associated with the group's mining operations within Australia without eroding the group's headroom under its other facilities and exposing the group to foreign exchange gains/losses each quarter.
Amounts are converted to US dollars at year end exchange rates.
F - 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Gearing ratio (Net(Adjusted Net debt to Adjusted EBITDA)
| US Dollars | |||||||||||||||||
| Figures in millions | 2020 | 2019 | 2018 | ||||||||||||||
| Adjusted net debt from continuing operations | |||||||||||||||||
| Borrowings - non-current portion (note 26) | 1,789 | 1,299 | 1,911 | ||||||||||||||
| Lease liabilities - non-current portion (note 16) | 116 | 126 | |||||||||||||||
| Borrowings - current portion (note 26) | 142 | 734 | 139 | ||||||||||||||
| Lease liabilities - current portion (note 16) | 37 | 45 | 0 | ||||||||||||||
| Total borrowings | 2,084 | 2,204 | 2,050 | ||||||||||||||
| Less: cash and cash equivalents (note 24) | (1,330) | (456) | (329) | ||||||||||||||
| Net debt | 754 | 1,748 | 1,721 | ||||||||||||||
| Adjustments: | |||||||||||||||||
| IFRS16 lease adjustments | (106) | (119) | 0 | ||||||||||||||
| Corporate office lease | 0 | 0 | (9) | ||||||||||||||
| Unamortised portion of borrowing costs | 23 | 16 | 13 | ||||||||||||||
| Cash restricted for use (note 23) | (73) | (64) | (66) | ||||||||||||||
| Adjusted net debt | 597 | 1,581 | 1,659 | ||||||||||||||
| The Adjusted EBITDA calculation included in this note is based on the formula included in the Revolving Credit Agreements for compliance with the debt covenant formula. | |||||||||||||||||
| Adjusted EBITDA from continuing operations | |||||||||||||||||
| Profit (loss) before taxation | 1,589 | 619 | 445 | ||||||||||||||
| Add back: | |||||||||||||||||
| Finance costs and unwinding of obligations (note 7) | 177 | 172 | 168 | ||||||||||||||
| Interest income | (27) | (14) | (8) | ||||||||||||||
| Amortisation of tangible, intangible and right of use assets (note 4) | 570 | 583 | 558 | ||||||||||||||
| Other amortisation | 6 | 6 | 11 | ||||||||||||||
| Associates and joint ventures’ adjustments for amortisation, interest, taxation and other | 168 | 149 | 158 | ||||||||||||||
| EBITDA | 2,483 | 1,515 | 1,332 | ||||||||||||||
| Adjustments: | |||||||||||||||||
| Foreign exchange and other (gains) losses | 0 | 12 | 9 | ||||||||||||||
| Dividend income | (2) | 0 | (2) | ||||||||||||||
| Retrenchment and related costs | 2 | 7 | 4 | ||||||||||||||
| Care and maintenance costs (note 6) | 0 | 47 | 39 | ||||||||||||||
| Impairment, derecognition of assets and (profit) loss on disposal | 1 | 6 | 7 | ||||||||||||||
| Profit on disposal of joint ventures | (19) | 0 | 0 | ||||||||||||||
| Loss (gain) on non-hedge derivatives and other commodity contracts | 5 | (5) | 2 | ||||||||||||||
| Associates and joint ventures’ share of costs | 0 | (2) | (3) | ||||||||||||||
| Adjusted EBITDA (as defined in the Revolving Credit Agreements) | 2,470 | 1,580 | 1,388 | ||||||||||||||
| Gearing ratio (Adjusted net debt to Adjusted EBITDA) | 0.24:1 | 1.00:1 | 1.20:1 | ||||||||||||||
| Maximum debt covenant ratio allowed per agreement | 3.5:1 | 3.5:1 | 3.5:1 | ||||||||||||||
F - 90
| US Dollars | ||||||||
| Figures in millions | 2017 | 2016 | 2015 | |||||
| Borrowings (note 25) | 2,268 | 2,178 | 2,737 | |||||
| Corporate office lease (note 25) | (15 | ) | (15 | ) | (15 | ) | ||
| Unamortised portion of the convertible and rated bonds | 18 | 23 | 21 | |||||
| Cumulative fair value adjustment on $1.25bn bonds | — | — | (9 | ) | ||||
| Cash restricted for use (note 21) | (65 | ) | (55 | ) | (60 | ) | ||
| Cash and cash equivalents (note 22) | (205 | ) | (215 | ) | (484 | ) | ||
| Net debt | 2,001 | 1,916 | 2,190 | |||||
| The Adjusted EBITDA calculation included in this note is based on the formula included in the Revolving Credit Facility Agreements for compliance with the debt covenant formula. | ||||||||
| Adjusted EBITDA | ||||||||
| Profit (loss) before taxation | (63 | ) | 269 | 257 | ||||
| Add back: | ||||||||
| Finance costs and unwinding of obligations (note 7) | 169 | 180 | 245 | |||||
| Interest received (note 3) | (15 | ) | (22 | ) | (28 | ) | ||
| Amortisation of tangible and intangible assets (note 4) | 823 | 809 | 777 | |||||
| Adjustments: | ||||||||
| Exchange loss | 11 | 88 | 17 | |||||
| Fair value adjustment on issued bonds | — | (9 | ) | (66 | ) | |||
| Impairment and derecognition of assets | 297 | 3 | 14 | |||||
| Impairment of other investments | 3 | — | — | |||||
| Write-down of inventories | 3 | 12 | 10 | |||||
| Retrenchments costs | 90 | 14 | 14 | |||||
| Care and maintenance costs (note 5) | 62 | 70 | 67 | |||||
| Net profit on disposal of assets | (8 | ) | (4 | ) | (1 | ) | ||
| (Gain) loss on unrealised non-hedge derivatives and other commodity contracts | (10 | ) | (18 | ) | 7 | |||
| Repurchase premium and cost on settlement of issued bonds | — | 30 | 61 | |||||
| Associates and joint ventures’ special items | (2 | ) | (11 | ) | (9 | ) | ||
| Associates and joint ventures’ – adjustments for amortisation, interest, taxation and other | 116 | 137 | 107 | |||||
| Other amortisation | 7 | — | — | |||||
| Adjusted EBITDA (as defined in the Revolving Credit Facility Agreements) | 1,483 | 1,548 | 1,472 | |||||
| Gearing ratio (Net debt to Adjusted EBITDA) | 1.35:1 | 1.24:1 | 1.49:1 | |||||
| Maximum debt covenant ratio allowed per agreement | 3.5:1 | 3.5:1 | 3.5:1 | |||||
37 SUBSEQUENT EVENTS
Dividend declaration:On 2022 February 2018,2021, the directors of AngloGold Ashanti declared a gross cash dividend per ordinary share of 70705 South African cents (assuming an exchange rate of ZAR11.66/ZAR 14.7/$, the gross dividend payable per ADS is equivalent to 648 US cents).
F - 91
38 SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
AngloGold Ashanti Holdings plc (“IOMco”), a 100 percent wholly-owned subsidiary of AngloGold Ashanti Limited, has issued debt securities which are fully and unconditionally guaranteed by AngloGold Ashanti Limited (being the “Guarantor”). See Note 25 and Note 33. IOMco is an Isle of Man registered company that holds certain of AngloGold Ashanti’s operations and assets located outside South Africa (excluding certain operations and assets in the United States of America). The following is condensed consolidating financial information for the Company as of 31 December 2017, 20162020, 2019 and 20152018 and for the years ended 31 December 2017, 20162020, 2019 and 2015,2018, with a separate column for each of AngloGold Ashanti Limited as Guarantor, IOMco as Issuer and the other subsidiaries of the Company combined (the “Non-Guarantor Subsidiaries”). For the purposes of the condensed consolidating financial information, the Company carries its investments under the equity method. The following supplemental condensed consolidating financial information should be read in conjunction with the Company’s condensed consolidated financial statements.
| Figures in millions (US dollars) | 2020 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||
| Condensed consolidating income statement | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| Revenue from product sales | 0 | 0 | 4,427 | 0 | 4,427 | ||||||||||||||||||||||||
| Cost of sales | 0 | 0 | (2,699) | 0 | (2,699) | ||||||||||||||||||||||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 0 | 0 | (14) | (5) | (19) | ||||||||||||||||||||||||
| Gross profit (loss) | 0 | 0 | 1,714 | (5) | 1,709 | ||||||||||||||||||||||||
| Corporate administration, marketing and other income (expenses) | (38) | (15) | (8) | (7) | (68) | ||||||||||||||||||||||||
| Exploration and evaluation costs | 0 | 0 | (124) | 0 | (124) | ||||||||||||||||||||||||
| Impairment, derecognition of assets and profit (loss) on disposal | 0 | 0 | (1) | 0 | (1) | ||||||||||||||||||||||||
| Other income (expenses) | (16) | (4) | (40) | 3 | (57) | ||||||||||||||||||||||||
| Operating profit (loss) | (54) | (19) | 1,541 | (9) | 1,459 | ||||||||||||||||||||||||
| Interest income | 3 | 7 | 17 | 0 | 27 | ||||||||||||||||||||||||
| Dividend received | 9 | 0 | (7) | 0 | 2 | ||||||||||||||||||||||||
| Foreign exchange and other gains (losses) | (3) | 1 | 2 | 0 | 0 | ||||||||||||||||||||||||
| Finance costs and unwinding of obligations | (11) | (119) | (63) | 16 | (177) | ||||||||||||||||||||||||
| Share of associates and joint ventures’ profit (loss) | 0 | 0 | 444 | (166) | 278 | ||||||||||||||||||||||||
| Equity gain (loss) in subsidiaries | 1,126 | 1,263 | 0 | (2,389) | 0 | ||||||||||||||||||||||||
| Profit (loss) before taxation | 1,070 | 1,133 | 1,934 | (2,548) | 1,589 | ||||||||||||||||||||||||
| Taxation | (74) | 0 | (551) | 0 | (625) | ||||||||||||||||||||||||
| Profit (loss) after taxation from continuing operations | 996 | 1,133 | 1,383 | (2,548) | 964 | ||||||||||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||||||||
| Profit (loss) from discontinued operations | (43) | 0 | 5 | 45 | 7 | ||||||||||||||||||||||||
| Profit (loss) for the period | 953 | 1,133 | 1,388 | (2,503) | 971 | ||||||||||||||||||||||||
| Allocated as follows: | |||||||||||||||||||||||||||||
| Equity shareholders | |||||||||||||||||||||||||||||
| - Continuing operations | 996 | 1,133 | 1,365 | (2,548) | 946 | ||||||||||||||||||||||||
| - Discontinued operations | (43) | 0 | 5 | 45 | 7 | ||||||||||||||||||||||||
| Non-controlling interests | |||||||||||||||||||||||||||||
| - Continuing operations | 0 | 0 | 18 | 0 | 18 | ||||||||||||||||||||||||
| 953 | 1,133 | 1,388 | (2,503) | 971 | |||||||||||||||||||||||||
| Comprehensive income (loss) | 1,077 | 1,251 | 1,427 | (2,660) | 1,095 | ||||||||||||||||||||||||
| Comprehensive (income) loss attributable to non-controlling interests | 0 | 0 | (18) | 0 | (18) | ||||||||||||||||||||||||
| Comprehensive income (loss) attributable to AngloGold Ashanti | 1,077 | 1,251 | 1,409 | (2,660) | 1,077 | ||||||||||||||||||||||||
F - 92
| Figures in millions (US dollars) | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||
| Condensed consolidating income statement | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| Revenue | 1,005 | 3 | 3,535 | — | 4,543 | |||||||||
| Gold income | 987 | — | 3,399 | (30 | ) | 4,356 | ||||||||
| Cost of sales | (1,016 | ) | — | (2,567 | ) | 1 | (3,582 | ) | ||||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | — | — | 11 | (1 | ) | 10 | ||||||||
| Gross profit (loss) | (29 | ) | — | 843 | (30 | ) | 784 | |||||||
| Corporate administration, marketing and other income (expenses) | (7 | ) | (7 | ) | (2 | ) | (48 | ) | (64 | ) | ||||
| Exploration and evaluation costs | (10 | ) | — | (104 | ) | — | (114 | ) | ||||||
| Other operating income (expenses) | (9 | ) | — | (79 | ) | — | (88 | ) | ||||||
| Special items | (414 | ) | (6 | ) | (27 | ) | 9 | (438 | ) | |||||
| Operating profit (loss) | (469 | ) | (13 | ) | 631 | (69 | ) | 80 | ||||||
| Interest received | 1 | 3 | 11 | — | 15 | |||||||||
| Exchange gain (loss) | — | 1 | (12 | ) | — | (11 | ) | |||||||
| Finance costs and unwinding of obligations | (22 | ) | (107 | ) | (40 | ) | — | (169 | ) | |||||
| Share of associates and joint ventures’ profit (loss) | 13 | — | 9 | — | 22 | |||||||||
| Equity gain (loss) in subsidiaries | 212 | 447 | — | (659 | ) | — | ||||||||
| Profit (loss) before taxation | (265 | ) | 331 | 599 | (728 | ) | (63 | ) | ||||||
| Taxation | 104 | — | (212 | ) | — | (108 | ) | |||||||
| Profit (loss) after taxation from continuing operations | (161 | ) | 331 | 387 | (728 | ) | (171 | ) | ||||||
| Preferred stock dividends | (30 | ) | — | — | 30 | — | ||||||||
| Profit (loss) for the period | (191 | ) | 331 | 387 | (698 | ) | (171 | ) | ||||||
| Allocated as follows: | ||||||||||||||
| Equity shareholders | ||||||||||||||
| - Continuing operations | (191 | ) | 331 | 367 | (698 | ) | (191 | ) | ||||||
| Non-controlling interests | ||||||||||||||
| - Continuing operations | — | — | 20 | — | 20 | |||||||||
| (191 | ) | 331 | 387 | (698 | ) | (171 | ) | |||||||
| Comprehensive income (loss) | (37 | ) | 365 | 422 | (767 | ) | (17 | ) | ||||||
| Comprehensive income (loss) attributable to non-controlling interests | — | — | (20 | ) | — | (20 | ) | |||||||
| Comprehensive income (loss) attributable to AngloGold Ashanti | (37 | ) | 365 | 402 | (767 | ) | (37 | ) | ||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2019 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||
| Condensed consolidating income statement | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| Revenue from product sales | 0 | 0 | 3,525 | 0 | 3,525 | ||||||||||||||||||||||||
| Cost of sales | (1) | 0 | (2,625) | 0 | (2,626) | ||||||||||||||||||||||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 0 | 0 | 5 | 0 | 5 | ||||||||||||||||||||||||
| Gross profit (loss) | (1) | 0 | 905 | 0 | 904 | ||||||||||||||||||||||||
| Corporate administration, marketing and other income (expenses) | (41) | (6) | (17) | (18) | (82) | ||||||||||||||||||||||||
| Exploration and evaluation costs | 0 | 0 | (112) | 0 | (112) | ||||||||||||||||||||||||
| Impairment, derecognition of assets and profit (loss) on disposal | 0 | (3) | (6) | 3 | (6) | ||||||||||||||||||||||||
| Other income (expenses) | (10) | 3 | 135 | (211) | (83) | ||||||||||||||||||||||||
| Operating profit (loss) | (52) | (6) | 905 | (226) | 621 | ||||||||||||||||||||||||
| Interest income | 3 | 6 | 5 | 0 | 14 | ||||||||||||||||||||||||
| Foreign exchange and other gains (losses) | 0 | (4) | (8) | 0 | (12) | ||||||||||||||||||||||||
| Finance costs and unwinding of obligations | (16) | (106) | (56) | 6 | (172) | ||||||||||||||||||||||||
| Share of associates and joint ventures’ profit (loss) | 0 | 0 | 154 | 14 | 168 | ||||||||||||||||||||||||
| Equity gain (loss) in subsidiaries | 302 | 815 | 0 | (1,117) | 0 | ||||||||||||||||||||||||
| Profit (loss) before taxation | 237 | 705 | 1,000 | (1,323) | 619 | ||||||||||||||||||||||||
| Taxation | 32 | 0 | (282) | 0 | (250) | ||||||||||||||||||||||||
| Profit (loss) after taxation from continuing operations | 269 | 705 | 718 | (1,323) | 369 | ||||||||||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||||||||
| Profit (loss) from discontinued operations | (281) | 0 | (95) | 0 | (376) | ||||||||||||||||||||||||
| Profit (loss) for the period | (12) | 705 | 623 | (1,323) | (7) | ||||||||||||||||||||||||
| Allocated as follows: | |||||||||||||||||||||||||||||
| Equity shareholders | |||||||||||||||||||||||||||||
| - Continuing operations | 269 | 705 | 713 | (1,323) | 364 | ||||||||||||||||||||||||
| - Discontinued operations | (281) | 0 | (95) | 0 | (376) | ||||||||||||||||||||||||
| Non-controlling interests | |||||||||||||||||||||||||||||
| Continuing operations | 0 | 0 | 5 | 0 | 5 | ||||||||||||||||||||||||
| (12) | 705 | 623 | (1,323) | (7) | |||||||||||||||||||||||||
| Comprehensive income (loss) | 2 | 717 | 618 | (1,330) | 7 | ||||||||||||||||||||||||
| Comprehensive (income) loss attributable to non-controlling interests | 0 | 0 | (5) | 0 | (5) | ||||||||||||||||||||||||
| Comprehensive income (loss) attributable to AngloGold Ashanti | 2 | 717 | 613 | (1,330) | 2 | ||||||||||||||||||||||||
F - 93
| Figures in millions (US dollars) | 2016 | 2016 | 2016 | 2016 | 2016 | |||||||||
| Condensed consolidating income statement | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| Revenue | 1,110 | 3 | 3,141 | — | 4,254 | |||||||||
| Gold income | 1,108 | — | 3,035 | (58 | ) | 4,085 | ||||||||
| Cost of sales | (958 | ) | — | (2,305 | ) | — | (3,263 | ) | ||||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | — | — | 18 | 1 | 19 | |||||||||
| Gross profit (loss) | 150 | — | 748 | (57 | ) | 841 | ||||||||
| Corporate administration, marketing and other income (expenses) | 17 | (6 | ) | (3 | ) | (69 | ) | (61 | ) | |||||
| Exploration and evaluation costs | (14 | ) | — | (119 | ) | — | (133 | ) | ||||||
| Other operating income (expenses) | (26 | ) | 2 | (86 | ) | — | (110 | ) | ||||||
| Special items | 54 | (35 | ) | 29 | (90 | ) | (42 | ) | ||||||
| Operating profit (loss) | 181 | (39 | ) | 569 | (216 | ) | 495 | |||||||
| Interest received | 6 | 3 | 13 | — | 22 | |||||||||
| Exchange gain (loss) | 1 | (1 | ) | (28 | ) | (60 | ) | (88 | ) | |||||
| Finance costs and unwinding of obligations | (18 | ) | (131 | ) | (31 | ) | — | (180 | ) | |||||
| Fair value adjustment on $1.25bn bonds | — | 9 | — | — | 9 | |||||||||
| Share of associates and joint ventures’ profit (loss) | (13 | ) | 2 | 30 | (8 | ) | 11 | |||||||
| Equity gain (loss) in subsidiaries | (61 | ) | 389 | — | (328 | ) | — | |||||||
| Profit (loss) before taxation | 96 | 232 | 553 | (612 | ) | 269 | ||||||||
| Taxation | (4 | ) | — | (184 | ) | (1 | ) | (189 | ) | |||||
| Profit (loss) after taxation from continuing operations | 92 | 232 | 369 | (613 | ) | 80 | ||||||||
| Preferred stock dividends | (29 | ) | — | (29 | ) | 58 | — | |||||||
| Profit (loss) for the period | 63 | 232 | 340 | (555 | ) | 80 | ||||||||
| Allocated as follows: | ||||||||||||||
| Equity shareholders | ||||||||||||||
| - Continuing operations | 63 | 232 | 323 | (555 | ) | 63 | ||||||||
| Non-controlling interests | ||||||||||||||
| - Continuing operations | — | — | 17 | — | 17 | |||||||||
| 63 | 232 | 340 | (555 | ) | 80 | |||||||||
| Comprehensive income (loss) | 250 | 234 | 388 | (605 | ) | 267 | ||||||||
| Comprehensive income (loss) attributable to non-controlling interests | — | — | (17 | ) | — | (17 | ) | |||||||
| Comprehensive income (loss) attributable to AngloGold Ashanti | 250 | 234 | 371 | (605 | ) | 250 | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2018 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||||||||||
| Condensed consolidating income statement | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| Revenue from product sales | 0 | 0 | 3,336 | 0 | 3,336 | ||||||||||||||||||||||||
| Cost of sales | (2) | 0 | (2,582) | 0 | (2,584) | ||||||||||||||||||||||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | 0 | 0 | (2) | 0 | (2) | ||||||||||||||||||||||||
| Gross profit (loss) | (2) | 0 | 752 | 0 | 750 | ||||||||||||||||||||||||
| Corporate administration, marketing and other income (expenses) | (12) | (20) | (13) | (31) | (76) | ||||||||||||||||||||||||
| Exploration and evaluation costs | 0 | 0 | (98) | 0 | (98) | ||||||||||||||||||||||||
| Impairment, derecognition of assets and profit (loss) on disposal | 0 | 1 | (9) | 1 | (7) | ||||||||||||||||||||||||
| Other income (expenses) | (10) | 10 | (70) | (9) | (79) | ||||||||||||||||||||||||
| Operating profit (loss) | (24) | (9) | 562 | (39) | 490 | ||||||||||||||||||||||||
| Interest income | 0 | 4 | 4 | 0 | 8 | ||||||||||||||||||||||||
| Dividend received | 2 | 0 | 0 | 0 | 2 | ||||||||||||||||||||||||
| Foreign exchange and other gains (losses) | 0 | (6) | (3) | 0 | (9) | ||||||||||||||||||||||||
| Finance costs and unwinding of obligations | (16) | (107) | (45) | 0 | (168) | ||||||||||||||||||||||||
| Share of associates and joint ventures’ profit (loss) | 5 | 0 | 108 | 9 | 122 | ||||||||||||||||||||||||
| Equity gain (loss) in subsidiaries | 142 | 490 | 0 | (632) | 0 | ||||||||||||||||||||||||
| Profit (loss) before taxation | 109 | 372 | 626 | (662) | 445 | ||||||||||||||||||||||||
| Taxation | 23 | 0 | (235) | 0 | (212) | ||||||||||||||||||||||||
| Profit (loss) after taxation from continuing operations | 132 | 372 | 391 | (662) | 233 | ||||||||||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||||||||
| Profit (loss) from discontinued operations | 1 | 0 | (84) | 0 | (83) | ||||||||||||||||||||||||
| Profit (loss) for the period | 133 | 372 | 307 | (662) | 150 | ||||||||||||||||||||||||
| Allocated as follows: | |||||||||||||||||||||||||||||
| Equity shareholders | |||||||||||||||||||||||||||||
| - Continuing operations | 132 | 372 | 374 | (662) | 216 | ||||||||||||||||||||||||
| - Discontinued operations | 1 | 0 | (84) | 0 | (83) | ||||||||||||||||||||||||
| Non-controlling interests | |||||||||||||||||||||||||||||
| - Continuing operations | 0 | 0 | 17 | 0 | 17 | ||||||||||||||||||||||||
| 133 | 372 | 307 | (662) | 150 | |||||||||||||||||||||||||
| Comprehensive income (loss) | (8) | 320 | 301 | (604) | 9 | ||||||||||||||||||||||||
| Comprehensive (income) loss attributable to non-controlling interests | 0 | 0 | (17) | 0 | (17) | ||||||||||||||||||||||||
| Comprehensive income (loss) attributable to AngloGold Ashanti | (8) | 320 | 284 | (604) | (8) | ||||||||||||||||||||||||
F - 94
| Figures in millions (US dollars) | 2015 | 2015 | 2015 | 2015 | 2015 | ||||||||||
| Condensed consolidating income statement | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||
| Revenue | 1,091 | 2 | 3,081 | — | 4,174 | ||||||||||
| Gold income | 1,063 | — | 2,991 | (39 | ) | 4,015 | |||||||||
| Cost of sales | (995 | ) | — | (2,299 | ) | — | (3,294 | ) | |||||||
| Gain (loss) on non-hedge derivatives and other commodity contracts | — | — | (7 | ) | — | (7 | ) | ||||||||
| Gross profit (loss) | 68 | — | 685 | (39 | ) | 714 | |||||||||
| Corporate administration, marketing and other income (expenses) | 3 | (15 | ) | (15 | ) | (51 | ) | (78 | ) | ||||||
| Exploration and evaluation costs | (16 | ) | — | (116 | ) | — | (132 | ) | |||||||
| Other operating income (expenses) | (17 | ) | — | (79 | ) | — | (96 | ) | |||||||
| Special items | (132 | ) | (436 | ) | 65 | 432 | (71 | ) | |||||||
| Operating profit (loss) | (94 | ) | (451 | ) | 540 | 342 | 337 | ||||||||
| Interest received | 6 | 2 | 20 | — | 28 | ||||||||||
| Exchange gain (loss) | (1 | ) | (1 | ) | (15 | ) | — | (17 | ) | ||||||
| Finance costs and unwinding of obligations | (21 | ) | (196 | ) | (28 | ) | — | (245 | ) | ||||||
| Fair value adjustment on $1.25bn bonds | — | 66 | — | — | 66 | ||||||||||
| Share of associates and joint ventures’ profit (loss) | 11 | 1 | 77 | — | (1 | ) | 88 | ||||||||
| Equity gain (loss) in subsidiaries | (26 | ) | 140 | — | (114 | ) | — | ||||||||
| Profit (loss) before taxation | (125 | ) | (439 | ) | 594 | 227 | 257 | ||||||||
| Taxation | 59 | (1 | ) | (269 | ) | — | (211 | ) | |||||||
| Profit (loss) after taxation from continuing operations | (66 | ) | (440 | ) | 325 | 227 | 46 | ||||||||
| Discontinued operations | |||||||||||||||
| Profit (loss) from discontinued operations | — | — | (116 | ) | — | (116 | ) | ||||||||
| Profit (loss) after discontinued operations | (66 | ) | (440 | ) | 209 | 227 | (70 | ) | |||||||
| Preferred stock dividends | (19 | ) | — | (20 | ) | 39 | — | ||||||||
| Profit (loss) for the period | (85 | ) | (440 | ) | 189 | 266 | (70 | ) | |||||||
| Allocated as follows: | |||||||||||||||
| Equity shareholders | |||||||||||||||
| - Continuing operations | (85 | ) | (440 | ) | 290 | 266 | 31 | ||||||||
| - Discontinued operations | — | — | (116 | ) | — | (116 | ) | ||||||||
| Non-controlling interests | |||||||||||||||
| - Continuing operations | — | — | 15 | — | 15 | ||||||||||
| (85 | ) | (440 | ) | 189 | 266 | (70 | ) | ||||||||
| Comprehensive income (loss) | (448 | ) | (477 | ) | 142 | 350 | (433 | ) | |||||||
| Comprehensive income (loss) attributable to non-controlling interests | — | — | (15 | ) | — | (15 | ) | ||||||||
| Comprehensive income (loss) attributable to AngloGold Ashanti | (448 | ) | (477 | ) | 127 | 350 | (448 | ) | |||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2020 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||
| Condensed consolidating statement of financial position | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Non-current assets | |||||||||||||||||||||||||||||
| Tangible and right of use assets | 2 | 0 | 3,001 | 22 | 3,026 | ||||||||||||||||||||||||
| Intangible assets | 1 | 0 | 132 | (1) | 131 | ||||||||||||||||||||||||
| Investments in subsidiaries, associates and joint ventures | 3,859 | 5,019 | 1,609 | (8,835) | 1,651 | ||||||||||||||||||||||||
| Other investments | 1 | 3 | 185 | (2) | 188 | ||||||||||||||||||||||||
| Inventories | 0 | 0 | 69 | 0 | 69 | ||||||||||||||||||||||||
| Trade and other receivables | 28 | 33 | 203 | (29) | 235 | ||||||||||||||||||||||||
| Deferred taxation | 0 | 0 | 7 | 0 | 7 | ||||||||||||||||||||||||
| Cash restricted for use | 0 | 0 | 31 | 0 | 31 | ||||||||||||||||||||||||
| 3,891 | 5,055 | 5,237 | (8,845) | 5,338 | |||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 84 | 812 | 1,574 | (1,508) | 962 | ||||||||||||||||||||||||
| Cash restricted for use | 0 | 0 | 42 | 0 | 42 | ||||||||||||||||||||||||
| Cash and cash equivalents | 176 | 572 | 582 | 0 | 1,330 | ||||||||||||||||||||||||
| 260 | 1,384 | 2,198 | (1,508) | 2,334 | |||||||||||||||||||||||||
| Assets held for sale | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| 260 | 1,384 | 2,198 | (1,508) | 2,334 | |||||||||||||||||||||||||
| Total assets | 4,151 | 6,439 | 7,435 | (10,353) | 7,672 | ||||||||||||||||||||||||
| EQUITY AND LIABILITIES | |||||||||||||||||||||||||||||
| Share capital and premium | 7,214 | 6,096 | 807 | (6,903) | 7,214 | ||||||||||||||||||||||||
| Retained earnings (accumulated losses) and other reserves | (3,519) | (1,694) | 2,369 | (675) | (3,519) | ||||||||||||||||||||||||
| Shareholders’ equity | 3,695 | 4,402 | 3,176 | (7,578) | 3,695 | ||||||||||||||||||||||||
| Non-controlling interests | 0 | 0 | 45 | 0 | 45 | ||||||||||||||||||||||||
| Total equity | 3,695 | 4,402 | 3,221 | (7,578) | 3,740 | ||||||||||||||||||||||||
| Non-current liabilities | 128 | 1,724 | 1,121 | 0 | 2,973 | ||||||||||||||||||||||||
| Current liabilities including intergroup balances | 328 | 313 | 3,093 | (2,775) | 959 | ||||||||||||||||||||||||
| Liabilities held for sale | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Total liabilities | 456 | 2,037 | 4,214 | (2,775) | 3,932 | ||||||||||||||||||||||||
| Total equity and liabilities | 4,151 | 6,439 | 7,435 | (10,353) | 7,672 | ||||||||||||||||||||||||
F - 95
| Figures in millions (US dollars) | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||
| Condensed consolidating statement of financial position | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| ASSETS | ||||||||||||||
| Non-current assets | ||||||||||||||
| Tangible assets | 739 | — | 3,003 | — | 3,742 | |||||||||
| Intangible assets | 1 | — | 139 | (2 | ) | 138 | ||||||||
| Investments in associates and joint ventures | 2,371 | 4,376 | 1,371 | (6,611 | ) | 1,507 | ||||||||
| Other investments | 2 | 6 | 125 | (2 | ) | 131 | ||||||||
| Inventories | — | — | 100 | — | 100 | |||||||||
| Trade and other receivables | — | — | 67 | — | 67 | |||||||||
| Deferred taxation | — | — | 4 | — | 4 | |||||||||
| Cash restricted for use | — | — | 37 | — | 37 | |||||||||
| 3,113 | 4,382 | 4,846 | (6,615 | ) | 5,726 | |||||||||
| Current assets | ||||||||||||||
| Other investments | — | 6 | 1 | — | 7 | |||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 471 | 250 | 1,166 | (982 | ) | 905 | ||||||||
| Cash restricted for use | — | 1 | 27 | — | 28 | |||||||||
| Cash and cash equivalents | 11 | 21 | 173 | — | 205 | |||||||||
| 482 | 278 | 1,367 | (982 | ) | 1,145 | |||||||||
| Non-current assets held for sale | 310 | — | 38 | — | 348 | |||||||||
| 792 | 278 | 1,405 | (982 | ) | 1,493 | |||||||||
| Total assets | 3,905 | 4,660 | 6,251 | (7,597 | ) | 7,219 | ||||||||
| EQUITY AND LIABILITIES | ||||||||||||||
| Share capital and premium | 7,134 | 6,172 | 824 | (6,996 | ) | 7,134 | ||||||||
| Retained earnings (accumulated losses) and other reserves | (4,471 | ) | (3,491 | ) | 1,619 | 1,872 | (4,471 | ) | ||||||
| Shareholders’ equity | 2,663 | 2,681 | 2,443 | (5,124 | ) | 2,663 | ||||||||
| Non-controlling interests | — | — | 41 | — | 41 | |||||||||
| Total equity | 2,663 | 2,681 | 2,484 | (5,124 | ) | 2,704 | ||||||||
| Non-current liabilities | 527 | 1,764 | 1,369 | — | 3,660 | |||||||||
| Current liabilities including intergroup balances | 591 | 215 | 2,396 | (2,473 | ) | 729 | ||||||||
| Non-current liabilities held for sale | 124 | — | 2 | — | 126 | |||||||||
| Total liabilities | 1,242 | 1,979 | 3,767 | (2,473 | ) | 4,515 | ||||||||
| Total equity and liabilities | 3,905 | 4,660 | 6,251 | (7,597 | ) | 7,219 | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2019 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||
| Condensed consolidating statement of financial position | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Non-current assets | |||||||||||||||||||||||||||||
| Tangible assets and right of use assets | 4 | 0 | 2,740 | 6 | 2,750 | ||||||||||||||||||||||||
| Intangible assets | 1 | 0 | 123 | (1) | 123 | ||||||||||||||||||||||||
| Investments in subsidiaries, associates and joint ventures | 2,646 | 4,612 | 1,459 | (7,136) | 1,581 | ||||||||||||||||||||||||
| Other investments | 2 | 2 | 74 | (2) | 76 | ||||||||||||||||||||||||
| Inventories | 0 | 0 | 93 | 0 | 93 | ||||||||||||||||||||||||
| Trade and other receivables | 0 | 29 | 122 | (29) | 122 | ||||||||||||||||||||||||
| Deferred taxation | 105 | 0 | 0 | 0 | 105 | ||||||||||||||||||||||||
| Cash restricted for use | 0 | 0 | 31 | 0 | 31 | ||||||||||||||||||||||||
| 2,758 | 4,643 | 4,642 | (7,162) | 4,881 | |||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Other investments | 0 | 10 | 0 | 0 | 10 | ||||||||||||||||||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 333 | 619 | 1,247 | (1,317) | 882 | ||||||||||||||||||||||||
| Cash restricted for use | 0 | 0 | 33 | 0 | 33 | ||||||||||||||||||||||||
| Cash and cash equivalents | 12 | 102 | 342 | 0 | 456 | ||||||||||||||||||||||||
| 345 | 731 | 1,622 | (1,317) | 1,381 | |||||||||||||||||||||||||
| Assets held for sale | 253 | 0 | 348 | 0 | 601 | ||||||||||||||||||||||||
| 598 | 731 | 1,970 | (1,317) | 1,982 | |||||||||||||||||||||||||
| Total assets | 3,356 | 5,374 | 6,612 | (8,479) | 6,863 | ||||||||||||||||||||||||
| EQUITY AND LIABILITIES | |||||||||||||||||||||||||||||
| Share capital and premium | 7,199 | 6,096 | 837 | (6,933) | 7,199 | ||||||||||||||||||||||||
| Retained earnings (accumulated losses) and other reserves | (4,559) | (2,715) | 1,668 | 1,047 | (4,559) | ||||||||||||||||||||||||
| Shareholders’ equity | 2,640 | 3,381 | 2,505 | (5,886) | 2,640 | ||||||||||||||||||||||||
| Non-controlling interests | 0 | 0 | 36 | 0 | 36 | ||||||||||||||||||||||||
| Total equity | 2,640 | 3,381 | 2,541 | (5,886) | 2,676 | ||||||||||||||||||||||||
| Non-current liabilities | 225 | 1,031 | 1,222 | 0 | 2,478 | ||||||||||||||||||||||||
| Current liabilities including intergroup balances | 401 | 962 | 2,667 | (2,593) | 1,437 | ||||||||||||||||||||||||
| Liabilities held for sale | 90 | 0 | 182 | 0 | 272 | ||||||||||||||||||||||||
| Total liabilities | 716 | 1,993 | 4,071 | (2,593) | 4,187 | ||||||||||||||||||||||||
| Total equity and liabilities | 3,356 | 5,374 | 6,612 | (8,479) | 6,863 | ||||||||||||||||||||||||
F - 96
| Figures in millions (US dollars) | 2016 | 2016 | 2016 | 2016 | 2016 | |||||||||
| Condensed consolidating statement of financial position | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| ASSETS | ||||||||||||||
| Non-current assets | ||||||||||||||
| Tangible assets | 1,160 | — | 2,951 | — | 4,111 | |||||||||
| Intangible assets | 4 | — | 143 | (2 | ) | 145 | ||||||||
| Investments in associates and joint ventures | 2,109 | 3,478 | 1,338 | (5,477 | ) | 1,448 | ||||||||
| Other investments | 2 | 3 | 122 | (2 | ) | 125 | ||||||||
| Inventories | — | — | 84 | — | 84 | |||||||||
| Trade and other receivables | — | — | 34 | — | 34 | |||||||||
| Deferred taxation | — | — | 4 | — | 4 | |||||||||
| Cash restricted for use | — | — | 36 | — | 36 | |||||||||
| Other non-current assets | — | — | — | — | — | |||||||||
| 3,275 | 3,481 | 4,712 | (5,481 | ) | 5,987 | |||||||||
| Current assets | ||||||||||||||
| Other investments | — | 5 | — | — | 5 | |||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 429 | 912 | 1,153 | (1,567 | ) | 927 | ||||||||
| Cash restricted for use | — | 1 | 18 | — | 19 | |||||||||
| Cash and cash equivalents | 44 | 32 | 139 | — | 215 | |||||||||
| 473 | 950 | 1,310 | (1,567 | ) | 1,166 | |||||||||
| Total assets | 3,748 | 4,431 | 6,022 | (7,048 | ) | 7,153 | ||||||||
| EQUITY AND LIABILITIES | ||||||||||||||
| Share capital and premium | 7,108 | 6,215 | 824 | (7,039 | ) | 7,108 | ||||||||
| Retained earnings (accumulated losses) and other reserves | (4,393 | ) | (3,765 | ) | 702 | 3,063 | (4,393 | ) | ||||||
| Shareholders’ equity | 2,715 | 2,450 | 1,526 | (3,976 | ) | 2,715 | ||||||||
| Non-controlling interests | — | — | 39 | — | 39 | |||||||||
| Total equity | 2,715 | 2,450 | 1,565 | (3,976 | ) | 2,754 | ||||||||
| Non-current liabilities | 496 | 1,799 | 1,344 | — | 3,639 | |||||||||
| Current liabilities including intergroup balances | 537 | 182 | 3,113 | (3,072 | ) | 760 | ||||||||
| Total liabilities | 1,033 | 1,981 | 4,457 | (3,072 | ) | 4,399 | ||||||||
| Total equity and liabilities | 3,748 | 4,431 | 6,022 | (7,048 | ) | 7,153 | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2018 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||||||||||
| Condensed consolidating statement of financial position | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||
| Non-current assets | |||||||||||||||||||||||||||||
| Tangible assets | 625 | 0 | 2,756 | 0 | 3,381 | ||||||||||||||||||||||||
| Intangible assets | 1 | 0 | 123 | (1) | 123 | ||||||||||||||||||||||||
| Investments in subsidiaries, associates and joint ventures | 2,383 | 4,255 | 1,398 | (6,508) | 1,528 | ||||||||||||||||||||||||
| Other investments | 2 | 3 | 138 | (2) | 141 | ||||||||||||||||||||||||
| Inventories | 1 | 0 | 105 | 0 | 106 | ||||||||||||||||||||||||
| Trade and other receivables | 0 | 29 | 102 | (29) | 102 | ||||||||||||||||||||||||
| Cash restricted for use | 0 | 0 | 35 | 0 | 35 | ||||||||||||||||||||||||
| 3,012 | 4,287 | 4,657 | (6,540) | 5,416 | |||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Other investments | 0 | 6 | 0 | 0 | 6 | ||||||||||||||||||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 390 | 416 | 1,166 | (1,111) | 861 | ||||||||||||||||||||||||
| Cash restricted for use | 0 | 0 | 31 | 0 | 31 | ||||||||||||||||||||||||
| Cash and cash equivalents | 7 | 97 | 225 | 0 | 329 | ||||||||||||||||||||||||
| 397 | 519 | 1,422 | (1,111) | 1,227 | |||||||||||||||||||||||||
| Total assets | 3,409 | 4,806 | 6,079 | (7,651) | 6,643 | ||||||||||||||||||||||||
| EQUITY AND LIABILITIES | |||||||||||||||||||||||||||||
| Share capital and premium | 7,171 | 6,096 | 821 | (6,917) | 7,171 | ||||||||||||||||||||||||
| Retained earnings (accumulated losses) and other reserves | (4,519) | (3,310) | 1,406 | 1,904 | (4,519) | ||||||||||||||||||||||||
| Shareholders’ equity | 2,652 | 2,786 | 2,227 | (5,013) | 2,652 | ||||||||||||||||||||||||
| Non-controlling interests | 0 | 0 | 42 | 0 | 42 | ||||||||||||||||||||||||
| Total equity | 2,652 | 2,786 | 2,269 | (5,013) | 2,694 | ||||||||||||||||||||||||
| Non-current liabilities | 319 | 1,734 | 1,103 | 0 | 3,156 | ||||||||||||||||||||||||
| Current liabilities including intergroup balances | 438 | 286 | 2,707 | (2,638) | 793 | ||||||||||||||||||||||||
| Total liabilities | 757 | 2,020 | 3,810 | (2,638) | 3,949 | ||||||||||||||||||||||||
| Total equity and liabilities | 3,409 | 4,806 | 6,079 | (7,651) | 6,643 | ||||||||||||||||||||||||
F - 97
| Figures in millions (US dollars) | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||
| Condensed consolidating statement of financial position | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| ASSETS | ||||||||||||||
| Non-current assets | ||||||||||||||
| Tangible assets | 1,030 | — | 3,028 | — | 4,058 | |||||||||
| Intangible assets | 8 | — | 155 | (2 | ) | 161 | ||||||||
| Investments in associates and joint ventures | 2,002 | 3,627 | 1,338 | (5,502 | ) | 1,465 | ||||||||
| Other investments | 1 | 3 | 89 | (2 | ) | 91 | ||||||||
| Inventories | — | — | 90 | — | 90 | |||||||||
| Trade and other receivables | — | — | 13 | — | 13 | |||||||||
| Deferred taxation | — | — | 1 | — | 1 | |||||||||
| Cash restricted for use | — | — | 37 | — | 37 | |||||||||
| Other non-current assets | 18 | — | — | — | 18 | |||||||||
| 3,059 | 3,630 | 4,751 | (5,506 | ) | 5,934 | |||||||||
| Current assets | ||||||||||||||
| Other investments | — | 1 | — | — | 1 | |||||||||
| Inventories, trade and other receivables, intergroup balances and other current assets | 401 | 921 | 1,076 | (1,556 | ) | 842 | ||||||||
| Cash restricted for use | 1 | 2 | 20 | — | 23 | |||||||||
| Cash and cash equivalents | 19 | 222 | 243 | — | 484 | |||||||||
| 421 | 1,146 | 1,339 | (1,556 | ) | 1,350 | |||||||||
| Total assets | 3,480 | 4,776 | 6,090 | (7,062 | ) | 7,284 | ||||||||
| EQUITY AND LIABILITIES | ||||||||||||||
| Share capital and premium | 7,066 | 6,108 | 824 | (6,932 | ) | 7,066 | ||||||||
| Retained earnings (accumulated losses) and other reserves | (4,636 | ) | (3,903 | ) | 895 | 3,008 | (4,636 | ) | ||||||
| Shareholders’ equity | 2,430 | 2,205 | 1,719 | (3,924 | ) | 2,430 | ||||||||
| Non-controlling interests | — | — | 37 | — | 37 | |||||||||
| Total equity | 2,430 | 2,205 | 1,756 | (3,924 | ) | 2,467 | ||||||||
| Non-current liabilities | 428 | 2,427 | 1,255 | — | 4,110 | |||||||||
| Current liabilities including intergroup balances | 622 | 144 | 3,079 | (3,138 | ) | 707 | ||||||||
| Total liabilities | 1,050 | 2,571 | 4,334 | (3,138 | ) | 4,817 | ||||||||
| Total equity and liabilities | 3,480 | 4,776 | 6,090 | (7,062 | ) | 7,284 | ||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2020 | 2020 | 2020 | 2020 | 2020 | ||||||||||||||||||||||||
| Condensed consolidating statement of cash flow | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||||||||||||
| Cash generated from (used by) operations | (100) | (18) | 1,948 | (2) | 1,828 | ||||||||||||||||||||||||
| Net movement in intergroup receivables and payables | 29 | (218) | 191 | (2) | 0 | ||||||||||||||||||||||||
| Dividends received from joint ventures | 0 | 148 | 0 | 0 | 148 | ||||||||||||||||||||||||
| Taxation paid | 0 | 0 | (431) | 0 | (431) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities from continuing operations | (71) | (88) | 1,708 | (4) | 1,545 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities from discontinued operations | 74 | 0 | 35 | 0 | 109 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities | 3 | (88) | 1,743 | (4) | 1,654 | ||||||||||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||||||||||||
| Capital expenditure | 0 | 0 | (701) | 0 | (701) | ||||||||||||||||||||||||
| Interest capitalised and paid | 0 | 0 | 0 | (17) | (17) | ||||||||||||||||||||||||
| Acquisition of intangible assets | (1) | 0 | 0 | 0 | (1) | ||||||||||||||||||||||||
| Proceeds from disposal of tangible assets | 1 | 0 | 2 | 0 | 3 | ||||||||||||||||||||||||
| Dividends from other investments | 9 | 0 | 0 | 0 | 9 | ||||||||||||||||||||||||
| Other investments acquired | 0 | 0 | (8) | 0 | (8) | ||||||||||||||||||||||||
| Proceeds from disposal of other investments | 0 | 9 | 0 | 0 | 9 | ||||||||||||||||||||||||
| Proceeds from disposal of joint ventures | 0 | 26 | 0 | 0 | 26 | ||||||||||||||||||||||||
| Net loans repaid by (advanced to) associates and joint ventures | 10 | 2 | 0 | 0 | 12 | ||||||||||||||||||||||||
| Disposal (acquisition) of subsidiaries and recognition of joint operation | (10) | (8) | 10 | 10 | 2 | ||||||||||||||||||||||||
| Proceeds from disposal of discontinued assets and subsidiaries | 205 | 0 | 0 | (5) | 200 | ||||||||||||||||||||||||
| Decrease (increase) in cash restricted for use | 1 | 0 | (10) | 0 | (9) | ||||||||||||||||||||||||
| Interest received | 3 | 8 | 16 | 0 | 27 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities from continuing operations | 218 | 37 | (691) | (12) | (448) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities from discontinued operations | (24) | 0 | (7) | 0 | (31) | ||||||||||||||||||||||||
| Cash in subsidiaries sold and transferred to held for sale | 0 | 0 | 3 | 0 | 3 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities | 194 | 37 | (695) | (12) | (476) | ||||||||||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||||||||||||
| Increase in share capital | 0 | 0 | 10 | (10) | 0 | ||||||||||||||||||||||||
| Proceeds from borrowings | 133 | 2,050 | 43 | 0 | 2,226 | ||||||||||||||||||||||||
| Repayment of borrowings | (193) | (2,050) | (114) | 0 | (2,357) | ||||||||||||||||||||||||
| Finance costs paid | (7) | (98) | (30) | 17 | (118) | ||||||||||||||||||||||||
| Other borrowing costs | 0 | (33) | 0 | 0 | (33) | ||||||||||||||||||||||||
| Dividends paid | (38) | 0 | (9) | 0 | (47) | ||||||||||||||||||||||||
| Intergroup dividends received (paid) | 52 | 652 | (704) | 0 | 0 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities from continuing operations | (53) | 521 | (804) | 7 | (329) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities from discontinued operations | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities | (53) | 521 | (804) | 7 | (329) | ||||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 144 | 470 | 244 | (9) | 849 | ||||||||||||||||||||||||
| Translation | 20 | 0 | (4) | 9 | 25 | ||||||||||||||||||||||||
| Cash and cash equivalents at beginning of year | 12 | 102 | 342 | 0 | 456 | ||||||||||||||||||||||||
| Cash and cash equivalents at end of year | 176 | 572 | 582 | 0 | 1,330 | ||||||||||||||||||||||||
F - 98
| Figures in millions (US dollars) | 2017 | 2017 | 2017 | 2017 | 2017 | |||||||||
| Condensed consolidating statement of cash flow | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| Cash flows from operating activities | ||||||||||||||
| Cash generated from (used by) operations | (5 | ) | (15 | ) | 1,168 | 3 | 1,151 | |||||||
| Net movement in intergroup receivables and payables | 10 | (102 | ) | 123 | (31 | ) | — | |||||||
| Dividends received from joint ventures | — | 6 | — | — | 6 | |||||||||
| Taxation refund | 3 | — | 11 | — | 14 | |||||||||
| Taxation paid | — | — | (174 | ) | — | (174 | ) | |||||||
| Net cash inflow (outflow) from operating activities | 8 | (111 | ) | 1,128 | (28 | ) | 997 | |||||||
| Cash flows from investing activities | ||||||||||||||
| Capital expenditure | (143 | ) | — | (686 | ) | — | (829 | ) | ||||||
| Expenditure on intangible assets | (1 | ) | — | — | — | (1 | ) | |||||||
| Proceeds from disposal of tangible assets | 3 | — | 4 | — | 7 | |||||||||
| Other investments acquired | — | (5 | ) | (86 | ) | — | (91 | ) | ||||||
| Proceeds from disposal of other investments | — | — | 75 | 3 | 78 | |||||||||
| Investments in associates and joint ventures | — | (15 | ) | (14 | ) | 2 | (27 | ) | ||||||
| Net loans repaid by (advanced to) associates and joint ventures | — | (6 | ) | 2 | (2 | ) | (6 | ) | ||||||
| Reduction in investment in subsidiary | 42 | — | — | (42 | ) | — | ||||||||
| Disposal (acquisition) of subsidiaries | — | (2 | ) | 2 | — | — | ||||||||
| Decrease (increase) in cash restricted for use | — | — | (8 | ) | — | (8 | ) | |||||||
| Interest received | 1 | 3 | 11 | — | 15 | |||||||||
| Net cash inflow (outflow) from investing activities | (98 | ) | (25 | ) | (700 | ) | (39 | ) | (862 | ) | ||||
| Cash flows from financing activities | ||||||||||||||
| Reduction in share capital | — | (43 | ) | — | 43 | — | ||||||||
| Proceeds from borrowings | 539 | 155 | 121 | — | 815 | |||||||||
| Repayment of borrowings | (428 | ) | (170 | ) | (169 | ) | — | (767 | ) | |||||
| Finance costs paid | (15 | ) | (103 | ) | (20 | ) | — | (138 | ) | |||||
| Dividends paid | (39 | ) | — | (19 | ) | — | (58 | ) | ||||||
| Intergroup dividends received (paid) | — | 286 | (286 | ) | — | — | ||||||||
| Net cash inflow (outflow) from financing activities | 57 | 125 | (373 | ) | 43 | (148 | ) | |||||||
| Net increase (decrease) in cash and cash equivalents | (33 | ) | (11 | ) | 55 | (24 | ) | (13 | ) | |||||
| Translation | — | — | (21 | ) | 24 | 3 | ||||||||
| Cash and cash equivalents at beginning of year | 44 | 32 | 139 | — | 215 | |||||||||
| Cash and cash equivalents at end of year | 11 | 21 | 173 | — | 205 | |||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2019 | 2019 | 2019 | 2019 | 2019 | ||||||||||||||||||||||||
| Condensed consolidating statement of cash flow | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||||||||||||
| Cash generated from (used by) operations | (59) | (8) | 1,165 | 4 | 1,102 | ||||||||||||||||||||||||
| Net movement in intergroup receivables and payables | 35 | (205) | 177 | (7) | 0 | ||||||||||||||||||||||||
| Dividends received from joint ventures | 0 | 77 | 0 | 0 | 77 | ||||||||||||||||||||||||
| Taxation refund | 0 | 0 | 7 | 0 | 7 | ||||||||||||||||||||||||
| Taxation paid | 0 | 0 | (228) | 0 | (228) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities from continuing operations | (24) | (136) | 1,121 | (3) | 958 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities from discontinued operations | 58 | 0 | 31 | 0 | 89 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities | 34 | (136) | 1,152 | (3) | 1,047 | ||||||||||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||||||||||||
| Capital expenditure | 0 | 0 | (703) | 0 | (703) | ||||||||||||||||||||||||
| Interest capitalised and paid | 0 | 0 | 0 | (6) | (6) | ||||||||||||||||||||||||
| Proceeds from disposal of tangible assets | 0 | 0 | 3 | 0 | 3 | ||||||||||||||||||||||||
| Other investments acquired | 0 | 0 | (9) | 0 | (9) | ||||||||||||||||||||||||
| Proceeds from disposal of other investments | 0 | 0 | 3 | 0 | 3 | ||||||||||||||||||||||||
| Investments in associates and joint ventures | 0 | 0 | (5) | 0 | (5) | ||||||||||||||||||||||||
| Net loans repaid by (advanced to) associates and joint ventures | 17 | 4 | (1) | 0 | 20 | ||||||||||||||||||||||||
| Increase in investment in subsidiary | (16) | — | — | 16 | — | ||||||||||||||||||||||||
| Disposal (acquisition) of subsidiaries | 0 | (8) | 8 | 0 | 0 | ||||||||||||||||||||||||
| Interest received | 3 | 5 | 6 | 0 | 14 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities from continuing operations | 4 | 1 | (698) | 10 | (683) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities from discontinued operations | (46) | 0 | (8) | 0 | (54) | ||||||||||||||||||||||||
| Cash in subsidiaries sold and transferred to held for sale | 0 | 0 | (6) | 0 | (6) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities | (42) | 1 | (712) | 10 | (743) | ||||||||||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||||||||||||
| Increase in share capital | 0 | 0 | 16 | (16) | 0 | ||||||||||||||||||||||||
| Proceeds from borrowings | 130 | 0 | 38 | 0 | 168 | ||||||||||||||||||||||||
| Repayment of borrowings | (124) | 0 | (41) | 0 | (165) | ||||||||||||||||||||||||
| Finance costs paid | (10) | (102) | (31) | 6 | (137) | ||||||||||||||||||||||||
| Dividends paid | (28) | 0 | (15) | 0 | (43) | ||||||||||||||||||||||||
| Intergroup dividends received (paid) | 44 | 242 | (286) | 0 | 0 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities from continuing operations | 12 | 140 | (319) | (10) | (177) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities from discontinued operations | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities | 12 | 140 | (319) | (10) | (177) | ||||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 4 | 5 | 121 | (3) | 127 | ||||||||||||||||||||||||
| Translation | 1 | 0 | (4) | 3 | 0 | ||||||||||||||||||||||||
| Cash and cash equivalents at beginning of year | 7 | 97 | 225 | 0 | 329 | ||||||||||||||||||||||||
| Cash and cash equivalents at end of year | 12 | 102 | 342 | 0 | 456 | ||||||||||||||||||||||||
F - 99
| Figures in millions (US dollars) | 2016 | 2016 | 2016 | 2016 | 2016 | |||||||||
| Condensed consolidating statement of cash flow | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| Cash flows from operating activities | ||||||||||||||
| Cash generated from (used by) operations | 245 | (11 | ) | 1,106 | (38 | ) | 1,302 | |||||||
| Net movement in intergroup receivables and payables | (8 | ) | 169 | (163 | ) | 2 | — | |||||||
| Dividends received from joint ventures | — | 37 | — | — | 37 | |||||||||
| Taxation refund | 3 | — | 9 | — | 12 | |||||||||
| Taxation paid | (4 | ) | — | (161 | ) | — | (165 | ) | ||||||
| Net cash inflow (outflow) from operating activities | 236 | 195 | 791 | (36 | ) | 1,186 | ||||||||
| Cash flows from investing activities | ||||||||||||||
| Capital expenditure | (171 | ) | — | (535 | ) | — | (706 | ) | ||||||
| Expenditure on intangible assets | (2 | ) | — | (3 | ) | — | (5 | ) | ||||||
| Proceeds from disposal of tangible assets | — | — | 4 | — | 4 | |||||||||
| Other investments acquired | — | — | (73 | ) | — | (73 | ) | |||||||
| Proceeds from disposal of other investments | — | — | 61 | — | 61 | |||||||||
| Investments in associates and joint ventures | — | — | (11 | ) | — | (11 | ) | |||||||
| Proceeds from disposal of associates and joint ventures | — | 10 | — | — | 10 | |||||||||
| Net loans repaid by (advanced to) associates and joint ventures | — | (2 | ) | (2 | ) | — | (4 | ) | ||||||
| Disposal (acquisition) of subsidiaries | (6 | ) | (2 | ) | 2 | 6 | — | |||||||
| Decrease (increase) in cash restricted for use | 1 | — | 7 | — | 8 | |||||||||
| Interest received | 2 | — | 12 | — | 14 | |||||||||
| Net cash inflow (outflow) from investing activities | (176 | ) | 6 | (538 | ) | 6 | (702 | ) | ||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from issue of share capital | — | 6 | — | (6 | ) | — | ||||||||
| Proceeds from borrowings | 256 | 330 | 201 | — | 787 | |||||||||
| Repayment of borrowings | (291 | ) | (951 | ) | (91 | ) | — | (1,333 | ) | |||||
| Finance costs paid | (11 | ) | (145 | ) | (16 | ) | — | (172 | ) | |||||
| Bond settlement premium, RCF and bond transaction costs | — | (30 | ) | — | — | (30 | ) | |||||||
| Dividends paid | — | — | (15 | ) | — | (15 | ) | |||||||
| Intergroup dividends received (paid) | 7 | 399 | (406 | ) | — | — | ||||||||
| Net cash inflow (outflow) from financing activities | (39 | ) | (391 | ) | (327 | ) | (6 | ) | (763 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 21 | (190 | ) | (74 | ) | (36 | ) | (279 | ) | |||||
| Translation | 4 | — | (30 | ) | 36 | 10 | ||||||||
| Cash and cash equivalents at beginning of year | 19 | 222 | 243 | — | 484 | |||||||||
| Cash and cash equivalents at end of year | 44 | 32 | 139 | — | 215 | |||||||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
| Figures in millions (US dollars) | 2018 | 2018 | 2018 | 2018 | 2018 | ||||||||||||||||||||||||
| Condensed consolidating statement of cash flow | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | ||||||||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||||||||||||
| Cash generated from (used by) operations | (93) | (18) | 1,034 | 8 | 931 | ||||||||||||||||||||||||
| Net movement in intergroup receivables and payables | 73 | (215) | 130 | 12 | 0 | ||||||||||||||||||||||||
| Dividends received from joint ventures | 0 | 91 | 0 | 0 | 91 | ||||||||||||||||||||||||
| Taxation refund | 0 | 0 | 5 | 0 | 5 | ||||||||||||||||||||||||
| Taxation paid | 0 | 0 | (171) | 0 | (171) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities from continuing operations | (20) | (142) | 998 | 20 | 856 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities from discontinued operations | (27) | 0 | 28 | 0 | 1 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from operating activities | (47) | (142) | 1,026 | 20 | 857 | ||||||||||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||||||||||||
| Capital expenditure | 0 | 0 | (575) | 0 | (575) | ||||||||||||||||||||||||
| Proceeds from disposal of tangible assets | 0 | 0 | 4 | 6 | 10 | ||||||||||||||||||||||||
| Dividends from other investments | 2 | 0 | 0 | 0 | 2 | ||||||||||||||||||||||||
| Other investments acquired | 0 | 0 | (13) | 0 | (13) | ||||||||||||||||||||||||
| Proceeds from disposal of other investments | 0 | 0 | 7 | 0 | 7 | ||||||||||||||||||||||||
| Investments in associates and joint ventures | 0 | 0 | (8) | 0 | (8) | ||||||||||||||||||||||||
| Net loans repaid by (advanced to) associates and joint ventures | 9 | 10 | (2) | 0 | 17 | ||||||||||||||||||||||||
| Disposal (acquisition) of subsidiaries | 0 | (7) | 7 | 0 | 0 | ||||||||||||||||||||||||
| Decrease (increase) in cash restricted for use | 0 | 1 | (6) | (1) | (6) | ||||||||||||||||||||||||
| Interest received | 0 | 1 | 4 | 0 | 5 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities from continuing operations | 11 | 5 | (582) | 5 | (561) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities from discontinued operations | 207 | 0 | 19 | 0 | 226 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from investing activities | 218 | 5 | (563) | 5 | (335) | ||||||||||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||||||||||||
| Proceeds from borrowings | 407 | 45 | 301 | 0 | 753 | ||||||||||||||||||||||||
| Repayment of borrowings | (570) | (80) | (317) | 0 | (967) | ||||||||||||||||||||||||
| Finance costs paid | (12) | (102) | (16) | 0 | (130) | ||||||||||||||||||||||||
| Other borrowing costs | 0 | (10) | 0 | 0 | (10) | ||||||||||||||||||||||||
| Dividends paid | (24) | 0 | (15) | 0 | (39) | ||||||||||||||||||||||||
| Intergroup dividends received (paid) | 25 | 360 | (386) | 1 | 0 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities from continuing operations | (174) | 213 | (433) | 1 | (393) | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities from discontinued operations | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
| Net cash inflow (outflow) from financing activities | (174) | 213 | (433) | 1 | (393) | ||||||||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | (3) | 76 | 30 | 26 | 129 | ||||||||||||||||||||||||
| Translation | (1) | 0 | 22 | (26) | (5) | ||||||||||||||||||||||||
| Cash and cash equivalents at beginning of year | 11 | 21 | 173 | 0 | 205 | ||||||||||||||||||||||||
| Cash and cash equivalents at end of year | 7 | 97 | 225 | 0 | 329 | ||||||||||||||||||||||||
F - 100
| Figures in millions (US dollars) | 2015 | 2015 | 2015 | 2015 | 2015 | |||||||||
| Condensed consolidating statement of cash flow | AngloGold Ashanti (the “Guarantor”) | IOMco (the “Issuer”) | Other subsidiaries (the “Non-Guarantor Subsidiaries”) | Consolidation adjustments | Total | |||||||||
| Cash flows from operating activities | ||||||||||||||
| Cash generated from (used by) operations | 44 | (364 | ) | 1,115 | 455 | 1,250 | ||||||||
| Net movement in intergroup receivables and payables | 131 | 1,036 | (833 | ) | (334 | ) | — | |||||||
| Dividends received from joint ventures | — | 57 | — | — | 57 | |||||||||
| Taxation refund | 12 | — | 9 | — | 21 | |||||||||
| Taxation paid | (5 | ) | (1 | ) | (178 | ) | — | (184 | ) | |||||
| Net cash inflow (outflow) from operating activities from continuing operations | 182 | 728 | 113 | 121 | 1,144 | |||||||||
| Net cash inflow (outflow) from operating activities from discontinued operations | — | — | (5 | ) | — | (5 | ) | |||||||
| Net cash inflow (outflow) from operating activities | 182 | 728 | 108 | 121 | 1,139 | |||||||||
| Cash flows from investing activities | ||||||||||||||
| Capital expenditure | (194 | ) | — | (470 | ) | — | (664 | ) | ||||||
| Expenditure on intangible assets | (2 | ) | — | (1 | ) | — | (3 | ) | ||||||
| Proceeds from disposal of tangible assets | — | — | 6 | — | 6 | |||||||||
| Other investments acquired | — | — | (86 | ) | — | (86 | ) | |||||||
| Proceeds from disposal of other investments | 1 | — | 80 | — | 81 | |||||||||
| Investments in associates and joint ventures | — | — | (11 | ) | — | (11 | ) | |||||||
| Proceeds from disposal of associates and joint ventures | 1 | — | — | — | 1 | |||||||||
| Net loans repaid by (advanced to) associates and joint ventures | 2 | (5 | ) | — | — | (3 | ) | |||||||
| Net proceeds from disposal of subsidiaries and investments | — | — | 812 | — | 812 | |||||||||
| Cash in subsidiary disposed and transfers to held for sale | — | — | (2 | ) | — | (2 | ) | |||||||
| Disposal (acquisition) of subsidiaries | — | (1 | ) | 1 | — | — | ||||||||
| Decrease (increase) in cash restricted for use | — | (2 | ) | (15 | ) | — | (17 | ) | ||||||
| Interest received | 6 | 3 | 16 | — | 25 | |||||||||
| Net cash inflow (outflow) from investing activities from continuing operations | (186 | ) | (5 | ) | 330 | — | 139 | |||||||
| Net cash inflow (outflow) from investing activities from discontinued operations | — | — | (59 | ) | — | (59 | ) | |||||||
| Net cash inflow (outflow) from investing activities | (186 | ) | (5 | ) | 271 | — | 80 | |||||||
| Cash flows from financing activities | ||||||||||||||
| Proceeds from borrowings | 120 | 300 | 1 | — | 421 | |||||||||
| Repayment of borrowings | (127 | ) | (1,024 | ) | (137 | ) | — | (1,288 | ) | |||||
| Finance costs paid | (14 | ) | (223 | ) | (14 | ) | — | (251 | ) | |||||
| Bond settlement premium, RCF and bond transaction costs | — | (61 | ) | — | — | (61 | ) | |||||||
| Dividends paid | — | — | (5 | ) | — | (5 | ) | |||||||
| Intergroup dividends received (paid) | — | 247 | (247 | ) | — | — | ||||||||
| Net cash inflow (outflow) from financing activities from continuing operations | (21 | ) | (761 | ) | (402 | ) | — | (1,184 | ) | |||||
| Net cash inflow (outflow) from financing activities from discontinued operations | — | — | (2 | ) | — | (2 | ) | |||||||
| Net cash (outflow) inflow from financing activities | (21 | ) | (761 | ) | (404 | ) | — | (1,186 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | (25 | ) | (38 | ) | (25 | ) | 121 | 33 | ||||||
| Translation | (8 | ) | — | 112 | (121 | ) | (17 | ) | ||||||
| Cash and cash equivalents at beginning of year | 52 | 260 | 156 | — | 468 | |||||||||
| Cash and cash equivalents at end of year | 19 | 222 | 243 | — | 484 | |||||||||
PAGE LEFT BLANK INTENTIONALLY
F - 101
KIBALI (JERSEY) LIMITED
Consolidated Financial Statements for the Three Years Ended
31 December 20172020, 2019 and 2018
F - 102
CONTENTS
| PAGE | |||||
| Report of independent registered public accounting firm | F - 104 | ||||
| Consolidated statements of profit or loss and other comprehensive income for the years ended 31 December 2020, 2019 and 2018 | F - 105 | ||||
| Consolidated statements of financial position as at 31 December 2020, 2019 and 2018 | F - 106 | ||||
| Consolidated statements of changes in equity for the years ended 31 December 2020, 2019 and 2018 | F - 107 | ||||
| Consolidated statements of cash flows for the years ended 31 December 2020, 2019 and 2018 | F - 108 | ||||
| Statement of directors responsibilities | F - 109 | ||||
| Notes to the consolidated financial statements | F - 110 | ||||
F - 103
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Shareholders and Board of Directors
Kibali (Jersey) Limited,
Jersey, Channel Islands
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Kibali (Jersey) Limited (the “Company”)Company) and subsidiaries as of 31 December 2017, 20162020, 2019 and 2015,2018, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the three years in the period ended 31 December 2017,2020, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and subsidiaries at 31 December 2017, 20162020, 2019 and 2015,2018, and the results of their operations and their cash flows for each of the three years in the period ended 31 December 20172020, in conformity with International Financial Reporting Standards as Issuedissued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ BDO LLP
BDO LLP
We have served as the Company's auditor since 2013.
London, United Kingdom
F - 104
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED 31 DECEMBER 2017, 20162020, 2019 and 20152018
| 31 Dec | 31 Dec | 31 Dec | |||||||||||||||||||||||||||||||||
| Note | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | US$’000 | US$’000 | US$’000 | ||||||||||||||||||||||||||||||
| Note | $’000 | $’000 | $’000 | ||||||||||||||||||||||||||||||||
| REVENUE | REVENUE | ||||||||||||||||||||||||||||||||||
| Gold sales | 754 852 | 709,372 | 747,272 | Gold sales | 4 | 1,440,328 | 1,122,940 | 1,041,035 | |||||||||||||||||||||||||||
| Other income | 3 | 146 | 136 | 1,657 | Other income | 5 | 2,204 | 170 | 56,838 | ||||||||||||||||||||||||||
| TOTAL INCOME | 754 998 | 709,508 | 748,929 | TOTAL INCOME | 1,442,532 | 1,123,110 | 1,097,873 | ||||||||||||||||||||||||||||
| COSTS AND EXPENSES | COSTS AND EXPENSES | ||||||||||||||||||||||||||||||||||
| Mining and processing costs | 4 | 698 980 | 594,722 | 550,712 | Mining and processing costs | 6 | 670,138 | 688,796 | 772,259 | ||||||||||||||||||||||||||
| Royalties | 31 913 | 32,976 | 30,196 | Royalties | 67,547 | 52,792 | 45,249 | ||||||||||||||||||||||||||||
| Exploration and corporate expenditure | 5 | 8 205 | 6,398 | 8,248 | Exploration and corporate expenditure | 7 | 6,274 | 13,686 | 6,154 | ||||||||||||||||||||||||||
| Other expenses | 3 | 55 031 | 48,250 | 3,658 | Other expenses | 5 | 37,477 | 6,021 | 45,288 | ||||||||||||||||||||||||||
| TOTAL COSTS | 794 129 | 682,346 | 592,814 | TOTAL COSTS | 781,436 | 761,295 | 868,950 | ||||||||||||||||||||||||||||
| Finance income | 6 | 4 147 | 4,735 | 4,818 | Finance income | 8 | 6,912 | 4,370 | 3,380 | ||||||||||||||||||||||||||
| Finance costs | 6 | (5 478) | (5,298 | ) | (5,376 | ) | Finance costs | 8 | (6,460) | (3,973) | (4,465) | ||||||||||||||||||||||||
| Finance costs - net | (1 331) | (563 | ) | (558 | ) | ||||||||||||||||||||||||||||||
| Finance income/costs – net | Finance income/costs – net | 452 | 397 | (1,085) | |||||||||||||||||||||||||||||||
| Share of profits of equity accounted joint venture | 25 | 113 | 129 | 268 | Share of profits of equity accounted joint venture | 25 | 239 | 34 | 132 | ||||||||||||||||||||||||||
| (LOSS) / PROFIT BEFORE INCOME TAX | (40 349) | 26,728 | 155,825 | ||||||||||||||||||||||||||||||||
| Income tax benefit / (expense) | 7 | 54 333 | 22,962 | (17,840 | ) | ||||||||||||||||||||||||||||||
| PROFIT BEFORE INCOME TAX | PROFIT BEFORE INCOME TAX | 661,788 | 362,246 | 227,970 | |||||||||||||||||||||||||||||||
| Income tax expense | Income tax expense | 9 | (157,090) | (61,934) | (15,972) | ||||||||||||||||||||||||||||||
| PROFIT FOR THE YEAR | 13 984 | 49,690 | 137,985 | PROFIT FOR THE YEAR | 504,698 | 300,312 | 211,998 | ||||||||||||||||||||||||||||
| OTHER COMPREHENSIVE INCOME/(EXPENSE) | |||||||||||||||||||||||||||||||||||
| (Loss) / gain on available for sale financial asset | (33 | ) | 13 | (29 | ) | ||||||||||||||||||||||||||||||
| Recycling of permanent losses on available-for-sale asset | — | — | 3,173 | ||||||||||||||||||||||||||||||||
| OTHER COMPREHENSIVE EXPENSE | OTHER COMPREHENSIVE EXPENSE | ||||||||||||||||||||||||||||||||||
| Gain/(Loss) on investment in marketable securities | Gain/(Loss) on investment in marketable securities | 6 | (5) | (17) | |||||||||||||||||||||||||||||||
| TOTAL COMPREHENSIVE INCOME | TOTAL COMPREHENSIVE INCOME | 13 951 | 49,703 | 141,129 | TOTAL COMPREHENSIVE INCOME | 504,704 | 300,307 | 211,981 | |||||||||||||||||||||||||||
| PROFIT FOR THE YEAR | PROFIT FOR THE YEAR | ||||||||||||||||||||||||||||||||||
| Attributable to: | Attributable to: | ||||||||||||||||||||||||||||||||||
| Owners of the parent | 26 341 | 57,537 | 135,883 | Owners of the parent | 472,533 | 288,401 | 207,750 | ||||||||||||||||||||||||||||
| Non-controlling interest | (12 357) | (7,847 | ) | 2,102 | Non-controlling interest | 32,164 | 11,911 | 4,248 | |||||||||||||||||||||||||||
| 13 984 | 49,690 | 137,985 | 504,697 | 300,312 | 211,998 | ||||||||||||||||||||||||||||||
| TOTAL COMPREHENSIVE INCOME | TOTAL COMPREHENSIVE INCOME | TOTAL COMPREHENSIVE INCOME | |||||||||||||||||||||||||||||||||
| Attributable to: | Attributable to: | ||||||||||||||||||||||||||||||||||
| Owners of the parent | 26 308 | 57,550 | 139,027 | Owners of the parent | 472,539 | 288,396 | 207,733 | ||||||||||||||||||||||||||||
| Non-controlling interest | (12 357) | (7,847 | ) | 2,102 | Non-controlling interest | 32,164 | 11,911 | 4,248 | |||||||||||||||||||||||||||
| 13 951 | 49,703 | 141,129 | 504,703 | 300,307 | 211,981 | ||||||||||||||||||||||||||||||
The accompanying notes form part of these consolidated financial statements
F - 105
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017, 20162020, 2019 and 20152018
| 31 Dec | 31 Dec | 31 Dec | |||||||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | Note | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||
| Note | $’000 | $’000 | $’000 | US$’000 | US$’000 | US$’000 | |||||||||||||||||||||||||||||
| NON-CURRENT ASSETS | NON-CURRENT ASSETS | ||||||||||||||||||||||||||||||||||
| Property, plant and equipment | 8 | 2 107 718 | 2,068,306 | 2,012,303 | Property, plant and equipment | 10 | 1,846,746 | 1,892,847 | 1,988,533 | ||||||||||||||||||||||||||
| Mineral properties | 9 | 519 117 | 576,536 | 634,394 | Mineral properties | 11 | 366,053 | 404,432 | 454,479 | ||||||||||||||||||||||||||
| Long term ore stockpiles | 12 | 12 779 | 43,771 | 43,162 | Long term ore stockpiles | 14 | 36,875 | 52,685 | 28,510 | ||||||||||||||||||||||||||
| Investment in equity accounted joint venture | 25 | 255 | 142 | 289 | Investment in equity accounted joint venture | 25 | 550 | 343 | 387 | ||||||||||||||||||||||||||
| Other investments in joint venture | 25 | 25 577 | 28,830 | 31,086 | Other investments in joint venture | 25 | 22,790 | 20,795 | 21,479 | ||||||||||||||||||||||||||
| Total investment in joint venture | 25 | 25 832 | 28,972 | 31,375 | Total investment in joint venture | 25 | 23,340 | 21,138 | 21,866 | ||||||||||||||||||||||||||
| Trade and other receivables | 11 | 125 294 | 87,435 | 32,788 | Trade and other receivables | 13 | 185,768 | 140,987 | 137,852 | ||||||||||||||||||||||||||
| Deferred tax asset | 10 | 43,237 | — | — | Deferred tax asset | 12 | — | 9,647 | 27,265 | ||||||||||||||||||||||||||
| TOTAL NON-CURRENT ASSETS | 2,833,977 | 2,805,020 | 2,754,022 | TOTAL NON-CURRENT ASSETS | 2,458,782 | 2,521,736 | 2,658,505 | ||||||||||||||||||||||||||||
| CURRENT ASSETS | CURRENT ASSETS | ||||||||||||||||||||||||||||||||||
| Inventories and ore stockpiles | 12 | 73 231 | 72,505 | 78,598 | Inventories and ore stockpiles | 14 | 90,487 | 95,003 | 93,036 | ||||||||||||||||||||||||||
| Trade and other receivables | 11 | 92 991 | 107,025 | 180,724 | Trade and other receivables | 13 | 29,699 | 89,047 | 112,982 | ||||||||||||||||||||||||||
| Available-for-sale financial asset | 13 | 26 | 58 | 45 | |||||||||||||||||||||||||||||||
| Investment in marketable securities | Investment in marketable securities | 9 | 3 | 9 | |||||||||||||||||||||||||||||||
| Cash and cash equivalents | 3 288 | 18,865 | 21,373 | Cash and cash equivalents | 22 | 944,233 | 452,692 | 123,931 | |||||||||||||||||||||||||||
| TOTAL CURRENT ASSETS | 169 536 | 198,453 | 280,740 | TOTAL CURRENT ASSETS | 1,064,428 | 636,745 | 329,958 | ||||||||||||||||||||||||||||
| TOTAL ASSETS | 3 003 513 | 3,003,473 | 3,034,762 | TOTAL ASSETS | 3,523,210 | 3,158,481 | 2,988,463 | ||||||||||||||||||||||||||||
| EQUITY AND LIABILITIES | EQUITY AND LIABILITIES | ||||||||||||||||||||||||||||||||||
| EQUITY | |||||||||||||||||||||||||||||||||||
| Equity | Equity | ||||||||||||||||||||||||||||||||||
| Share capital | 14 | 5 | 5 | 5 | Share capital | 15 | 5 | 5 | 5 | ||||||||||||||||||||||||||
| Share premium | 2 523 612 | 2,493,612 | 2,493,612 | Share premium | 15 | 2,523,612 | 2,523,612 | 2,523,612 | |||||||||||||||||||||||||||
| Retained earnings | 293 821 | 267,480 | 269,943 | Retained earnings | 655,005 | 462,972 | 324,571 | ||||||||||||||||||||||||||||
| Other reserve | (20 | ) | 13 | — | Other reserve | (36) | (42) | (37) | |||||||||||||||||||||||||||
| Equity attributable to owners of the parent | 2 817 418 | 2,761,110 | 2,763,560 | Equity attributable to owners of the parent | 3,178,586 | 2,986,547 | 2,848,151 | ||||||||||||||||||||||||||||
| Non-controlling interest | 15 | 7 420 | 19,777 | 27,624 | Non-controlling interest | 16 | 55,743 | 23,579 | 11,668 | ||||||||||||||||||||||||||
| TOTAL EQUITY | 2 824 838 | 2,780,887 | 2,791,184 | TOTAL EQUITY | 3,234,329 | 3,010,126 | 2,859,819 | ||||||||||||||||||||||||||||
| NON-CURRENT LIABILITIES | NON-CURRENT LIABILITIES | ||||||||||||||||||||||||||||||||||
| Loans and borrowings | 16 | 41 210 | 46,929 | 51,747 | |||||||||||||||||||||||||||||||
| Deferred tax liabilities | 10 | — | 11,096 | 41,926 | |||||||||||||||||||||||||||||||
Loans and borrowings 1 | Loans and borrowings 1 | 17 | — | 1,507 | 1,526 | ||||||||||||||||||||||||||||||
| Lease liabilities | Lease liabilities | 17 | 50,457 | 43,821 | 27,465 | ||||||||||||||||||||||||||||||
| Deferred tax liability | Deferred tax liability | 12 | 89,609 | — | — | ||||||||||||||||||||||||||||||
| Provision for rehabilitation | 17 | 23 244 | 21,163 | 15,533 | Provision for rehabilitation | 18 | 28,364 | 25,516 | 23,640 | ||||||||||||||||||||||||||
| TOTAL NON-CURRENT LIABILITIES | 64 454 | 79,188 | 109,206 | TOTAL NON-CURRENT LIABILITIES | 168,430 | 70,844 | 52,631 | ||||||||||||||||||||||||||||
| CURRENT LIABILITIES | CURRENT LIABILITIES | ||||||||||||||||||||||||||||||||||
| Loans and borrowings | 16 | 7 596 | 10,285 | 9,808 | |||||||||||||||||||||||||||||||
| Lease liabilities | Lease liabilities | 17 | 14,674 | 11,105 | 11,425 | ||||||||||||||||||||||||||||||
| Trade and other payables | 18 | 104 633 | 131,859 | 117,083 | Trade and other payables | 19 | 66,881 | 45,460 | 59,770 | ||||||||||||||||||||||||||
| Provision for rehabilitation | Provision for rehabilitation | 18 | 803 | 1,024 | — | ||||||||||||||||||||||||||||||
| Current tax payable | 1 992 | 1,254 | 7,481 | Current tax payable | 38,093 | 19,922 | 4,818 | ||||||||||||||||||||||||||||
| TOTAL CURRENT LIABILITIES | 114 221 | 143,398 | 134,372 | TOTAL CURRENT LIABILITIES | 120,451 | 77,511 | 76,013 | ||||||||||||||||||||||||||||
| TOTAL EQUITY AND LIABILITIES | 3 003 513 | 3,003,473 | 3,034,762 | TOTAL EQUITY AND LIABILITIES | 3,523,210 | 3,158,481 | 2,988,463 | ||||||||||||||||||||||||||||
The consolidated financial statements were approved by the Board of Directors on 26 March 2021 and signed on its behalf by:
| Graham Shuttleworth | ||||||||
| Director | ||||||||
The accompanying notes form part of these consolidated financial statements.statements
F - 106
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| $’000 | Share Capital | Share Premium | Retained earnings | Other Reserves | Total equity attributable to owners of the parent | Non- Controlling Interest | Total Equity | |||||||||||||
| Balance at 1 January 2015 | 5 | 2,493,612 | 204,060 | (3,144 | ) | 2,694,533 | 25,522 | 2,720,055 | ||||||||||||
| Fair value movement on available-for-sale financial asset | — | — | — | (29 | ) | (29 | ) | — | (29 | ) | ||||||||||
| Recycling of permanent losses on available-for-sale asset | — | — | — | 3,173 | 3,173 | — | 3,173 | |||||||||||||
| Total other comprehensive expense | — | — | — | 3,144 | 3,144 | — | 3,144 | |||||||||||||
| Net profit for the year | — | — | 135,883 | — | 135,883 | 2,102 | 137,985 | |||||||||||||
| Total comprehensive income | — | — | 135,883 | 3,144 | 139,027 | 2,102 | 141,129 | |||||||||||||
| Diivdends | — | — | (70,000 | ) | — | (70,000 | ) | — | (70,000 | ) | ||||||||||
| Balance at 31 December 2015 | 5 | 2,493,612 | 269,943 | — | 2,763,560 | 27,624 | 2,791,184 | |||||||||||||
| Balance at 1 January 2016 | 5 | 2,493,612 | 269,943 | — | 2,763,560 | 27,624 | 2,791,184 | |||||||||||||
| Fair value movement on available-for-sale financial asset | — | — | — | 13 | 13 | — | 13 | |||||||||||||
| Total other comprehensive income | — | — | — | 13 | 13 | — | 13 | |||||||||||||
| Net profit/(loss) for the year | — | — | 57,537 | — | 57,537 | (7,847 | ) | 49,690 | ||||||||||||
| Total comprehensive income/(expense) | — | — | 57,537 | 13 | 57,550 | (7,847 | ) | 49,703 | ||||||||||||
| Dividends | — | — | (60,000 | ) | — | (60,000 | ) | — | (60,000 | ) | ||||||||||
| Balance at 31 December 2016 | 5 | 2,493,612 | 267,480 | 13 | 2,761,110 | 19,777 | 2,780,887 | |||||||||||||
| Balance at 1 January 2017 | 5 | 2,493,612 | 267,480 | 13 | 2,761,110 | 19,777 | 2,780,887 | |||||||||||||
| Fair value movement on available-for-sale financial asset | — | — | — | (33 | ) | (33 | ) | — | (33 | ) | ||||||||||
| Total other comprehensive expense | — | — | — | (33 | ) | (33 | ) | — | (33 | ) | ||||||||||
| Net profit/(loss) for the year | — | — | 26,341 | — | 26,341 | (12,357 | ) | 13,984 | ||||||||||||
| Total comprehensive income/(expense) | — | — | 26,341 | (33 | ) | 26,308 | (12,357 | ) | 13,951 | |||||||||||
| Shares issued (note 14) | — | 30,000 | — | — | 30,000 | — | 30,000 | |||||||||||||
| Balance at 31 December 2017 | 5 | 2,523,612 | 293,821 | (20 | ) | 2,817,418 | 7,420 | 2,824,838 | ||||||||||||
| Total equity | |||||||||||||||||||||||
| attributable | Non- | ||||||||||||||||||||||
| US$’000 | Share | Share | Retained | Other | to owners of | controlling | Total | ||||||||||||||||
| capital | premium | earnings | reserves | the parent | interest | equity | |||||||||||||||||
| Balance at 1 January 2018 | 5 | 2,523,612 | 293,821 | (20) | 2,817,418 | 7,420 | 2,824,838 | ||||||||||||||||
| Fair value movement on investment in marketable securities | — | — | — | (17) | (17) | — | (17) | ||||||||||||||||
| Total other comprehensive expense | — | — | — | (17) | (17) | — | (17) | ||||||||||||||||
| Net profit for the year | — | — | 207,750 | — | 207,750 | 4,248 | 211,998 | ||||||||||||||||
| Total comprehensive income/(expense) | — | — | 207,750 | (17) | 207,733 | 4,248 | 211,981 | ||||||||||||||||
Dividend paid (1) | — | — | (177,000) | — | (177,000) | — | (177,000) | ||||||||||||||||
| Balance at 31 December 2018 | 5 | 2,523,612 | 324,571 | (37) | 2,848,151 | 11,668 | 2,859,819 | ||||||||||||||||
| Balance at 1 January 2019 | 5 | 2,523,612 | 324,571 | (37) | 2,848,151 | 11,668 | 2,859,819 | ||||||||||||||||
| Fair value movement on investment in marketable securities | — | — | — | (5) | (5) | — | (5) | ||||||||||||||||
| Total other comprehensive expense | — | — | — | (5) | (5) | — | (5) | ||||||||||||||||
| Net profit for the year | — | — | 288,401 | — | 288,401 | 11,911 | 300,312 | ||||||||||||||||
| Total comprehensive income/(expense) | — | — | 288,401 | (5) | 288,396 | 11,911 | 300,307 | ||||||||||||||||
Dividend paid (1) | — | — | (150,000) | — | (150,000) | — | (150,000) | ||||||||||||||||
| Balance at 31 December 2019 | 5 | 2,523,612 | 462,972 | (42) | 2,986,547 | 23,579 | 3,010,126 | ||||||||||||||||
| Balance at 1 January 2020 | 5 | 2,523,612 | 462,972 | (42) | 2,986,547 | 23,579 | 3,010,126 | ||||||||||||||||
| Fair value movement on investment in marketable securities | — | — | — | 6 | 6 | — | 6 | ||||||||||||||||
| Total other comprehensive income | — | — | — | 6 | 6 | — | 6 | ||||||||||||||||
| Net profit for the year | — | — | 472,533 | — | 472,533 | 32,164 | 504,697 | ||||||||||||||||
| Total comprehensive income | — | — | 472,533 | 6 | 472,539 | 32,164 | 504,703 | ||||||||||||||||
Dividend paid (1) | — | — | (280,500) | — | (280,500) | — | (280,500) | ||||||||||||||||
| Balance at 31 December 2020 | 5 | 2,523,612 | 655,005 | (36) | 3,178,586 | 55,743 | 3,234,329 | ||||||||||||||||
SHARE CAPITAL
The share capital comprises the issued ordinary shares of the companyCompany at par.
SHARE PREMIUM
The share premium comprises the excess value recognised from the issue of ordinary shares at par.
RETAINED EARNINGS
Retained earnings comprises the Group’s cumulative accounting profits and losses since inception less
dividends.
OTHER RESERVES
Other reserves comprises the Group’s cumulative fair value movement on the available-for sale financial assetinvestment in marketable securities since inception in Kilo Goldmines Limited less amounts reclassified to profit and loss.
NON-CONTROLLING INTEREST
The non-controlling interest represents the total carrying value of the 10% interest Société Minière de Kilo-Moto (“SOKIMO”)Kilo- Moto SA UNISARL (SOKIMO) has in Kibali Goldmines SA (Kibali)("Kibali"), which is a subsidiary of Kibali (Jersey) Limited.
The accompanying notes form part of these consolidated financial statements.statements
(1) This balance relates to dividends declared and fully paid up to Shareholders in the period.
F - 107
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2017, 20162020, 2019 and 20152018
| 2017 | 2016 | 2015 | |||||||
| Note | $’000 | $’000 | $’000 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Cash generated by operations | 23 | 225 429 | 272,950 | 369,658 | |||||
| Interest received | 2 701 | 3,400 | 3,591 | ||||||
| Finance cost paid | (4 856) | (4,637 | ) | (4,198 | ) | ||||
| Dividends received from equity accounted joint venture | 25 | — | 276 | — | |||||
| Income tax paid | (1 796) | (8,973 | ) | (13,148 | ) | ||||
| Net cash flows generated by operating activities | 221 478 | 263,016 | 355,903 | ||||||
| CASH FLOWS RELATED TO INVESTING ACTIVITIES | |||||||||
| Additions of property, plant and equipment | (256 208) | (213,570 | ) | (286,905 | ) | ||||
| Repayment of loan from equity accounted joint venture | 3 170 | 2,555 | 423 | ||||||
| Net cash outflows used in investing activities | (253 038) | (211,015 | ) | (286,482 | ) | ||||
| CASH FLOWS RELATING TO FINANCING ACTIVITIES | |||||||||
| Proceeds from issue of ordinary shares | 30 000 | — | — | ||||||
| Distribution of dividends | (8 000) | (52,000 | ) | (70,000 | ) | ||||
| Decrease in loans and borrowings | (7 228) | (6,714 | ) | (6,302 | ) | ||||
| Net cash inflows/(outflows) provided by financing activities | 14 772 | (58,714 | ) | (76,302 | ) | ||||
| Net decrease in cash and cash equivalents | (16 788) | (6,713 | ) | (6,881 | ) | ||||
| Cash and cash equivalents at the beginning of the year | 7 314 | 14,027 | 20,908 | ||||||
| Cash and cash equivalents at the end of the year | (9 474) | 7,314 | 14,027 | ||||||
| Cash and cash equivalents include the following for the purpose of the consolidated statement of cash flow: | |||||||||
| Cash and cash equivalents | 3 288 | 18,865 | 21,373 | ||||||
| Bank overdrafts | 18 | (12 762) | (11,551 | ) | (7,346 | ) | |||
| Cash and cash equivalents | (9 474) | 7,314 | 14,027 | ||||||
| 31 Dec | 31 Dec | 31 Dec | |||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||
| US$’000 | US$’000 | US$’000 | |||||||||||||||||||||||||||||||||
| Cash Flows From Operating Activities | |||||||||||||||||||||||||||||||||||
| Cash generated by operations | 23 | 956,870 | 615,431 | 473,208 | |||||||||||||||||||||||||||||||
| Interest received | 4,158 | 2,683 | 1,814 | ||||||||||||||||||||||||||||||||
| Finance cost paid | (299) | (715) | (515) | ||||||||||||||||||||||||||||||||
| Dividends received from equity | |||||||||||||||||||||||||||||||||||
| accounted joint venture | 25 | 65 | 156 | — | |||||||||||||||||||||||||||||||
| Income tax paid | (32,121) | (6,193) | — | ||||||||||||||||||||||||||||||||
| Net cash flows generated by operating activities | 928,673 | 611,362 | 474,507 | ||||||||||||||||||||||||||||||||
| Cash Flows Related to Investing Activities | |||||||||||||||||||||||||||||||||||
| Additions of property, plant and equipment | (132,229) | (120,202) | (155,298) | ||||||||||||||||||||||||||||||||
| Drawdowns, interest and capital repayments from equity accounted joint venture | (468) | 1,900 | 4,098 | ||||||||||||||||||||||||||||||||
| Net cash flows used in investing activities | (132,697) | (118,302) | (151,200) | ||||||||||||||||||||||||||||||||
| Cash Flows Relating to Financing Activities | |||||||||||||||||||||||||||||||||||
| Payment of dividends | (280,500) | (150,000) | (177,000) | ||||||||||||||||||||||||||||||||
| Principal paid on lease liabilities | (20,753) | (11,110) | (9,579) | ||||||||||||||||||||||||||||||||
| Interest paid on lease liabilities | (3,182) | (3,153) | (3,359) | ||||||||||||||||||||||||||||||||
| Net cash outflows through financing activities | (304,435) | (164,263) | (189,938) | ||||||||||||||||||||||||||||||||
| Net increase in cash and cash equivalents | 491,541 | 328,797 | 133,369 | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents at the beginning of the year | 452,692 | 123,895 | (9,474) | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents at the end of the year | 944,233 | 452,692 | 123,895 | ||||||||||||||||||||||||||||||||
Cash and cash equivalents include the following for the purpose of the consolidated statement of cash flow:
| Cash and cash equivalents | 944,233 | 452,692 | 123,931 | |||||||||||||||||||||||
| Bank overdrafts | 19 | — | — | (36) | ||||||||||||||||||||||
| Cash and cash equivalents | 944,233 | 452,692 | 123,895 | |||||||||||||||||||||||
Bank overdrafts are classified as cash and cash equivalents as they form an integral part of cash management and fluctuate from positive to overdrawn.
The accompanying notes form part of these consolidated financial statements.statements
F - 108
1. STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing these special purpose consolidated financial statements for Kibali (Jersey) Limited and its subsidiaries as at December 31, 2020, 2019 and 2018 and for each of the three years in the period ended December 31, 2020, in conformity with lnternational Financial Reporting Standards as issued by the lnternational Accounting Standards Board. The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the group, and for identifying and ensuring that the group complies with the law and regulations applicable to their activities. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors confirm that suitable accounting policies have been used and applied consistently for the periods presented. They also confirm that reasonable and prudent judgments and estimates have been made in preparing these special purposes consolidated financial statements and that applicable accounting standards have been followed.
F - 109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
BASIS OF PREPARATION
The consolidated financial statements of Kibali (Jersey) Limited (the Company) and its subsidiaries and joint venture (the Group) have been prepared in accordance with International Financial Reporting Standards and Interpretations (collectively (IFRS)) issued by the International Accounting Standards Board (IASB).
The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.investment in marketable securities classified as fair value through other comprehensive income. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a high degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in note 2.3.
On March 11, 2020, the Covid-19 outbreak was declared a pandemic by the World Health Organization. The outbreak and available facilities.efforts to contain it have had a significant effect on commodity prices and capital markets. We have adopted certain operating procedures to respond to Covid-19, and to date, our operations have not been significantly impacted by the pandemic.
NEW STANDARDS AND INTERPRETATIONS APPLIED
The IASB has issued the following new standards, amendments to published standards and interpretations to existing standards with effective dates on or prior to 1 January 20172020 which have been adopted by the Group for the first time this year. These have not had a material impact.
Effective period commencing on or after | ||||||||||||
| Amendments to Existing Standards | ||||||||||||
| IFRS | Amendments to IFRS 3 Business Combinations: Definition of a Business | |||||||||||
| IAS 1 and IAS 8 | Amendments to IAS 1 and IAS 8: Definition of Material | 1 Jan 2020 | ||||||||||
| IFRS 9, IAS 37 and IFRS 7 | Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform | |||||||||||
| Amendments to References to the Conceptual Framework in IFRS Standards | ||||||||||||
F - 110
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NEW STANDARDS EFFECTIVE IN FUTURE PERIODAND INTERPRETATIONS APPLIED (CONTINUED)
Certain new standards, amendments and interpretations to existing standards have been published thatand are relevant to the Group’s activities and are mandatory for the Group’s accounting periods beginning after 1 January 20182020, or later periods and which the Group has decided not to adopt early.early adopt. These include:include the following, and are not expected to have any material impact:
Effective period commencing on or after | ||||||||||
| IFRS 17 | Insurance contracts including amendments to IFRS 17 | 01-Jan-23 | ||||||||
| Amendments to IAS 1: Classification of Liabilities as Current or Non-current | ||||||||||
| IFRS 3, IAS 16 and IAS37 | Amendments to IFRS 3: Business Combinations, IAS 16: Property, Plant and Equipment and IAS 37: Provisions, Contingency Liabilities and Contingency Assets | 01-Jan-22 | ||||||||
| IFRS | Annual Improvements to IFRS (2018-2020 Cycle) | |||||||||
| IFRS 16 | ||||||||||