| Mon 3 May 2004, 8:34 | | AngloGold Ashanti to target global growth as merge |
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AngloGold Ashanti to target global growth as merger beds down
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New entity looks at China, Russia, Mongolia
Resources Editor
A DRIVE for growth will follow the finalisation of last week's merger of AngloGold and Ashanti, which will create one of the world's largest gold producers, says Bobby Godsell, CE of the new entity.
Addressing a shareholders' annual meeting in Johannesburg last week, Godsell said that the new AngloGold Ashanti, as the enlarged company has been renamed, was planning to grow partly by expanding into countries where it did not yet have a presence. These included China, Russia and Mongolia.
He said the company's president, Sam Jonah, would be taking responsibility for growth through greenfields operations and new business, which would include teaming up with gold exploration outfits and junior mining companies.
"Sam Jonah's team will be refining and developing strategies to enter important new gold regions," said Godsell.
An AngloGold Ashanti spokesman confirmed that the combined company was seeking expansion into "important new frontiers", with China and Mongolia already identified, while the company was still learning more about opportunities in Russia.
Godsell said that while work would continue to bed down the Ashanti merger, "we are not putting up a closed for business' sign on any doors or windows. There is no sign of our mergers and acquisition department saying they have gone fishing."
AngloGold Ashanti already had an office in Beijing, and would look for synergies with Anglo American, which is also increasing its focus on China.
Godsell also said that the merger would enable new investment in Ashanti's operations "from the newly enriched asset base of the new company" with the prospect of a growth in production.
"I am excited about the exploration prospects that our combined exploration team can now focus on Ghana, Guinea, Mali and Tanzania, and also in the higher risk Congo," he said.
The combined group is also undertaking a major review of its costs, in a bid to secure new savings.
An analyst says that in going for new growth, AngloGold Ashanti would be building on an operation that already had 26 mines in 11 countries, and was one of the few gold companies to already deliver regular forecasts of production with a reasonable confidence that it could meet them.
Another analyst notes that while the announcement of a further global expansion strategy might sound impressive, it was driven by necessity.
"Even if you are the largest gold producer in the world, you still need to keep replenishing your reserves, as the life of any gold mine is finite," he says.
"This is a big challenge, as places like SA, North America, most of South America and Australia have been extensively surveyed.
"So you may well need to also look at places like Russia, China and outer Mongolia, which are not as well surveyed, for greenfields projects."
