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Anglogold Ashanti - Updates guidance on power shortage in Ghana
AngloGold Ashanti Limited
Incorporated in the Republic of South Africa
Registration Number: 1944/017354/06)
ISIN Number:ZAE000043485
JSE Share Code: ANG
("AngloGold Ashanti" or "the Company")
AngloGold Ashanti updates guidance on power shortage in Ghana
In discussions between the Volta River Authority (VRA) and the Chamber
of Mines in Ghana, the industry has agreed to collaborate with the
authority and the Government in a range of activities designed to minimise
the impact of the power shortage on the economy and the mining industry and
provide for a sustainable solution for the future.
In the short term, although there are indications that the water level
of the Akosombo Dam is beginning to rise, the Chamber and its members have
undertaken to assist with expediting the repair of the thermal unit at the
Aboadze plant in Takoradi.
In the longer term, Chamber member companies have offered project and
logistical management capacity to assist with the repair and maintenance of
various facilities and with the construction of additional permanent energy
capacity in the country.
In respect of AngloGold Ashanti"s Ghanaian operations, the following
should be noted.
Obuasi is currently achieving power savings from the grid in the region
of 25% without substantial production losses. Standby power is being
generated by diesel-driven generator sets, at a cost of some $1.8m per
month. This is not a sustainable solution due to the reliability of the
generator sets and the risks associated with reliance on deliveries of
diesel fuel by road transport. In the event that a significantly higher cut
in power became necessary, this would result in a substantial loss in gold
production. In the event that the 25% power reduction continues for the
remainder of this month, we are forecasting production at Obuasi for the
quarter of approximately 90,000oz, some 10,000oz down on our previous
expectation.
As a surface operation, Iduapriem"s production is more sensitive to
power reductions as some 60% of the energy consumption is consumed by the
mills. Because of this, a reduction in power consumption of 25% would
result in a 30% reduction in production, while a cut of more than 25% is
likely to result in stopping the operation"s remaining mill, leading to a
shut down of the mine. The company is in ongoing discussions with the
Electricity Company of Ghana (ECG) regarding potential reductions in power
consumption. Thus while Iduapriem is currently on track with its budgeted
production for the quarter, a 25% cut in power would result in a reduction
in production from around 52,000oz to approximately 48,000oz, for the third
quarter.
At Bibiani, in terms of a daily power management agreement with the ECG
that has the effect of reducing consumption by around 25%, the mine will be
able to mill close to its daily target and it is possible that production
for the month will not be significantly affected by this situation.
Budgeted production and costs for the quarter therefore remain on track.
JSE Sponsor - UBS
ends
Johannesburg
6 September 2006
Queries
South Africa Tel: Mobile:
Charles Carter +27(0)11 637 6385 +27(0)82 3305373
E-mail: cecarter@AngloGoldAshanti.com
Steve Lenahan +27(0)11 637 6284 +27(0)83 3082200
slenahan@AngloGoldAshanti.com
Date: 06/09/2006 02:05:57 PM Produced by the JSE SENS Department
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