AngloGold Ashanti estimates it will lose about 30,000 oz of gold production due to an earthquake-caused
shutdown and restart of its Vaal River district mines in South Africa, including the Great Noligwa mine,
shown here. No underground fatalities occurred during the quakes. (Photo courtesy AngloGold)

AngloGold Ashanti reported on August 11 that it was restarting its Great Noligwa and Moab Khotsong mines in the Vaal River district of South Africa, where operations were halted on August 5 following a 5.3-magnitude earthquake. The quake was one of South Africa’s largest in the past decade and was felt as far away as Mozambique and Botswana. The epicenter was about 10 km below ground near the town of Orkney in the Northwest province. One man, not a miner, was reportedly killed on the surface by a collapsing wall.

AngloGold’s Vaal River mines are among the world’s deepest. The company was restarting the mines in a phased fashion, following evaluation of seismic activity in the area and after thorough inspections of vertical shafts and horizontal underground infrastructure. Repairs to affected areas and equipment were ongoing.

Based on likely power-supply scenarios and assuming no further tremors that would affect production, AngloGold estimated that the interruption to operations would result in about 30,000 oz of lost gold output. This loss also included downtime at the Mine Waste Solutions surface operation, which was affected by an extended power interruption, and also downtime at the neighboring Kopanang mine, which was taken offline to undertake a precautionary inspection of infrastructure.

In total, 3,300 people were working underground in the AngloGold mines when the earthquake occurred. All were safely hoisted to surface within seven hours of the event. Twenty-eight people were treated for minor injuries and discharged, while trauma counseling was provided to those employees and contractors who required it.

AngloGold also was actively involved with local government and civic organizations in providing assistance where necessary to local communities recovering from the earthquake.

AngloGold Ashanti is a global gold producer with 20 operations in 10 countries. In 2013, the company produced 4.1 million oz of gold at a total cash cost of $830/oz. During the year, Moab Khotsong produced 212,000 oz and Great Noligwa produced 83,000 oz. Together, the two mines accounted for roughly 7% of AngloGold Ashanti’s production in 2013.

In other news from AngloGold Ashanti, the company reported significant improvement in its second-quarter 2014 operating and financial results in comparison with the second quarter of 2013: production was up 17%, all-in sustaining costs fell 19%, corporate and marketing costs were down 65%, exploration and evaluation costs were 58% lower, capital expenditures were down 44%, all-in costs were down 29%, and EBITDA was up 33%. These results helped turn around a cash burn of $488 million in the second quarter of 2013 to a positive cash flow of $34 million in the second quarter of 2014, notwithstanding a $132/oz drop in the gold price.