AngloGold Ashanti Ltd. lowered this year’s production outlook after suspending gold processing at a plant in Brazil while work is undertaken to strengthen a tailings facility.
(Bloomberg) — AngloGold Ashanti Ltd. lowered this year’s production outlook after suspending gold processing at a plant in Brazil while work is undertaken to strengthen a tailings facility.
The Johannesburg-based miner expects to produce 2.45 million ounces to 2.6 million ounces of gold this year, compared to last year’s output of 2.7 million it said in a statement Wednesday. AngloGold shares fell 3.9% as of 10:25 a.m. local time.
AngloGold suspended tailings deposition at Calcinados after starting buttressing work. The facility processed gold from the Cuiabá Mine Complex, which produced 241,000 ounces last year. While AngloGold said the tailings facility is safe, it added that the buttressing is aimed at meeting Canadian standards, which are considered best practice.
The collapse of a dam operated by Brazil’s Vale SA in 2019 killed hundreds of people, prompting greater scrutiny of dams around the world and how they’re maintained. About 10% of the world’s 1,635 tailings dams have had stability issues at some stage, according to a survey that followed the disaster.
“The remedial tailings work appears to be due to AngloGold prudence to avoid reputational damage in Brazil as seen with historical tailings accidents in-country,” RMB Morgan Stanley analysts said in a note.
Engineering studies will indicate when the work at the tailings facility would be completed, Chief Executive Officer Alberto Calderon said on a conference call. AngloGold said it’s exploring options to sell gold concentrate produced from the Cuiabá Mine.
The company has opted to retain Corrigo do Sitto, a small Brazilian mine it considered selling, Calderon said. An adviser has been appointed to help sell an undeveloped Gramalote project in Colombia owned jointly with B2Gold Corp., the CEO added.
AngloGold’s profit slumped 52% to $297 million last year amid rising costs and impairment at its Brazilian operations. Output rose 11% as production improved at a key mine in Ghana.
(Updates with CEO comments from sixth paragraph)
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