Ashanti Zimbabwe’s principal and sole operating asset is the aging underground Freda-Rebecca gold mine, situated near Bindura, Zimbabwe, some 85 km northeast of Harare. The mine had been valued in AngloGold Ashanti’s books at about US$8 million.
AngloGold Ashanti has no other operations or exploration activities in Zimbabwe.
Freda-Rebecca was the weakest operating asset to emerge from the combination of AngloGold and Ashanti Goldfields in April, and CEO Bobby Godsell had openly pondered shuttering the mine.
Since its commissioning in 1988 by Cluff Resources (which was subsequently acquired by Ashanti in the late 1990s), Freda-Rebecca had ranked as Zimbabwe’s largest gold mine, first exploiting the Freda and Rebecca deposits by open-pit methods, and then heading underground in 1993.
However, the past couple of years haves been miserable: production has fallen off; head grades have slipped; costs have soared; reserves have approached depletion; and the country has lurched towards chaos under Robert Mugabe’s tyrannical and erratic rule.
In 2002, the mine cranked out a respectable 98,255 oz. at a cash cost of US$214 per oz., but this fell in 2003 to just 51,091 oz. gold at a cost of US$268 per oz. owing to poor equipment and power availability as well as difficulties in obtaining foreign currency to import spares and essential equipment.
As of Dec. 31, 2003, proven and probable stood at 300,000 oz. gold, and the remaining mine life was pegged by Ashanti at four years.
Output was even worse this year, with first-quarter production shrivelling to 7,000 oz. gold at a total cash cost of US$764 per oz., and second-quarter production at an embarrassing 4,000 oz. gold.
AngloGold describes Mwana, whose shareholders and directors are all African, as representing a “broad spectrum of experience and expertise” from Angola, the Democratic Republic of Congo, Kenya, South Africa, Zambia and Zimbabwe. Mwana already owns and operates the nearby Bindura nickel mine, and hopes to tap some synergies between the two operations.
“This acquisition is in line with our stated objective to grow and to diversify our presence in Zimbabwe and in the region. It also demonstrates our confidence in Zimbabwe as an investment destination, despite the challenges of the moment,” says Mwana Chairman Kalaa Mpinga.
The transaction is still subject to regulatory approval in Zimbabwe and South Africa.
While AngloGold Ashanti is able to kick Zimbabwe dust off its boots one last time, the company’s parent,
As reported by the Zimbabwe Independent, the government, through the Agricultural Rural Development Authority, has set its sights on the highly modern and productive Triangle and Hippo Valley sugar estates in Chiredzi, which are owned by Anglo American and Tongaat Hullet.
Both owners have lodged their objections with John Nkomo, the Minister of Special Affairs responsible for Lands, Land Reform and Resettlement.
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