JOHANNESBURG – AngloGold Ashanti expects first half losses after its earnings were hit by impairments at some of its South African operations and provisions for a possible settlement with workers who contracted lung diseases at its mines.
Africa’s biggest gold miner forecast a headline loss per share of between 19 cents and 23 cents for the six months to the end of June compared to the same period last year.
The company said it recorded non-cash impairments of certain of its South African assets of $86 million following its decision to restructure its loss-making mines in Africa’s most industrialised economy.
It incurred further losses in a once-off non cash provision of $47 million from potential retrenchment costs from its South African operations, higher operating costs and lower income from associates and joint ventures.
AngloGold said in June it is considering laying off 8,500 workers, some 30 percent of its workforce, saying its South African gold mining operations had experienced “heavy, and ultimately unsustainable, losses”.
The firm said it has provided a pre-tax amount of $63 million – $46 million after taxes – for a possible settlement with miners who contracted the fatal lung disease silicosis and tuberculosis.
Fellow mining companies Gold Fields and Anglo American said last week they had set aside over $130 million between them for a possible settlement.
A class action suit, mostly relating to the fatal lung disease silicosis, was filed on behalf of miners in 2012 and has further unnerved an industry that has been battling for years with rising costs and generally depressed prices.
AngloGold’s shares fell nearly two percent after it issued a statement on the interim loss before recovering to trade 0.3 percent lower at 132.68 rand. The gold sector index was 0.3 percent firmer.