By Roger Agana /Francis Tandoh
AngloGold Ashanti is to sell off its stakes in two gold mines located in Mali to Canadian gold mining firm, Iamgold, a source from the mining company revealed.
The two mining firms are currently partners in the management of the Sadiola and Yatela mines in the West African country with each owning 41 percent of the former mine in southwestern Mali.
The Sadiola mine is nearing the end of its supply of oxide ore, or soft rock, and an expansion to process hard rock is necessary.
Sources at Iamgold have said that although the expansion will provide growth at lower costs it is not its preference to make the investment on its own.
“Iamgold has been having ongoing dialogue with AngloGold, with respect to how the Sadiola expansion project could move forward and to help facilitate their exit from their share of the assets. Acquiring their share of the assets has always been one of the options,” Iamgold spokesperson Laura Young said.
The two mining firms both own a 40 percent stake each in the nearby Yatela mine with South African-headquartered AngloGold being the operator of both mines, in which the government of Mali owns the remaining interests.
AngloGold, under pressure to reduce its debt, said earlier on Tuesday that it intends to dispose of its stakes in the Sadiola and Yatela mines.
Officials of the company have said AGA had been approached by a potential buyer that meets its criteria and has asked for a binding bid.
With over 3 billion US dollar debt on its shoulders, the company has announced that it would be selling assets to reduce the debt by one billion dollars this year but not at any price.
It would be recalled that AGA announced plans of placing its Obuasi mine in Ghana under care and maintenance early 2014.
AGA, the world?s third largest gold producer released a statement on May 19 last year about the company?s performance.
The release which revealed a general positive financial performance for the mining giant also highlighted the problems at the Obuasi mine, which resulted in the planned retrenchment of over 5,000 employees, including contractors.
AGA put forward a range of interventions to address the historic under-performance and the high cost structure at the Obuasi mine.
Srinivasan Venkatakrishnan, Chief Executive Officer of AGA commenting on initiatives said, ?We have now developed a good working partnership with the Government of Ghana, the Ghana Mineworkers Union and other key stakeholders to address the challenges facing Obuasi.
We must do all we can to stop the current cash outflows at Obuasi and define a sustainable future and we appreciate the support of our partners in taking the decisive action necessary to achieve this.?
AngloGold Ashanti announced plans to spend $220 million in a major retrenchment exercise on May 22 last year. This exercise, according to management, was part of series of steps that was being taken to make the Obuasi mine a profitable venture.