- Gold Fields and AngloGold Ashanti agreed on a proposed joint venture to create the biggest gold mine in Africa.
- Both parties have begun interactions with senior government officials in Ghana to implement the plan as soon as possible.
Two gold mining giants Gold Fields and AngloGold Ashanti have agreed on a proposed joint venture to merge Gold Field’s Tarkwa and AngloGold Ashanti’s Iduapriem mines in Ghana to create Africa’s biggest gold mine and one of the largest in the world, as announced by both companies.
The Tarkwa mine is owned by Gold Fields Ghana, a subsidiary of Gold Fields South Africa. It is one of the world’s largest gold mining firms and in 2019 the mining company was listed as number eight on the world’s largest gold producer list. Gold Fields currently owns a 90% share of the Tarkwa mine while the Ghanaian government holds 10%. AngloGold Ashanti owns 100% of the Iduapriem mine. It is a global gold mining company which was formed in 2004 by a merger of AngloGold and the Ashanti Goldfields Corporation, and currently has its presence in four continents with 21 operations.
Both parties have reached an understanding of the fundamental terms of the proposed joint venture and have begun with preliminary, high-level, and constructive interactions with senior government officials in Ghana. There will also be further engagement with the Ghanaian government, as well as relevant bodies and other major stakeholders in order to implement the proposed joint venture as soon as possible. During this agreement, both parties also pledged to maintain mutual exclusivity.
The joint venture is anticipated to be an incorporated joint venture, established within Gold Fields Ghana and managed by Gold Fields. It is expected that AngloGold will contribute its 100% interest in Iduapriem to Gold Fields Ghana in return for a shareholding in the company. Also once the mine becomes operational, it is expected to greatly boost its capital intensity, as both companies do not envisage that any material or additional capital injection will be required to further establish the proposed deal.
Excluding the 10% stake the Ghanaian government holds at Tarkwa, both companies said in a joint statement that Gold Fields will have an interest of 66.7% – two-thirds, and AngloGold Ashanti will have a stake of 33.3% – one-thirds, in the joint venture. The companies said that the proposed joint venture will be a “high-quality operation, supported by a substantial mineral endowment and an initial life spanning almost two decades”.
The CEO of AngloGold Ashanti, Alberto Calderon noted that “by creating one of the world’s largest open-pit gold operations, in a pre-eminent mining jurisdiction, we will create longer-term value not only for AngloGold Ashanti and Gold Fields but also for the combined stakeholders in our local host communities and for all of Ghana”.
Under the proposed joint venture, an extension and optimization plan will be taken into consideration over the next three years might extend the combined operation’s estimated life of at least 18 years while also improving the production and cost parameters that are anticipated.
Throughout the course of the first five years and for the expected duration of operation, it would provide an estimated average annual output of more than 600,000 ounces on a 100% basis. Throughout the first five years and with less than $1,200/ounce for the predicted operation life, All-in-Sustaining Costs (AISC) – in 2023 dollars – were anticipated to be low.
In 2022, Tarkwa produced 531,600 ounces at AISC of $1,248 per ounce, while at a cost of $1,299 per ounce, Iduapriem produced 248,000 ounces.
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