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Investing in African Mining Conference - Indaba 2004 10-12 February 2004
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| Wednesday, February 04, 2004 |
Good morning distinguished delegates, ladies and gentlemen.
The Indaba Mining conference has always been very special to me. This year it is even more so for at least two reasons. Firstly, this may well be the last time that I will be addressing this gathering in my capacity as CEO of Ashanti Goldfields. Under normal circumstances, this would have been a very sad event, but it isn’t because - and this also brings me to the second reason - it gives Bobby and I the opportunity to present to you what could result from a marriage of the “strength and the stature of a lion” with the “immortality and resilience of the crocodile”.
Ladies and Gentlemen, the crocodile’s life in many respects sums up what Ashanti has been through. The crocodile, unlike other extinct members of its family, has lived through several centuries and survived changing habitats and adverse living conditions. Spanning over one century, Ashanti, like the crocodile (which is indeed Ashanti’s logo) has defied all odds to get to where it is today.
Ashanti has been around for many years. Indeed, it has been in existence since the 19th century when it started life as a single mine company in Obuasi. Throughout its history it has faced and successfully overcome many challenges to become the formidable multinational company it is today. In fact, not only has it overcome various challenges, I think l can safely say that Ashanti has been a trail-blazer in several ways and to highlight a few examples:
- Ashanti went public on the back of one mine in 1994 and within three years a formidable multinational company had emerged following the acquisition of listed companies such as Cluff Resources, IGR, Golden Shamrock and SAMAX.
- Within two years of going public it scored a first by becoming the first African company to gain admission to the NYSE. A trend which has since been pursued by a number of other African mining companies.
- Our pioneering efforts continued when Ashanti built three new mines to world-class standards using predominantly local African talent at a time when hardly any new mines were being developed on the continent.
- We pride ourselves in being instrumental in fashioning out new and successful partnerships with stakeholders including governments and local communities. For example, Ashanti financed the rural electrification project for 36 communities in and around Obuasi and partly financed the construction of an eye clinic in collaboration with the Bryant Mission. Ashanti also supports HIV/AIDS counseling projects in Tanzania. Other projects in Bibiani in Ghana, Siguiri in Guinea and Geita in Tanzania also stand testimony to this.
- Ashanti’s trailblazing activities manifest themselves even more in what we have shown to the world we can achieve with the empowerment of nationals, be it in Guinea, Ghana, Zimbabwe or Tanzania, to work in and manage our operations. We are proud of our efforts and success in empowering local people in the countries in which we operate. For example, we have instituted an MBA programme...
- Even on the capital-raising front, Ashanti blazed a trail with its $250 million convertible bond issue in 1996 - one of the biggest of its kind for a gold mining company at that time. Ashanti subsequently redeemed the bonds both ahead of schedule and at par at a time when the financial markets were in turmoil.
Against all odds, Ashanti has achieved all of the above and more. And in the words of a leading analyst, “Ashanti? Never a dull moment!”
Ladies and Gentlemen, Ashanti stands on the threshold of Africa’s new dawn and all the opportunities that come with it.
Ladies and Gentlemen, Africa is on the move. There is broad consensus across the entire continent that our economic development WILL depend on good governance, rule of law, increasing democratization and intra-African trade. The occasional blips notwithstanding, broadly speaking the picture is positive for the continent and we at Ashanti see tremendous opportunities unfolding. We are excited. But even in our excitement, the realities of Ashanti’s situation in a rapidly consolidating industry, not least our shareholding structure, has convinced us that Ashanti can only harness these opportunities optimally by teaming up and working with a partner who has the resources and just as importantly shares our vision for our Continent.
Ladies and Gentlemen, in AngloGold I am pleased to say we have found such a partner. In jointly managing the Geita mine, Ashanti and AngloGold have built an excellent relationship based on mutual respect. Like Ashanti, AngloGold is committed to the continent and this is illustrated, amongst other things, by the fact that at a time when several companies were de-listing and relocating offshore, AngloGold stayed in Africa, despite the fact that it has assets in North America, South America and Australia.
I think my friend Bobby is better placed to tell you about AngloGold and its vision for this partnership. However I would like to touch briefly on 3 things.
- Bringing the two companies together will create a truly pan-African company with a world-class asset base. The merged company will have 22 mines spanning 11 countries. It will achieve an unrivalled degree of geographic and ore body diversity, as well as the capacity to weather both gold price and currency volatility. The new company will have an enviable organic growth pipeline and be a significant cash generator for the benefit of all its stakeholders.
- Partnering with AngloGold allows a “de-stressing” of Ashanti’s balance sheet at a stroke and provides Ashanti access to AngloGold’s deep financial pockets and world-class mining technology. These attributes will be critical for the exploitation of the Obuasi Deeps project which requires significant long-term capital to meet the challenges of deep level mining. The development of Obuasi Deeps is fundamental to the long-term viability of Ashanti’s flagship mine, Obuasi, and, I dare say, the company itself. Without this partnership, Ashanti would face nearly insurmountable obstacles to developing Obuasi Deeps, the consequences of which would be grave to all stakeholders, including the Government of Ghana.
- As I mentioned in my recent review of 2003 financial resuIts, all of our successes could not have been achieved without the unflinching support of all our stakeholders who stood by us through good times and, more importantly, bad times. On behalf of the entire Ashanti team, I take this opportunity to express our deep sense of gratitude and reassure you all that the objectives which attracted you to Ashanti will be pursued further in the next phase of Ashanti’s life.
Finally it now gives me great pleasure to hand over to the new boss. BWANA the stage is yours.
Ladies and Gentlemen, thank you. |
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