Review of operations (PDF - 1.97MB)

Review of operations

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Introduction

Products, operation and geographic locations

AngloGold Ashanti's main product is gold. An insignificant portion of its revenue is derived from the sale of silver, uranium oxide and sulphuric acid. AngloGold Ashanti sells its products on world markets.

Operating performance

Overall gold production in 2004 rose as a result of the combination of the AngloGold assets with those of Ashanti, in line with the company's strategy of achieving geographic and orebody diversity. Gold production for the year amounted to 6.052 million ounces, an increase of 8%. Gold production from outside of South Africa - principally from low-cost surface and shallow mines - rose by 27% to 2,973 million ounces.

Strong operating currencies against the dollar and rising cost of inputs resulted in total cash costs increasing by 25% to $268 per ounce.

Capital expenditure for the year rose to $585 million. Of this, $329 million (56%) was for maintenance capital expenditure and $256 million (44%) for new projects.

Adjusted headline earnings decreased by 7% to $263 million.

Safety and health

Safety performance was the best ever recorded by the group, with all major safety indicators improving. Regrettably, 32 employees lost their lives in work-related accidents during the year, 31 of these at the South African operations and one at the Morila mine in Mali.

The group's fatal injury frequency rate (FIFR) was 0.19 per million man hours worked, an improvement of 34% on the rate of 0.29 achieved the previous year. The lost time injury frequency rate (LTIFR) also declined significantly, by 26%, to 6.54 per million man hours from 8.83 the previous year.

Extensive reporting on occupational safety and health, the environment and issues relating to sustainable development can be found in the company's Report to Society 2004, which is published simultaneously with this report. This report is available on the company's website at www.AngloGoldAshanti.com or from the contact persons listed at the end of the report.

Outlook

Production in 2005 is expected to increase to some 6.5 million ounces. Capital expenditure is expected to be $655 million in 2005, mainly at the South African, South American and former Ashanti operations.

Percentage contribution to gold production by country - 2004