Economic performance

Economic performance (PDF - 1.22MB)

Printer friendly

3 Review 2004

A full review of the 2004 financial year can be found in AngloGold Ashanti's Annual Report 2004. The report is available in a printed format from the contacts listed on the back page or on the website at www.anglogoldashanti.com.

Adding value, creating wealth, generating income

The charts alongside illustrate the distribution of wealth generated by the company during 2004 as compared to 2003. A detailed value-added statement is presented in the Annual Report 2004.

Gold production

In 2004, AngloGold Ashanti produced 6,052 million ounces of gold from 22 operations in 11 countries. This was 8% up on 2003, largely as a result of the business combination with Ashanti. (Note that the Freda-Rebecca mine in Zimbabwe was sold during the year.)

Gold production by country (000oz)
	2004	2003
Argentina	211	209
Australia	410	432
Brazil	334	323
Ghana	485	-
Guinea	83	-
Mali	475	577
Namibia	67	73
South Africa	3,079	3,281
Tanzania	570	331
USA	329	390
Zimbabwe *	9	-
Total gold production	6,052	5,616
* The Freda-Rebecca mine in Zimbabwe was sold during 2004

Distributions to employees

Distributions to employees (including executive directors) for 2004 totalled $863 million (2003: $660 million) - 50% of the total value created by the group as compared with 44% of the value created being distributed to employees in 2003. The significant increase from 2003 to 2004 relates to the business combination between AngloGold and Ashanti.

Employee benefits ($ million)	2004		2003
Salaries, wages and other benefits⁽¹⁾	742	86%	551	84%
Health care and medical schemes⁽²⁾	64	7%	69	10%
Contribution to pension and provident plans	48	6%	36	5%
Retrenchment costs	9	1%	4	1%
Total	863	100%	660	100%
⁽¹⁾Including executive directors ⁽²⁾Including post-retirement medical expenses

Gold market development

AngloGold Ashanti is the only gold company to dedicate resources to market development. During 2004, $15 million was spent on market development (2003: $19 million). (See the Annual Report 2004 for further details, as well as case studies: Brazilian Designer Forum becomes leading event in Brazilian jewellery market and Riches of Africa 2004 - six years on.)

Distributions to shareholders - dividends

The dividends declared and paid during the 2004 financial year were as follows:

final dividend for the second half of 2003 financial year: a dividend of 335 SA cents (50 US cents) per ordinary share was declared on 29 January 2004 and paid on 27 February 2004.
interim dividend for first half of 2004 financial year: a dividend of 170 SA cents (26 US cents) per ordinary share was declared on 29 July 2004 and paid on 27 August 2004.

Stock exchange listings	Trading symbol
Ordinary exchange listings on:
JSE Securities Exchange South Africa (JSE)	ANG
London Stock Exchange	AGD
Euronext Paris	VA
Ghana Stock Exchange	AGA
Also quoted as:
International Depositary Receipts (IDR) in Brussels	ANG BB
American Depository Shares (ADS) on the New York Stock Exchange	AU
CHESS Depository Interest (CDI) in Australia	AGG
Ghana Depository Shares (GhDS) in Ghana	AADS

Finance costs

Finance costs expensed were $79 million in 2004 (2003: $49 million), This is after capitalising borrowing costs of $11 million (2003: nil).

Capital expenditure

Capital expenditure during the 2004 financial year totalled $585 million. Of this, $329 million (56%) was for maintenance capital expenditure and $256 million (44%) on new projects.

Outlook for AngloGold Ashanti in 2005

With the business combination of the operations of AngloGold Ashanti complete, overall production is forecast to rise approximately 8% to 6.5 million ounces. Most of this increased production is expected to come from Obuasi in Ghana, Mponeng in South Africa, Geita in Tanzania, the Malian operations Sadiola and Yatela, and Siguiri in Guinea. In line with this, it has been estimated that capital expenditure will increase by 12% to $655 million.

Exploration activities

The exploration programme is an integral part of AngloGold Ashanti's growth strategy and is aimed at sustaining or expanding existing operations (brownfields exploration) and discovering new gold deposits (greenfields exploration). Exploration expenditure totalled $81 million in 2004 (2003: $63 million).

Brownfields exploration was undertaken at most of the group's existing operations, while greenfields exploration was conducted in Australia, Mali, Canada, Alaska, Peru, the Democratic Republic of Congo (DRC), Colombia, China, Russia, Vietnam, Brazil and Mongolia.

The Annual Report 2004 contains a detailed review of exploration undertaken during the year. (See case study: Generating new ounces - doing business in new places.)

Attributable Mineral Reserves and Ore Resources (as at 31 December 2004)

Attribute Mineral Resources and Ore Reserves (million ounces)	Mineral Resources	Ore Reserves
Argentina	3.5	1.6
Australia	11.6	6.2
Brazil	10.9	2.8
Ghana	34.3	11.8
Guinea	4.2	1.7
Mali	5.7	2.3
Namibia	5.2	0.5
South Africa	117.0	39.1
Tanzania	18.1	9.0
USA	7.7	3.9
AngloGold Ashanti	218.2	78.9

Preparing for closure

Mining activities by their very nature have finite lives. An important part of current mining activity is the provision for environmental rehabilitation/restoration. A detailed account of environmental liabilities may be found in the environmental section of this report. The socio-economic implementations of closure are equally important and are addressed in the community and labour sections of this report. The Ergo operation in South Africa will close in 2005. See about Ergo for the case studies relating to closure.

Attributable Mineral Resources (million ounces)