Environment

Management structure and governance

Environmental policy and strategy within AngloGold Ashanti is overseen by a board committee on safety, health and sustainable development. This committee has as its brief the evaluation of social, economic, environmental and health impacts of the company's operations on both local and global communities. The committee comprises three non-executive directors, Bill Nairn (chairman), Dr James Motlatsi and Simon Thompson along with the chief executive officer Bobby Godsell and president, Dr Sam Jonah. Members of management, including Dave Hodgson (chief operating officer) John McEndoo (safety), Dr Dave Barnes and Dr Brian Chicksen (health), Andrew Mackenzie (environment) and Paul Hollesen (community), are invited to participate. Executives from each of the company's operating regions provide a report on the relevant performance and emerging issues in each of the regions. To provide an opportunity for in-depth deliberation, the focus of each meeting rotates through safety, health, environment and community issues.

The management of environmental issues at an operational level falls under the auspices of the chief operating officer, who is supported by line management, comprising the deputy chief operating officers, the heads of each region, and their respective general managers.

Environmental staffing

The environmental management function has been structured to support this operational mandate. The corporate environmental office is headed by Andrew Mackenzie who serves on the corporate technical group and advises both the chief executive and chief operating officers. Within each region, the regional environmental manager provides advice to the relevant management team. In some instances, the regional environmental office also includes a number of specialists who consult to the operations. In most situations, on-site environmental professionals advise the relevant general manager and are responsible for implementation of the environmental programme of their respective operations. Given the diversity of environmental issues one of the challenges in the environmental discipline is to effectively access the diverse range of skills required to address environmental issues. The company employs professionals with a range of technical skills and expertise and engages specialist consultants as and when this is necessary.

At the corporate level, an environmental steering committee has been established, comprising the various regional environmental managers. The insights of this group are used to identify and debate critical environmental issues facing the company, develop strategic response recommendations, and formulate plans for practical implementation. The first of such meetings was held at Obuasi mine in Ghana in August 2004. Environmental representatives from the Ghanaian operations were invited to participate as a way of facilitating the post-merger integration of the AngloGold and Ashanti environmental staff.

Every second year an in-house environmental conference is held, at which the broader environmental staff are invited to present technical papers and share best practice experience. The first of these meetings was held in Johannesburg, South Africa in May 2003, and will be followed by a second in October 2005.

A web-based electronic collaboration system is also being implemented to encourage professional networking, information sharing and joint problem solving. At present, the system includes an environmental incident reporting function, several discussion forums, a document library (for policies and procedures), a news and announcements facility and a list of useful web-links.

Staff are encouraged to develop their skills through both 'on-the-job' opportunities (in-house management programmes) and external opportunities (such as participation in conferences and short courses). Development is also promoted by using environmental specialists from one part of the company to audit another, or by seconding them to another operation for a short period of time to address a particular need (such as the development of a mine closure plan).

Legal compliance and permitting

The group's business principles and environmental policy guide AngloGold Ashanti's management of the impact that the company has on the environment. In addition, its operations are subject to the environmental laws, rules and regulations of the various countries in which they operate. Where no such laws exist or where these laws are perceived to be inadequate, the operations are guided by the company's business principles and deemed good practice.

Internationally, a topic of extensive debate is the application of global environmental standards. Some international NGOs are advocating that the most stringent standards are applied in every instance, irrespective of the conditions for which they were developed. For example a stringent dust standard which is appropriate in an urban environment could be unnecessarily burdensome in a remote, rural area.

Globally, mining activities are under continued scrutiny from legislators and pressure groups seeking to regulate and in some cases, contain mining operations in pursuit of environmental goals. This is particularly the case in the USA, where environmental activist groups aim to limit or ban the use of cyanide or other processing reagents, and heap leaching techniques. In addition, more stringent water quality standards are being considered by the regulatory agencies which would limit the viability of mining in some mineralised areas. While AngloGold Ashanti welcomes responsible and reasonable legislation, it is concerned that a balance needs to be found between regulation for the protection of the environment, commercial activity and sustainable development.

AngloGold Ashanti believes that good environmental management practice can protect and enhance the company's image and future business prospects. Through effective environmental management, the company is able to manage its exposure to business risks and liabilities, providing assurance to shareholders and attracting potential investors. Good environmental practices contribute to profits by reducing waste, ensuring the efficient use of natural resources such as water and reducing mine closure and clean-up costs.

With regard to environmental litigation, the company is involved in the following cases:

• in South Africa a claim of approximately R5 million ($780,000) is due to be heard in the Bloemfontein High Court in May/June 2005 relating to claims brought against the company for allegedly polluting water bodies near Wesselbron in the Free State Province. The cost of litigation and any settlement will be paid out of an amount set aside by the Harmony Gold Mining Company Limited in terms of the sale agreement between AngloGold and the former ARMgold and Harmony in respect of the sale of AngloGold's Free State assets. AngloGold Ashanti intends to dispute these claims in court
• in the USA, two civil cases brought against the company in 2000 and 2001 by the Sierra Club and the Minerals Policy Center for allegedly exceeding certain permit water quality standards or lack of permits for certain identified flows (in terms of the Clean Water Act) at the CC&V mine continues. Last year, the company reported that it had entered into two settlements with the US Environmental Protection Agency and the State of Colorado. The federal court has scheduled a pre-trial conference in March 2005 wherein a determination will be made of claims that will be allowed to proceed to trial. No trial date has been scheduled

Region-specific legislative and compliance issues include the following:

• in South Africa, a range of new legislation has come into effect in 2004 and is currently under consideration. (See box below.) All 25 business units (attached to the eight operations) within this region have environmental management programmes (EMPs), that have been approved by the Department of Minerals and Energy (DME), in place. An internal audit of the South African operations has indicated that the region is largely compliant with its EMP obligations. Importantly, the company has been able to submit its application for conversion to new order mining rights in line with the Mineral and Petroleum Resources Development Act (MPRDA), incorporating these EMPs. (See case study: Three year project to fast track environmental management plans.)
• in Brazil, new environmental regulations were implemented by the State Environmental Agency (FEAM) and became effective in December 2004. This new legislation requires small but important modifications to licensing procedures, which will expedite the issuing of licences in the State of Minas Gerais.
• a technical revision was submitted to the Colorado Division of Minerals and Geology (DMG) to allow extension of the East Cresson surface mine at CC&V in the USA. An application was also submitted to Teller County to allow this extension under the land use regulations. Both were approved during 2004. A modification to the CC&V air quality permit to allow for increased ore and overburden production separately was submitted to the Colorado Air Pollution Control Division and approval for this request is anticipated in the first quarter of 2005.
• an Environmental Impact Assessment (EIA) was performed at the Navachab mine in Namibia where a new earth-moving equipment workshop was established as part of the transition to owner mining.
• in Australia, new environmental legislation in Western Australia is being implemented with a focus on penalties, director liability, clearing native vegetation and contaminated sites.
• in Tanzania, the Environmental Management Bill was discussed in Parliament and the HSE manager from Geita Gold Mine was invited to Parliament to make a contribution. The Bill is expected to be passed into law early 2005, followed by promulgation of the supporting regulations.

Environmental management systems

Environmental management systems (EMSs) form the backbone of environmental management at an operational level. Each of the regions also has an audit process in place, both internal and external, and which are generally conducted on an annual or bi-annual basis.

The company is considering the merits of obtaining the certification of its operations to the ISO 14001 standard. As part of these deliberations each region has carried out a gap analysis to determine the degree of compliance with the standard.

The operations in Brazil, Ghana, Guinea and Tanzania are committed to the maintenance or implementation of ISO 14001:

• Geita in Tanzania is ISO 14001 certified;
• Bibiani and Iduapriem in Ghana are ISO 14001 certified. Obuasi is in the initial stages of implementation;
• Siguiri in Guinea has started developing an environmental management system;
• Cerro Vanguardia in Argentina is ISO 14001 certified; and
• in Brazil, Serra Grande and AngloGold Ashanti Mineração are ISO 14001 certified - certification is being sought for the Córrego Do Sítio project.

Amongst others, a decision on whether or not to adopt the ISO 14001 standard will need to consider:

• the value that certification brings, in the form of development and maintenance costs versus external recognition, assessment of the company's sustainability rating and other intangibles;
• its contribution to corporate governance and public reporting requirements;
• its use in the identification, prioritisation and management of company-related environmental issues, including the conformity of internal management systems;
• internal and external verification processes and the frequency at which audits are carried out; and
• practical issues such as personnel and budget requirements and realistic certification target dates.

Environmental reporting protocols

Environmental incidents can represent a significant risk and cost to the company. AngloGold Ashanti has developed a reporting protocol that allows the company to effectively identify and manage these risks and associated costs. The protocol aims to streamline operational reporting requirements yet provide the appropriate level of information necessary to advise the executive and the board of the nature and occurrence of important incidents and developments and management response.

In line with this protocol, the major incident reports must be made within 24 hours. On a quarterly basis, a summarised report of incidents and major developments within each region is presented at the board safety, health and sustainable development committee meeting.

Prompt major incident reports:

Major environmental incidents are reported to the regional management, as well as the corporate environmental office, within 24 hours of the time that operational management becomes aware of the incident. For purposes of this reporting an environmental incident is defined as 'an event, action or non-conformance with a procedure that results, or has the potential to result, in an adverse impact on the surrounding environment; or any event, action or occurrence which is contrary to the AngloGold Ashanti business principles'.

Different regions may have slightly different definitions for these levels of reporting. What they have in common is that a 'major' incident is one which is:

• likely to attract public (or media) attention, or
• result in a cost to the company exceeding $500,000 (approximately R4 million), including fines, compensation, clean-up, loss of production, anticipated litigation costs, etc.

In line with this, 16 high-level incidents were reported to the board during the year. (See table below.) All these were reported in line with the first parameter. Other 'lower level' incident reporting systems remain in place at an operational level depending on the EMS in place.

Two of these incidents are elaborated on below:

• Ghana is host to one of the world's largest arsenopyritic gold-bearing orebodies, and, in fact, the Obuasi region has a higher than normal natural arsenic background level. Until the mid-1990s arsenic trioxide (as a by-product of gold mining) was precipitated, recovered, placed in bags, and sold into Europe for commercial applications (such as for the preservation of wood and for use as pesticides). Following a decline in this market, however, bags of arsenic were accumulated on site, creating a stockpile of some 10,000 tons. The production of arsenic trioxide ceased when the Pompora Treatment Plant (PTP) roaster facility was shut down in 2000. 
  
  The storage of this arsenic was recognised to be inadequate, and in consultation with the Ghanaian Environmental Protection Agency (EPA), a plan was developed to address the situation while longer term disposal issues are considered. The Ghanaian EPA has approved the movement of the bagged arsenic from the storage site at the PTP to a High Density Polyethylene (HDPE) lined area which has been purposely constructed at the south end of the mine adjacent to the new STP Plant. This is a secure area where trained personnel with the appropriate protective equipment and handling facilities will supervise the storage to meet both the regulations of the EPA and AngloGold Ashanti's level of practice. Once the stockpile is moved to the impoundment, the storage of the arsenic by-product of the mine's operation will no longer pose an uncontrolled hazard. 
  
  One of the alternatives to disposing of the arsenic trioxide into a lined hazardous waste land-fill facility, which will require indefinite management, is to convert the arsenic into a more stable complex and dispose of it onto the conventional tailings storage facility. This approach continues to be evaluated. 
  The Biox (biological oxidation) treatment plant which was introduced at the Sansu Sulphide Treatment Plant (STP) in 1992 is capable of converting arsenic trioxide into a more chemically stable arsenic complex. From the HDPE-lined storage pond, arsenic trioxide could be blended into the Biox process and disposed of onto the Sansu tailings storage facility, over a period of approximately six years. 
  
  These are some of the options that AngloGold Ashanti, and the Ghanaian EPA have been jointly evaluating, together with the initiatives that the former Ashanti Goldfields had already embarked upon. 
  
  In June 2004, arsenic levels exceeding 0.2 parts per million were detected in the Nyam River. Investigations showed that flow from the tailings dam were regularly exceeding the discharge standard, but through dilution, were below the 0.2 parts per million level by the time this water entered the Nyam River. The underlying cause was that in a cost-saving exercise, the arsenic fixation method had been changed. Previously, dissolved arsenic was fixed into a stable form by reaction with limestone prior to entry into the tailings stream. It was hoped to achieve this same level of fixation by reacting these waters with the carbon-in-leach (CIL) tails. 
  
  Because of the large volumes of CIL tails, the residence time in the arsenic stabilisation tanks was drastically reduced thereby compromising the effectiveness of the arsenic stabilisation method. Modifications have been made to the STP circuit to achieve the discharge standard. An improved monitoring and alert system has also since been put in place to prevent a re-occurrence of this incident.
   
• Most of the environmental incidents reported at Sadiola in Mali are related to the animal life. This problem is exacerbated during the dry season when the lack of grass and surface water outside the mining areas causes the livestock to force their way through the fences into the mining areas where they then remain. The mine has doubled the number of people patrolling the fences (from six to 12) with some reported success. 
  
  On 23 May 2004, approximately 100 bird carcasses were discovered around the edge of the return water dam located adjacent to the Sadiola tailing storage facility (TSF). An immediate investigation was conducted by on-mine personnel with the assistance of two Australian scientists (who were on site at the time) from the Australian Centre for Minerals Extension and Research (ACMER). Autopsies carried out by the Onderstepoort Veterinary Institute in South Africa attributed the cause of death to a high concentration of sodium in the brain. Environmental analyses also showed a concentration of copper and other metal salts in the sediments and water. Of note was that there was no evidence of cyanide, which had previously been the cause of a number of other bird fatalities a year prior to this. (See Report to Society 2003.) 
  
  The elevated levels of sodium and other salts were a result of efforts to detoxify cyanide, using both sodium metabisulphate and prior to this, copper sulphate. As a result of this incident, the mine has all but decommissioned the use of the return water dam and is circulating decant water from the tailings dam direct to the process plant. The mine is also participating in a multi-year study carried out by ACMER to investigate the interactions between wildlife and tailings storage facilities. Preliminary indications of this study are that the design of these facilities has a significant effect on the extent to which wildlife are able to use them. At Sadiola the shallow waters surrounded by natural bush are ideal wildlife habitat, especially in hot, dry summers when temperatures above 45ºC are experienced.

Quarterly incident summaries and major development reports

Each regional environmental office also submits to the Corporate Environmental Office a quarterly report summarising the status of all important environmental incidents and developments in their regions during the preceding quarter.

Audits

The following audits were undertaken during the year:

• in the South Africa region a total of 72 audits were performed by members of the region's environmental management department in 2003 - the majority of legal non-compliances were associated with water management and waste management. Attention during 2004 was focused on addressing the findings of these audits. A new auditing protocol to evaluate legal compliance has been developed for introduction at the business sections next year. 
  
  An international environmental review of the South Africa region is planned for 2005. A similar review conducted in 2002 identified 27 major areas for improvement. The new review will examine progress on these 27 issues, as well as comparing the region against present international standards.
• a formal ISO 14001 re-certification audit was undertaken in July 2004 by the Australian DLIQ Certification Services at Geita in Tanzania. In addition, the mine's systems were verified by senior government officials for Geita's entry into the Tanzanian President's Award for Environmental Management. The mine also achieved a four star rating in its annual integrated Nosa audit (which includes environmental as well as safety and health parameters).
• as a signatory to the Australian Minerals Industry Code for Environmental Management (Code 2000), the Australia region is committed to annual site audits against the Code. Audits are performed by both external (RISKMIN) and internal auditors, with the most recent audit indicating a level of 72% implementation of the code. (This result is consistent with most of the larger mining companies in Australia.) Annual audits of the region's TSFs are performed both internally and by specialist external consultants. Annual statutory audits are performed across the region by government bodies - Department of Industry & Resources (DoIR) and Department of Environment (DoE) in Western Australia and the Department of Business, Industry and Resource Development (DBIRD) in the Northern Territory.
• in the USA, environmental audits were conducted of solid, liquid, and hazardous waste disposal and recycling facilities utilised by the operations. The refineries utilised by the operations have also been audited.
• the assessment of the group's adherence to the international Cyanide Protocol follows a novel approach of creating expert teams drawn from different regions to work with a local team in undertaking what is essentially a detailed risk assessment and audit. Internal audits of compliance have been completed in Mali, Tanzania, Namibia, South Africa, the USA, Brazil and Argentina. The audit of the Australia region was completed at the end of January 2005, and the Ghana/Guinea area is scheduled for March to April 2005. (See case study: Developing and implementing best practice for cyanide management.)

Environmental incidents reported during 2004 - high level or major incident*

Financial provision

In all the jurisdictions in which the group operates the company is required to provide financial assurance - in a form prescribed by law - to cover some, or all of the cost, of the anticipated closure and rehabilitation costs for the operation. (Rehabilitation refers to the process of reclaiming or restoring mined land to a similar use to before mining or a pre-determined, agreed use post-mining.) These amounts are derived from the mine closure plans, which are also regulated by law. Closure plans are devised prior to the commencement of operation and are regularly updated based on life-of-mine projections. Although the final cost that will be incurred at closure is not definite, ample provision is thus made during mine life and reflected in the company's Annual Report 2004 and in the environmental rehabilitation obligations table. Total estimated environmental liability (rehabilitation and mine closure costs) amounted to $350.1 million as at 31 December 2004 (2003: $248.6 million). This increase principally relates to the business combination with Ashanti and additional assessed liabilities in South Africa.

South African law requires that AngloGold Ashanti calculate its estimated environmental closure and final rehabilitation costs for operations which are subject to the requirements of the law. The law also requires that this estimate be used by AngloGold Ashanti to make periodic cash contributions to an environmental trust fund (or use some other approved funding mechanism), created in accordance with rehabilitation obligations of those operations. The monies in this trust are invested primarily in interest-bearing debt securities.

The South Africa region intends to finance the ultimate rehabilitation costs from the monies invested with the rehabilitation trust fund, from the proceeds on sale of assets and gold from plant clean-up at the time of mine closure as well as from internally generated funds. Provisions are made annually from the operations' cash flows. It is anticipated that these estimates are likely to change as additional, operation-specific information is gained and if, and as, closure and final rehabilitation requirements change.

The Department of Minerals and Energy (DME) is currently developing a guideline document for the estimation of closure costs and this final method of estimation may further alter the closure estimate. The company's comprehensive methods of determining closure costs have been referred to in the development of the guideline. Currently, the calculation of environmental liabilities is such that there is a shortfall between the presently declared environmental liabilities and the current balance in the Trust Fund. This issue is being addressed.

In Mali, Tanzania and Namibia, mine closure costs and their associated provisions are reviewed on an annual basis. The region is working towards standardising the approach and assumptions used for closure provision estimation at the various operations. Estimates are revised as the understanding of site-based issues that influence closure provision evolve based on technical studies undertaken in the previous year. The dynamic nature of the operations and ongoing rehabilitation means that closure costs can be revised either up or down.

The total estimated liability for the USA is based on the amounts agreed with the Colorado Division of Minerals and Geology. The company has posted reclamation bonds of some $44.5 million to cover current rehabilitation obligations and has provided a guarantee for these obligations. One of the main reasons for the difference between bonds posted versus estimated liability is that the state of Colorado allows bonds to be posted incrementally based on the amount of activities that have occurred and are proposed for that particular year whereas the company's estimate is based on complete build-out.

Closure of the Big Springs Project in north-eastern Nevada is nearly complete with minor activities needing to be completed in 2005. The mine and mill areas are being returned to their prior land use of cattle grazing and wildlife habitat. In 2005 AngloGold Ashanti plans to submit release requests to the applicable state and federal agencies to obtain release of majority of the posted reclamation bonds in light of the completed work.

The South American operations (Argentina and Brazil) were subjected to environmental inspections by state environmental authorities during 2004 and were found in compliance with local, state and federal environmental regulations. The total anticipated environmental rehabilitation and closure costs for these operations is estimated at $42.2 million, of which AngloGold Ashanti's attributable share is estimated at $38.9 million.

In terms of the West Australian law, mining companies are required to file an unconditional guarantee from a bank or financial institution with the regulator. Mine closure cost estimates for the Australian operations are calculated on the basis of a guideline, which provides for a minimum amount, which is then supplemented according to specific project risk factors.

The total estimated closure cost for former Ashanti operations in Ghana and Guinea is $39.5 million. These estimates are based on studies carried out for each operation and will likely change as further technical investigations, that may influence the closure provisions, are carried out. They represent the best current estimate of amounts that are expected to be incurred when the remediation work is performed within current laws and regulations or the terms of the respective mining licenses. The dynamic nature of the operations and ongoing rehabilitation means that closure costs can be revised either up or down.

Communication and awareness, and public participation

AngloGold Ashanti is committed to communicating and consulting with interested and affected parties (IAPs) on environmental aspects of its activities. This is done through a range of mechanisms. Much of this is dealt with under the community section of this report.

The Australia region, for example, has an extensive communication and interaction programme in place with both internal (see box below) and external audiences. The latter includes consultation on a regular basis with stakeholder groups such as the Council for Minerals and Energy (Western Australia), the Department of Industry and Resources (Western Australia), the Department of Environment (WA), the Department of Industry and Resource Development (Northern Territory) and the Laverton Leonora Cross-Cultural Association (LLCCA). The regional corporate office also engages with educational institutions in activities such as participation in the delivery of lectures/seminars to the mentoring of students. Site-sponsored visits are also regularly arranged for various stakeholder groups, including school teachers and students, NGOs, government agencies and members of the general public through open days.

In the USA, community and other outreach and education programmes regarding the operations are routinely conducted. This is accomplished through site tours, formal and informal presentations, meetings, fact sheets, brochures, and other written materials addressing a range of subjects.

The Sadiola, Morila and Yatela mines in Mali, the Geita mine in Tanzania, the Siguiri mine in Guinea and the Obuasi, Iduapriem and Bibiani mines in Ghana, have dedicated personnel tasked with ensuring open dialogue between the operations and local communities.

Sadiola is currently implementing an Integrated Development Action Plan (IDAP), which seeks both to mitigate mine impacts and meet the needs of the surrounding communities. An autonomous foundation is in the process of being established, aimed at local economic development. (See case study: Integrated development action plan for Sadiola and Yatela in the Community section of this report.)

Personnel from Geita mine in Tanzania currently chair the Tanzanian Chamber of Mines and Energy's Health Safety and Environment Sub-committee. The mine is also represented in the Tanzanian national task force formed in 2003 to take further the Global Mining Initiative/International Council on Mining & Metals (GMI/ICMM) Mining, Minerals and Sustainable Development (MMSD) programme.

The Navachab mine in Namibia met with IAPs on 18 November 2004 to discuss plans for compliance with the International Cyanide Protocol and the mine closure plans. The mine's environmental incident register was available for scrutiny.

The South America region (Argentina and Brazil) has well-developed and long-standing relations with national and regional government on environmental issues, as well as community groups and communities themselves. In addition to ongoing communication with IAPs, the region has developed a model for environmental communication and preservation through its environmental education centres, which combine educational centres, with places of leisure and conservation areas for the benefit of local communities. These are located at Nova Lima (Report to Society 2003) and at Serra Grande. A new Environmental Education Centre was inaugurated at Santa Barbara in June 2004. The centre is being operated by a local NGO co-ordinated by AngloGold Ashanti.

In the South Africa region the company is represented on several environmental government forums, established by the DME and the Department of Water Affairs and Forestry. Community forums have also been established by Ergo to provide a means of consulting on aspects related to the winding down and closure of its operations and Ergo has quarterly meetings with the various government departments to discuss both environmental performance and incidents. (See case study: Stakeholder involvement in closure planning progress at Ergo.)

Performance during 2004

The primary environmental concerns for the company have been the use and management of cyanide, mine closures, water use and management, the use of other resources (such as energy), biodiversity issues, surface and land rehabilitation during mining operations.

Cyanide management

The use of cyanide for the recovery of gold is a core issue for the gold mining industry and is critical to its viability. Yet, its potential impact on the environment is one of the most controversial and debated issues for legislators, environmentalists and other groups.

AngloGold Ashanti has been actively involved in the development of the International Cyanide Management Code (Code) and has adopted published protocols and standards of practice for cyanide management. The Code, which is available at www.cyanidecode.org, is a voluntary industry initiative developed under the auspices of the United Nations Environment Programme (UNEP) and finalised in May 2002. The Code has two major parts:

• a commitment by signatories to manage cyanide in a responsible manner (AngloGold Ashanti has indicated it will be a signatory once the board of the ICMI adopts the remaining critical administrative documents); and
• the practices that must be followed to implement this.

AngloGold Ashanti is well on its way to compliance with the Code and internal audits are currently being concluded at all operations in anticipation of external auditing. (See case study: Developing and implementing best practices for cyanide management.)

Mine closure

As new operations are developed and commissioned on a regular basis, some older mines cease operations and are closed. In an environmental sense, true closure may often only be achieved long after the operation has ceased and involves extensive planning, and close collaboration with the regulatory authorities in order to obviate any unwanted environmental consequences and satisfy regulatory requirements.

A number of closures are currently in progress:

• the Ergo operation, a tailings retreatment company, which was established in February 1978 is due to cease operating in March 2005. (Several case studies on Ergo appear in this document.)
• the Federal Mining Department (DNPM) issued a partial closure certificate for surface infrastructure and the mining operation at Mina Velha in Brazil following a technical visit in late May 2004 and final de-commissioning is underway. The State Environmental Agency (FEAM) is still evaluating the closure from an environmental perspective. Mina Velha is the first mine to be officially decommissioned in Brazil.
• also in the South America region, the Engenho d'Água Mine in Brazil ceased operations at the end of June. The environmental rehabilitation programme is in progress.
• rehabilitation of the Morro de Galo arsenic plant was finalised in March 2004. As agreed with FEAM, rehabilitation is only conducted during the dry season (May to November) to avoid the risk of environmental contamination. Rehabilitation of the nearby tailings dams is continuing and is in the final stages. The entire project, undertaken at a cost of some $4 million, should be completed by May 2006. (See case study: Rehabilitation of old tailings deposits at Nova Lima.)
• closure of the Big Springs project in north-eastern Nevada, in the USA is nearly complete, with minor activities needing to be completed in 2005. The mine and mill areas are being returned to their prior land use of cattle grazing and wildlife habitat. AngloGold Ashanti plans to submit release requests to the relevant state and federal agencies to obtain release of a majority of the posted reclamation bonds in light of the completed work. (See case study: Screening level risk assessment - a tool for optimising closure and mitigating strategies at the Big Springs Mill site.)
• a detailed closure plan, including quality surveys, was undertaken for the Alamoutala Pit at Yatela in the lst quarter of 2004. Mining of the pit is expected to cease in February 2005 to be followed immediately by the implementation of the plan.

Resource use and waste generation

The AngloGold Ashanti group is committed to reducing the use of, and improving the efficient use of scarce environmental resources such as energy, water, timber and other materials. Apart from the environmental advantages of reducing the use of such raw materials, the group can also potentially achieve significant cost savings. (See box below: Used oil fuels boilers at the new truckshop.)

Environmental targets are set by the individual operating mines or business units as they apply to their own EMSs and reflect the priorities unique to those operations. Information on resource use and waste generation is collected and recorded at site level.

Water usage

Varying site conditions, mining and treatment processes, and the availability of water dictate to a large degree the use of water and the level of efficiency achieved.

Examples of programmes in place at an operational level:

• at AngloGold Ashanti Mineração in Brazil, a programme to recycle water from the Cocoruto Dam in the Queiroz Plant was approved by the State Water Agency (Igam). This initiative will see a reduction in the fresh water intake of 38% (some 1.4 million litres of water per annum).
• at CC&V, in the USA, the decision to bury the drip lines on the valley leach facility will reduce evaporation, thereby conserving valuable water resources especially during seasonal droughts. Moreover, CC&V specifically decided against initially using sprayers, and instead went with drip lines, as an initial means of reducing use of water.

Energy usage

Energy is a major cost driver, particularly in underground mining. In its efforts to conserve energy, the group is focusing on ensuring the efficient use of energy and on developing and implementing renewable energy sources.

During 2004, AngloGold Ashanti together with Anglo American plc completed a technology strategy in respect of the energy platform which has as its objective the reduction of the group's energy intensity year-on-year.

At the South African operations, for example, hydro-power is used to generate sufficient energy for rockdrills and other equipment at the Tau Lekoa mine in the Vaal River region. This is one of the few gold mines in the country to operate on this system, which also has a number of occupational health advantages (such as reduced noise and dust levels). Other applications include the powering of pumps at a number of other mines in the area. The Moab Khotsong mine in the Vaal River area is participating in the National Electricity Regulator's demand side management programme, with significant cost savings expected. (See case study: Energy conservation gains renewed impetus in the South Africa region.)

Pollution prevention

The prevention of pollution, particularly of the air and water resources is generally also considered in the operational EMS.

In the USA, Denver office and the CC&V mine both received Pollution Prevention (P2) awards in February 2004. (See case study: Awards for contribution to pollution prevention.)

A technical report concerning water management at the Cerro Vanguardia mine in Argentina was presented to the mining authorities of the Santa Cruz Province. The document includes different alternatives for the final placement of excess water. A final report was issued in mid 2004. A detailed ground magnetometer survey (GMAG) was conducted by the AngloGold Ashanti geophysical team in South America, covering the West side of the Tailings Storage Facility (TSF). The survey was designed to map bedrock structures to facilitate the monitoring of preferential flow paths to groundwater movements.

In South Africa, action plans are being put into place to address the 16 identified near-surface polluted aquifers. The Department of Water Affairs and Forestry has recommended that companies involved in mining areas, such as Klerksdorp and Carletonville, collectively design a water management closure plan for that regional area, in addition to the normal mine closure plans. Water management agreements will be negotiated with the relevant mining parties in the two operational areas to address potentially elevated constituent concentrations in ground water.

Surface disturbance and land rehabilitation

The disturbance of land remains one of the most visible impacts of mining operations, particularly open cast mining, through the creation of pits, surface infrastructure and rock and TSFs. EIAs conducted prior to the commencement of mining have, as their aim, the identification and minimisation of these and other impacts.

Mitigating measures identified are then incorporated within the operations' EMSs and the operation is then bound to undertake these as mining progresses. Where possible, rehabilitation of disturbed areas is carried out concurrently with mining operations so as to minimise the amount of disturbance at any one time. Rehabilitation standards are usually regulated by the relevant national and regional authorities.

At Geita mine in Tanzania, for example, the mine's rehabilitation programme was expanded to match the growth in the waste rock storage facilities, to plant 120,000 tree seedlings and rehabilitate
90 hectares of land. Tree seedlings were sourced from the local nurseries, each supplying 40,000 trees. This has given local species an economic value over and above that of charcoal and timber, promoting conservation and creating a viable economic activity for host communities. (See case study: Rehabilitation at Geita in the Community section.)

The process of rehabilitating TSFs is not simple and success is varied. The Navachab mine in Namibia recently spent some N$2.5 million for rock storage facilities and top soil cladding during the decommissioning of the old TSF. Indigenous plants are grown at the mine's nursery and used for rock storage facilities' revegetation programmes.

Recently, improvements have been effected at a Vaal River TSF in South Africa, following concerns raised by local residents relating to airborne dust. (See case study: Dust management at Vaal River - response to local community concerns.) AngloGold Ashanti and the industry as a whole has invested significant funds into research over the years in ways of best rehabilitating TSFs. Such research is continuing under the auspices of the University of the Witwatersrand. (See case study: Woodlands project - good progress being made with phytoremediation project.)

Budgetary constraints in recent years have hampered environmental remediation efforts in the South Africa region. In an effort to remedy this, some R19 million ($2.96 million) has been spent on the so-called 'legacy projects' in 2004 and an additional R9 million ($1.40 million) is budgeted for 2005. (See case study: Three year project to fast-track environmental management plans in South Africa.)

Biodiversity

The loss of biodiversity and ongoing threats to habitat is a subject of global debate. AngloGold Ashanti, through its participation in the ICMM's Biodiversity Taskforce, is engaged with the IUCN (World Water Conservation Union) in a dialogue on mining and biodiversity. It is the group's belief that mining need not pose a threat to biodiversity but can offer opportunities to enhance biodiversity conservation. Mineral exploration projects, for example, frequently take place in remote locations and work undertaken in support of mining ventures can yield valuable baseline scientific information for conservation purposes. Revegetation activities can also provide the opportunity for reintroducing plant species into environments where they may have been threatened.

The preservation of Brazilian Atlantic rainforest around the company's Brazilian operations is a case in point. These forests have been significantly reduced over the last century as cities have grown, and large farms, cattle ranches and coffee and sugar plantations have replaced the natural habitat. However, the areas owned by mining companies such as AngloGold Ashanti have been relatively well protected from both illegal mining and hunting. AngloGold Ashanti has set aside an area of 147 hectares of native forest, much of which is Brazilian Atlantic rainforest. This area has been designated as a RPPN (Private Natural Forest Reserve) by the State Forest Institute (IEF). (See case study: Preserving natural forests - Mata Samuel de Paula at Nova Lima.)

Another example is the Blesbokspruit wetlands adjacent to the Ergo operation in South Africa. Ironically, this Ramsar-designated wetland developed as a result of significant mining activity in the region over the past 100 years, which silted up the Blesbokspruit. Ergo's activities in the area - of reprocessing and cleaning up old tailings dams - has improved the quality of the water flowing into the wetland. The proximity of the wetland to the Ergo operation is also the subject of intense planning to ensure that it is unaffected as a result of Ergo's closure in 2005. (See case study: The Blesbokspruit Ramsar wetland site.)

Yet another example of the contribution made by the industry is the research undertaken at Lake Carey in Australia following intensive rainfall during March/April 2004. Wildlife surveys (principally waterbird and aquatic invertebrates) were conducted to monitor a change in the environmental response. (See case study: Biodiversity research at Lake Carey.)

Participation in international and national debate

AngloGold Ashanti is committed to participating in debate on environmental matters at international, national and local levels. Some of the contributions the group has made at this level include membership of, and active participation in, the ICMM, and the Global Reporting Initiative (GRI) as organisational stakeholders.

As part of its environmental strategy, AngloGold Ashanti actively participates in law-making processes in the countries in which it operates. This is often facilitated through participation in mining associations (for example, the Chamber of Mines of South Africa and the Minerals Council of Australia). Public consultation processes are generally more sophisticated in developed world situations (for example, USA and Australia) than in developing world situations (for example, Mali and Tanzania). Particularly in the developing countries the company has a role in making available technical skills and resources in developing good practice. Similarly, the company has a role to play in the development of international standards where, through its membership of the ICMM, AngloGold Ashanti is engaged in the review of the International Finance Corporation, safeguard policies, the development of GRI and other benchmarking initiatives.

In addition to its participation in development of the International Cyanide Management Code itself, at the beginning of 2004, AngloGold Ashanti - along with several other mining companies and cyanide manufacturers - reconstituted the Industry Advisory Group (IAG). The IAG was initially formed to provide input to the Steering Committee during Code development and was reconstituted to give impetus to the global adoption and implementation of the Code. (See case study: Developing and implementing best practice for cyanide management.)

Awards

AngloGold Ashanti's environmental performance has been recognised at a number of levels and in different regions during the year. Some of these are:

• in recognition of significant achievement, best practice and innovation in the Northern Territory Mining and Petroleum Industries and Associated Supply and Service Sectors, Union Reefs Gold mine in Australia received the 2003 Minister's Recognition Award in Resource Development for Environmental Management. (See case study: Awards-winning closure and rehabilitation at Union Reefs.)
• the USA's Denver office and Cripple Creek & Victor Gold Mining Company (CC&V) both received 'Pollution Prevention Awards' in February 2004 as special recognition for the development of an effective pollution prevention programme in accordance with the Colorado Mining Association's Pollution Prevention Code of Practice. The award is endorsed by the Colorado Department of Public Health and Environment and has been recognised by the US Environmental Protection Agency through a 2003 Friend of EPA award. (See case study: Awards for contribution to pollution prevention.)
• AngloGold Ashanti Mineração in Brazil was awarded the Civil Defence Medal by the governor's office of the Minas Gerais state. This was in recognition of the company's partnership with the State's Civil Defence Unit and Fire Department. The company's fire and emergency brigades were called upon to help extinguish forest fires and help with chemical spillage clean-ups on local roads.