Economic performance

Towards the end of 2008, CEO Mark Cutifani announced the launch of the Business Improvement Project (BIP), a company-wide change management process to secure the future of the organisation as a global gold producer. The BIP is a response to declining production levels, and increasing costs of production – and it signals the need for a change in the current strategy in order for AngloGold Ashanti to grow and thrive. It will be implemented over the next three to five years, starting with pilot sites and then across the company’s global operations, with the aim of improving productivity.

“The BIP ensures that we recognise and act upon our current challenges to achieve our goal of sustainable top quartile performance as measured against our industry peers, and against industry investment alternatives,” says Mark Cutifani. Key to the transformation of the group’s safety and health culture has been the reaffirmation by CEO Mark Cutifani that safety is the group’s first value.

Cutifani emphasises that the BIP is not a once-off activity: it’s an ongoing journey to ensure the continuing global improvement of AngloGold Ashanti’s systems and processes. It is intrinsically linked to AngloGold Ashanti’s mission, vision and values which shape everything that the company does.

The Business Improvement Project focuses on five key deliverables:

• a 70% reduction in safety incidents;
• a 30% improvement in productivity;
• a 60% reduction in reportable environmental incidents;
• a 25% reduction in operating costs; and
• a 15% return on investment to shareholders.

These deliverables will be underpinned by the company value "People are the key to our business and our future success".

The BIP is focusing on a number of key strategy areas to deliver these outcomes.

"AngloGold Ashanti is determined to grow the business by creating value through performance and potential. By managing the business as an asset portfolio and maximising margins, we aim to improve our productivity and reduce costs," explains Mike Birkhead, AngloGold Ashanti’s Vice President Business Improvement, and responsible for overseeing the BIP’s implementation.

One of the biggest challenges is achieving consistency and standardisation across a global company. The BIP will provide a common framework for all employees and apply consistency across the company, to encourage sharing of information and to contain costs.

A dedicated team has been assembled from across the business to ensure the effective rollout of the BIP over the coming years, with expertise from the fields of Information Technology, Human Resources, Communications and Project Planning being called upon. The initiative will be introduced across all operations and consists of a number of modules to train people in a common way to do things such as work planning and allocation, human resources systems and many other elements specific to the way in which things are done within the organisation.

The BIP process has been branded as AngloGold Ashanti “One“ emphasising the unity of purpose and sense of belonging the BIP aims to achieve.

"AngloGold Ashanti anticipates that the BIP will have been fully entrenched in all areas of the organisation in the next five years, and in the next two years it will have been initiated at all AngloGold Ashanti operations around the world," explains Birkhead.

The pilot project has already commenced at Mponeng Mine in South Africa. The site leadership is undergoing training for the project, as well as for the development of interpersonal skills and use of the technical business process framework.

"After the site leadership has been introduced to the BIP they will then, in turn, train their workforce and so forth until all levels of the organisation have been reached,” says Birkhead.

"In the initial period of training and rollout, an implementation team will be based at all the sites to assist and support management."

It is expected that each operation will have correctly adopted the project within 18 months, at which time the implementation team will leave the operation site management to capably continue with the process. In February 2009 AngloGold Ashanti plans to launch the BIP in Geita, Tanzania with other sites to follow shortly thereafter. By the end of 2009 the company plans to have six or more BIP-compliant mine sites.

“This isn’t an optional exercise for us,” says Cutifani, “it’s critical to the company’s future and that of all our employees. I look forward to each and everyone actively participating to help us reach our goals.”