| 2008 | 2009 | Figures in million | 2009 | 2008 |
|---|---|---|---|---|
| SA Rands | US Dollars | |||
| Operating leases | ||||
| At 31 December 2009, the group was committed to making the following payments in respect of operating leases for amongst others, the hire of plant and equipment and land and buildings. Certain contracts contain renewal options and escalation clauses for various periods of time. | ||||
| Expiry: | ||||
| 201 | 70 | – within one year | 9 | 21 |
| 29 | 13 | – between one and two years | 2 | 3 |
| 28 | 28 | – between two and five years | 4 | 3 |
| 15 | 1 | – after five years | – | 2 |
| 273 | 112 | 15 | 29 | |
| Operating lease commitments include contracts with minimum notice periods. The 2008 comparative data have been aligned to replace the commitment related to the full duration of the contract with the minimum notice period commitment. | ||||
The group has finance leases for plant and equipment, buildings and motor vehicles. The leases for plant and equipment and buildings have terms of renewal but no purchase options. The motor vehicle leases have no purchase options. Renewals are at the option of the specific entity that holds the lease. Future minimum lease payments under finance lease contracts together with the present value of the net minimum lease payments are as follows:
| Present value of payments | Minimum payments | Minimum payments | Present value of payments | |
|---|---|---|---|---|
| 2009 | Figures in million | 2009 | ||
| SA Rands | US Dollars | |||
| 40 | 73 | Within one year | 10 | 5 |
| 149 | 262 | After one year but not more than five years | 35 | 20 |
| 241 | 350 | More than five years | 48 | 34 |
| 430 | 685 | Total minimum lease payments | 93 | 59 |
| – | (255) | Amounts representing finance charges | (34) | – |
| 430 | 430 | Present value of minimum lease payments | 59 | 59 |
| 2008 | 2008 | |||
| 28 | 54 | Within one year | 6 | 3 |
| 13 | 114 | After one year but not more than five years | 12 | 1 |
| 250 | 383 | More than five years | 40 | 27 |
| 291 | 551 | Total minimum lease payments | 58 | 31 |
| – | (260) | Amounts representing finance charges | (27) | – |
| 291 | 291 | Present value of minimum lease payments | 31 | 31 |
| 2008 | 2009 | 2009 | 2008 | |
| Capital commitments | ||||
| Acquisition of tangible assets | ||||
| 1,414 | 976 | Contracted for | 131 | 162 |
| 11,362 | 12,515 | Not contracted for | 1,683 | 1,396 |
| 12,776 | 13,491 | Authorised by the directors | 1,814 | 1,558 |
| Allocated to: | ||||
| Project capital | ||||
| 8,384 | 1,965 | – within one year | 264 | 861 |
| 658 | 4,419 | – thereafter | 594 | 77 |
| 9,042 | 6,384 | 858 | 938 | |
| Stay-in-business capital | ||||
| 3,325 | 5,244 | – within one year | 705 | 572 |
| 409 | 1,863 | – thereafter | 251 | 48 |
| 3,734 | 7,107 | 956 | 620 | |
| 90 | 42 | Share of underlying capital commitments of joint ventures | 6 | 11 |
| Purchase obligations | ||||
| Contracted for | ||||
| 2,729 | 2,573 | – within one year | 346 | 289 |
| 3,744 | 713 | – thereafter | 96 | 396 |
| 6,473 | 3,286 | 442 | 685 | |
Purchase obligations represent contractual obligations for the purchase of mining contract services, power, supplies, consumables, inventories, explosives and activated carbon.
To service these capital commitments, purchase obligations and other operational requirements, the group is dependent on existing cash resources, cash generated from operations and borrowing facilities.
Cash generated from operations is subject to operational, market and other risks. Distributions from operations may be subject to foreign investment, exchange control laws and regulations, and the quantity of foreign exchange available in offshore countries. In addition, distributions from joint ventures are subject to the relevant board approval.
The credit facilities and other finance arrangements contain financial covenants and other similar undertakings. To the extent that external borrowings are required, the group’s covenant performance indicates that existing financing facilities will be available to meet the commitments detailed above. To the extent that any of the financing facilities mature in the near future, the group believes that sufficient measures are in place to ensure that these facilities can be refinanced.
The group has the following forward pricing uranium commitments:
| Average contracted price | ||
|---|---|---|
| Year | 000 lbs (1) | ($/lbs) (2) |
| 2010 | 494 | 34.20 |
| 2011 | 494 | 35.06 |
| 2012-2013 | 988 | 36.38 |
Great Noligwa, Kopanang and Moab Khotsong produced 1.44m pounds of uranium oxide in 2009 (2008: 1.28m pounds).
(1) Certain contracts allow the buyer to adjust the purchase quantity within a specified range.
(1) Certain contracts are subject to market related price adjustment mechanisms. In these cases the price disclosed indicates the previous periodic price reset.
In addition, the group has gold sale commitments as disclosed in note 36.
| Liabilities included on the statement of financial position | Guarantees and contingencies | Liabilities included on the statement of financial position | Guarantees and contingencies | Guarantees and contingencies | Liabilities included on the statement of financial position | Guarantees and contingencies | Liabilities included on the statement of financial position | |
|---|---|---|---|---|---|---|---|---|
| 2008 | 2009 | Figures in million | 2009 | 2008 | ||||
| SA Rands | US Dollars | |||||||
| Contingent liabilities | ||||||||
| – | – | – | – | Groundwater pollution – | – | – | – | – |
| South Africa (1) | ||||||||
| – | – | – | – | Deep groundwater pollution – | – | – | – | – |
| South Africa (2) | ||||||||
| – | 524 | – | 560 | Sales tax on gold deliveries – | 76 | – | 55 | – |
| Brazil (3) | ||||||||
| – | 175 | – | 191 | Other tax disputes – Brazil (4) | 25 | – | 18 | – |
| – | – | – | 67 | Withholding taxes – Ghana (5) | 9 | – | – | – |
| Contingent assets | ||||||||
| Royalty – Boddington Gold | ||||||||
| – | – | – | – | Mine (6) | – | – | – | – |
| Insurance Claim – Savuka | ||||||||
| – | – | – | – | Gold Mine (7) | – | – | – | – |
| Guarantees | ||||||||
| Financial guarantees | ||||||||
| – | 100 | – | 100 | Oro Group (Pty) Limited (8) | 13 | – | 11 | – |
| Hedging guarantees (9) | ||||||||
| 3,559 | 9,335 | 3,293 | 3,293 | Ashanti Treasury Services (10) | 443 | 443 | 987 | 376 |
| 3,129 | 3,129 | 3,213 | 3,213 | Geita Management Company (11) | 432 | 432 | 331 | 331 |
| 1,142 | 1,142 | 1,071 | 1,071 | AngloGold South America (12) | 144 | 144 | 121 | 121 |
| 1,117 | 1,667 | 1,679 | 1,679 | AngloGold USA Trading | 226 | 226 | 176 | 118 |
| Company (12) | ||||||||
| 267 | 267 | – | – | Cerro Vanguardia S.A. (12) | – | – | 28 | 28 |
| 9,214 | 16,339 | 9,256 | 10,174 | 1,368 | 1,245 | 1,727 | 974 | |
(1) The company has identified groundwater contamination plumes at its Vaal River and West Wits operations in South Africa, which have occurred primarily as a result of seepage from mine residue stockpiles. Numerous scientific, technical and legal studies have been undertaken since 2002 to assist in determining the magnitude of the contamination and to find sustainable remediation solutions. The company has instituted processes to reduce future potential seepage and it has been demonstrated that Monitored Natural Attenuation (MNA) by the existing environment will contribute to improvement in some instances. Furthermore, literature reviews, field trials and base line modelling techniques suggest, but are not yet proven, that the use of phyto-technologies can address the soil and groundwater contamination at all South African operations. Subject to the completion of trials and the technology being a proven remediation technique, no reliable estimate can be made for the obligation.
(2) The company has identified a flooding and future pollution risk posed by deep groundwater in the Klerksdorp and Far West Rand gold fields. Various studies have been undertaken by AngloGold Ashanti since 1999. Due to the interconnected nature of mining operations, any proposed solution needs to be a combined one supported by all the mines located in these gold fields. As a result, the Department of Mineral Resource and affected mining companies are involved in the development of a “Regional Mine Closure Strategy”. In view of the limitation of current information for the accurate estimation of a liability, no reliable estimate can be made for the obligation.
(3) Mineração Serra Grande S.A. (MSG), received two tax assessments from the State of Goiás related to payments of sales taxes on gold deliveries for export. AngloGold Ashanti Brasil Mineração Ltda. manages the operation and its attributable share of the first assessment is approximately $47m, R347m (2008: $34m, R325m). In November 2006, the administrative council’s second chamber ruled in favour of MSG and fully cancelled the tax liability related to the first period. The State of Goiás has appealed to the full board of the State of Goiás tax administrative council. The second assessment was issued by the State of Goiás in October 2006 on the same grounds as the first assessment, and the company’s attributable share of the assessment is approximately $29m, R213m (2008: $21m, R199m). The company believes both assessments are in violation of federal legislation on sales taxes.
(4) MSG received a tax assessment in October 2003 from the State of Minas Gerais related to sales taxes on gold. The tax administrators rejected the company’s appeal against the assessment. The company is now appealing the dismissal of the case. The company’s attributable share of the assessment is approximately $8m, R66m (2008: $6m, R59m). Subsidiaries of the company in Brazil are involved in various disputes with tax authorities. These disputes involve federal tax assessments including income tax, royalties, social contributions and annual property tax. The amount involved is approximately $17m, R125m (2008: $12m, R116m).
(5) AngloGold Ashanti (Ghana) Limited received a tax assessment for $9m, R67m (2008: nil) during September 2009 following an audit by the tax authorities related to indirect taxes on various items. Management is of the opinion that the indirect taxes are not payable and the company has lodged an objection.
(6) As a result of the sale of the interest in the Boddington Gold Mine joint venture during 2009, the group is entitled to receive a royalty on any gold recovered or produced by the Boddington Gold Mine, where the gold price is in excess of Boddington Gold Mine’s cash cost plus $600/oz. The royalty commences on 1 July 2010 and is capped at a total amount of $100m, R744m.
(7) On 22 May 2009 an insurable event occurred at Savuka Gold Mine. The amounts due from the insurers are subject to a formula based on lost production, average gold price and average exchange rates subject to various excesses and the production and the preparation of supportable data. The insurable amount is not yet determinable, but management expects that it is likely to exceed $40m, R297m and will be received during the first half of 2010.
(8) The company has provided surety in favour of the lender in respect of gold loan facilities to wholly owned subsidiaries of Oro Group (Pty) Limited, an affiliate of the group. The company has a total maximum liability, in terms of the suretyships, of $13m, R100m (2008: $11m, R100m). The probability of the non-performance under the suretyships is considered minimal.
(9) Included in the amounts stated under “guarantees and contingencies” are the NPSE contracts which are covered by guarantees but not previously included on the statement of financial position. NPSE accounted contracts are fair valued at $nil, Rnil (2008: $669m, R6,326m).
(10) The group, together with its wholly owned subsidiary, AngloGold Ashanti Holdings plc, has provided guarantees to several counterparty banks for the hedging commitments of its wholly owned subsidiary Ashanti Treasury Services Limited (ATS).
(11) The group and its wholly owned subsidiary AngloGold Ashanti Holdings plc have issued hedging guarantees to several counterparty banks in which they have guaranteed the due performance by the Geita Management Company Limited (GMC) of its obligations under or pursuant to the hedging agreements entered into by GMC, and to the payment of all money owing or incurred by GMC as and when due.
(12) The group has issued gold delivery guarantees to several counterparty banks in which it guarantees the due performance of its subsidiaries AngloGold USA Trading Company, AngloGold South America Limited and Cerro Vanguardia S.A. under their respective gold hedging agreements.