Reeling from strikes and safety stoppages at its South Africa operations that hit production and profits in 2012, South African miner AngloGold Ashanti (NYSE: AU) is carrying out an operational and corporate review to improve earnings.
"Capex we have really started to take a knife into," Tony O'Neill, joint interim CEO, said in a webcast to discuss 2012 results. "From an initial ask of around US$2.5bn, we've pulled it back to US$2.1bn."
The company is now focusing on the major projects that are key to the future of the company, according to the executive. "We've taken away a lot of the optional growth projects that were nice to have but will have to wait until a later date," O'Neill said.
The 2013 budget for exploration and studies has been set at US$377mn, down from US$461mn in 2012. Of the total, US$200mn is for Colombia where the company has the La Colosa project and Gramalote, a 51:49 JV with Vancouver-based B2Gold (TSX: BTO).
"We see [Colombia] as very important to the future of the company," O'Neill said.
In addition to focusing on delivering projects on time and on budget, this year will also see a detailed review of the company's portfolio in which "nothing is sacrosanct," according to O'Neill.
Some assets deemed to be non-core are being considered for sale.
"We are looking to take plus US$100/oz out of our sustainable cost base... with a particular focus on procurement and some of the operational practices," O'Neill said.
On the corporate side, the company is undertaking a review of all activities. "We are looking at our structure to ensure that it is both efficient and able to deliver the requirements of the business," the executive said.
"At this point we have taken US$50mn out of corporate as a starting point in that exercise," he added.
AngloGold Ashanti's production outlook for 2013 is 4.1-4.4Moz, which O'Neill says is "very achievable." The company will also keep looking for opportunities to improve both ounces and margins.
The corporate cost review is being carried out in conjunction with Deloitte, while a management team is carrying out the operational review.
In Latin America, the company also has the Brasil Mineração and Serra Grande operations in Brazil and Cerro Vanguardia in Argentina.