MiningWeekly.com Audio Articles

Vancouver-headquartered Lucara Diamond Corporation achieved a more than five-fold year-on-year increase in adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) to $102.5-million for the financial year ended December 31.

That compares with the adjusted Ebitda of $18.4-million reported for the 2020 financial year. Lucara has attributed the increase primarily to higher revenues of $230.1-million for 2021 – an 84% increase on the revenue of $125.3-million in 2020.

Net income for the year increased to $23.8-million, or $0.06 a share, compared with a net loss of $26.3-million, or $0.07 a share, in 2020.

Lucara reports that 2.8-million tonnes of ore were processed during 2021 – a record since the start of production at its Karowe mine, in Botswana.

About 369 390 ct was recovered at a grade of 12.93 carats per hundred tonnes of direct milled ore. Among the diamonds recovered were 39 greater than 100 ct, including eight diamonds weighing more than 300 ct each, eight diamonds weighing between 200 ct and 300 ct each and 23 diamonds weighing between 100 ct and 200 ct each.

Notably, Lucara had recovered a 1 174 ct clivage diamond of variable quality with significant domains of high-quality white gem material – the third diamond weighing more than 1 000 ct to be recovered at Karowe since 2015. It has been named Sethunya.

As a result of strong forecast revenues for 2021 and amid strengthening prices for large, high-value diamonds, Lucara made a strategic decision late in 2021 to defer the sale of Sethunya.

Lucara sold 381 681 ct of diamonds in the year under review at an average price of $603/ct, compared with an average price of $335/ct the year before.

"Higher diamond prices combined with solid operational performance at the mine and Lucara’s novel, diversified approach to diamond sales through HB, Clara and traditional tenders has delivered strong revenues for the company in 2021, demonstrating a full recovery from the challenges of the pandemic, and reflecting a much better outlook for 2022 and beyond as we continue to benefit from one of the strongest diamond markets we have seen in the better part of a decade,” CEO Eira Thomas comments.

As a result of the stronger diamond market, Lucara has revised its revenue guidance for 2022 higher to between $195-million and $225-million, compared with the previously guided $185-million to $215-million.

Production and sales for this year are projected to be between 300 000 ct and 340 000 ct.

UNDERGROUND EXPANSION

Lucara's board late in 2021 approved the Karowe underground expansion project (UGP) at a projected capital cost of about $534-million. The UGP will extend Karowe's mine life to at least 2040, with mining predominately from the highest-value EM/PK(S) unit.

The project is forecast to contribute about $4-billion in additional revenues, using conservative diamond prices.

The UPG is expected to be in full production by the second half of 2026.

During 2021, Lucara invested $86.3-million in the UGP, with the funds spent on pre-sink activities for the production and ventilation shafts; clearing for and construction of 40 out of 88 tower foundations for the 29 km 132 kV transmission line bulk power upgrade; mobilisation of headframe materials and surface infrastructure, including a 200-person camp and a water treatment facility; and commissioning of a temporary generator farm, which will be used to power the shaft hoists during sinking until line power is commissioned.

Lucara expects capital costs for the UGP for this year to be about $110-million.

Work will focus on the start of main shaft sinking activities, the commissioning of the bulk power supply 132 kV line and substations and detailed engineering for the underground development.

Coal miner Wescoal has decided to put its Vanggatfontein Colliery on care and maintenance while it tries to secure an extension to a coal supply agreement (CSA) with power utility Eskom.

Wescoal acquired the mine, in Delmas, Mpumalanga, in 2017 as part of its buyout of Keaton Energy.

Coal produced from the mine has been supplied to Eskom under a ten-year CSA, which is due to expire on April 30; however, the energy component which is prescribed in gigajoules has been exhausted, with about 300 000 t of coal currently on stockpile at the mine.

Wescoal says it has had several engagements with Eskom regarding the extension of the CSA, which required that the entire Vanggatfontein resource be dedicated to the power utility.

"Unfortunately, discussions with Eskom on the CSA renewal, and their obligation to take up about 11-million tonnes of coal from Vanggatfontein, have not materialised as at the date of this announcement.

"Wescoal has, therefore, deemed it prudent to place the mine on care and maintenance as it is uncertain of how long Eskom will take to make a final decision. The above solution will save both overhead costs and capital expenditure," it notes.

Wescoal plans to continue to engage Eskom to find an amicable solution to the impasse in order to save jobs and the economy of Victor-Khanye municipality and other beneficiaries.

Vanggatfontein has a remaining life-of-mine of more than six years, with reserves of more than 15-million tonnes.

"The immediate plan regarding the run-of-mine stockpile is to process the coal and supply into the domestic and export market.

"Direct Wescoal employees working at the mine will be accommodated in various roles within the group, while management assesses alternative options and continues to engage with Eskom. The washing plants at Vanggatfontein will also be used to process coal from the Moabsvelden mine, thereby saving any additional capital requirements at Moabsvelden in the short term," the company says.

Mining Weekly Editor Martin Creamer unpacks Kumba Iron Ore's continued exploration in the Northern Cape under new CEO Mpumi Zikalala; Platinum Group Metals playing a role in batteries; and Anglo American's record financial year, under the stewardship of Mark Cutifani.

Global diversified miner Anglo American has posted a profit attributable to equity shareholders of $8.6-billion for the 2021 financial year after recording solid performances across assets and with strong support from commodity prices.

Underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) was at a record $20.6-billion.

Outgoing CEO Mark Cutifani on February 23 said 2021 was a year of two distinct halves, characterised by strong market demand and prices for many products as economies recouped lost ground on the back of government stimulus.

He attributed this strongest-on-record financial year for the company not only to productivity and market aspects, but also to Anglo’s transformative business model, which it has been shaping over a number of years.

Anglo proposes a final dividend of $2.1-billion, equal to $1.18 apiece, and a $0.50 apiece special dividend, taking the total dividends paid for the year to $4.19 apiece, or $5.2-billion.

Taking into account a $1-billion share buyback programme the company undertook in the year, shareholder returns totalled $6.2-billion for the year, or $4.99 apiece.

This compares with a total dividend of $1 apiece, equal to $1.2-billion, declared in 2020.

Basic headline earnings a share of $7 compares with basic headline earnings of $2.47 posted for the 2020 financial year.

A strong price environment in the first half of the year enabled Anglo to generate $7.8-billion of free attributable cash flow, before moderating in the second half of the year.

Average market prices for the group’s basket of products increased by 43% year-on-year.

Cutifani pointed out that Anglo’s return on capital employed of 43% was well above its targeted 15% through-the-cycle return, as it should be in times of strong pricing.

The company increased its mining Ebitda margin to 56% in 2021 and returned $7.1-billion in taxes and community development expenditure, an increase of 89% year-on-year, to its operating countries.

Since 2017, Anglo has returned $12.2-billion to shareholders and invested $18-billion in the business, including to develop the Quellaveco copper project, in Peru, which is due to start up around mid-year.

The group’s net debt balance stood at $3.8-billion at the end of December, compared with net debt of $5.5-billion at the end of December 2020.

OPERATIONAL PERFORMANCE

Across its various commodities, Anglo has reported a return to 95% of normal production capacity in the year under review.

Particularly, the platinum group metals business reported an improved mining and processing performance, increasing output by 13% year-on-year to 4.2-million ounces and refined PGM production to a record 5.1-million ounces.

This while the diamond subsidiary De Beers delivered higher rough diamond production of 29% year-on-year to 32.3-million carats, in response to strong consumer demand.

The company’s iron-ore businesses experienced improved plant availability and delivered a 3% year-on-year increase in iron-ore output to 62.8-million tonnes.

Copper production was in line with the prior year at 647 200 t, but nickel production decreased by 4% year-on-year to 41 700 t, owing to licencing delays and lower ore grades.

Metallurgical coal output came in at 11% lower year-on-year, at 14.9-million tonnes, mainly owing to the suspension of longwall operations at the Grosvenor operation since May 2020 as a result of an underground incident and an almost four-month-long longwall stoppage at the Moranbah operation as a result of elevated gas levels.

The company explains that the Moranbah operation was further impacted by challenging geological conditions in the second half of the year.

Anglo also advised that Grosvenor is up and running again.

Manganese ore output totalled 3.7-million tonnes in the year under review, marking a 5% improvement compared with the prior year.

Thermal coal export production was down to 9.3-million tonnes, reflecting the demerger of the South African coal operations on Ju...

New Kumba Iron Ore CEO Mpumi Zikalala this week gave a firm thumbs up to South Africa’s biggest iron-ore mining and marketing company continuing to invest in mineral exploration in the Northern Cape, which she described as being highly prospective.

The Johannesburg-listed Anglo American group company has spent R1.5-billion on high potential targets in the last ten years to good effect. Kumba has, over the last eight years, been exploring in the Northern Cape, where it has identified anomalies and targets that have become a great focus for the company as potential sources for other new mining developments. (Also watch attached Creamer Media video.)

“One of the projects that we are currently executing is the Kapstevel South project,” Zikalala told Mining Weekly in a Zoom interview.

The R7-billion Kapstevel South development at the Kolomela mine is currently 35% complete, “and we do have a good set of project people executing this project” added Zikalala. It is on track to produce its first iron-ore in the second half of next year.

In the wings awaiting potential developmental go-ahead are Ploegfontein, which is at prefeasibility stage, and Heuningkranz, where conceptual work is being finalised.

“We’ll continue looking to find additional areas,” said the former De Beers Group Managed Operations MD.

In the wide-ranging interview, Zikalala also expressed excitement about Kumba’s:

ultrahigh dense media separation (UHDMS) plant at the Sishen mine, for which site establishment will take place in the first half of this year.

the awarding of a R1.6-billion mining contract to a community based joint venture to mine iron-ore at the Kolomela mine;

supply of large volumes of fresh water to local authorities for local communities; and

promising collaborative and open engagement with Transnet and the port authorities.

Mining Weekly: Kumba is building a UHDMS plant that will turn waste into saleable product. Could this be a game changer?

Zikalala: Definitely, it’s a real game changer for us. Firstly, what would have been declared waste will be classified as reserves going forward. From 150-million tonnes of waste, we'll be able to produce 50-million tonnes of saleable ore, which is wonderful. If you think about it, it will reduce our strip ratio, and with that, it will also assist with the reduction of our unit costs. The other critical aspect is that it will improve the quality of our product. UHDMS has a higher density cut point, which will assist us with producing more premium products, and that essentially will move us up from 18% to 50%, and through that, we'll be able to provide better quality product to our customers. All in all, a real game changer, and we're excited about this project.

When will you see this happening, when does it come into full effect?

We have essentially started mobilising site from a UHDMS perspective. Because we are integrating this to our current plant, the final handover will be in the first half of 2024. Post that, we will be fully in the space where we'll be producing via the UHDMS. 2023 will have the full benefit of the UHDMS. This is wonderful technology, and we'll continue looking at further opportunities going forward. It would make no sense for us not to consider this going forward.

Please expand on the mining joint venture that has been established with the local community.

Normally mining companies would talk about enterprise development and supplier development opportunities when it comes to local community involvement and last year Kumba spent R4.1-billion with businesses that are located within our communities. But the joint venture that you are referring to is another critical one for us and involves the awarding of a mining contract to local community, a core business mining contract to a local joint venture. That's essentially a R1.6-billion contract. This is around our Kolomela mine, and that joint venture is made up of community members. Again, what's exciting for us is the fact that the own...

It is great to see such a healthy demand for this great industry, De Beers Group CFO Sarah Kuijlaars said after posting a set of stunning financial results for the world’s leading diamond company by value.

Underlying 2021 earnings before taxes, depreciation and amortisation soared to $1 100-million from $417-million in 2020 and unit costs remained broadly flat at $58/ct compared with $57/ct in 2020. (Also watch attached Creamer Media video.)

“It’s a really proud day to report this strong set of results and it's worth putting them in context – a year ago when we spoke, I was reporting on behalf of a loss-making business. It's a really strong turnaround,” Kuijlaars recalled during our Teams interview.

Total revenue increased to $5.6-billion, rough diamond production rose 29% to 32.3-million carats, and capital expenditure increased by 48% to $565-million from $381-million in 2020.

De Beers’ branded diamond jewellery from De Beers Jewellers and De Beers Forevermark both achieved double digit retail growth year-on-year. In August, the diamond company announced the ‘One De Beers’ approach and its focus on establishing De Beers as a ‘purpose-led’ brand. De Beers has now launched its new brand campaign built around a widening interpretation of the phrase ‘I do’, a time-honoured expression of intent.

“Going forward, we're seeing continued robust demand. Clearly, we won't have the same growth rates as we've seen in the past because 2021 was obviously above 2020, but also above 2019. But we're confident that the natural diamonds have got enduring meaning with consumers, and that will continue into the future,” said an upbeat Kuijlaars, who was speaking shortly after outgoing Anglo American CEO Mark Cutifani recalled during an early morning media conference that “in the early days of Covid, we couldn’t sell a diamond. Today, it’s pretty clear there’s been a lack of exploration across the globe and the world is now short of diamonds – a rare product has become a lot rarer”.

In the last 14 months, there has been a 30% increase in diamond prices, with the market moving even quicker than was anticipated.

“We’re really pleased and excited about what the future holds for De Beers,” said Cutifani during a media briefing covered by Mining Weekly.

"Natural diamonds are absolutely unique and they have this really enduring connection with people that we love," said Kuijlaars.

In South Africa, production increased by 41% to 5.3-million carats; in Botswana, production was 35% higher at 22.3-million carats; in Namibia, production was broadly in line at 1.5-million carats; and in Canada, production was marginally lower at 3.2-million carats.

The execution of Venetia Underground, in South Africa, and Jwaneng Cut-9 expansion project, in Botswana, continued to progress, and the mine life extension of the Namibian land operations was approved during the year. The new AMV3 vessel for Namibia, now named the Benguela Gem – the largest and most advanced diamond recovery vessel ever built – arrived in Cape Town in September to complete preparations for its commissioning in this quarter.

Mining Weekly: What will be the key drivers of demand going forward?

Kuijlaars: We're well aware that as people come out from the pandemic there continue to be a significant proportion that do have money in their pocket, and are making choices about how to spend that disposable income, and have chosen and continue to choose diamonds and diamond jewellery. We're aware that obviously during the pandemic, there was less international travel. This will come back, but also pre-pandemic, significant consumers chose to buy their diamonds when they were travelling into Europe or New York. So we've seen the consumer choices adapt, and I think they'll continue to adapt going forward.

De Beers Group rough diamond production totalled 32.3-million carats in 2021. Do you foresee a production increase this year?

The 32.3-million carats was really an outstanding delivery by all our units. Ag...

Energy and mining industry experts this week detailed how the mining industry is grappling with the technical challenges of transitioning existing, and preparing new, operations to become more efficient and integrating renewable energy sources to, eventually, facilitate net-zero emissions from the mining and production of mineral resources.

The solutions highlighted during the Energy and Mining Summit on February 22 included the use of renewable energy sources, and the associated challenges and opportunities; battery and heat energy storage; liquefied natural gas; coalbed methane; and a focus on energy efficiency.

Additionally, the experts highlighted how mines with long lives and mining companies more broadly are planning out their transitions over time to meet their internal commitments and global net-zero emissions targets.

However, the full impact of the energy transition is also reshaping supply chains, which is crucial to shaping a net-zero mining industry to supply the minerals necessary for future low-carbon economies.

Speaking during the 'Key considerations for switching to renewables' virtual roundtable, Botswana manganese mine developer Giyani Metals president and COO Derk Hartman emphasised that, as a battery metals mine developer, prospective buyers of its products have made it clear that the entire supply chain must become carbon-neutral for electric vehicles manufacturers to market and sell them as carbon-neutral.

"Half the weight of the car is battery, which includes the industrial metals. The feedback from potential buyers is that they want metals with the lowest carbon footprint possible. While developing our manganese mine [in Kanye basin, Botswana], we have developed a roadmap to become carbon-neutral by 2025 or 2026. While it is not feasible to start operations carbon-neutral, car makers and buyers want clear goals, such as [those set] out in our roadmap, as carbon-neutral products must start early in the supply chain," he said.

Diamond miner De Beers Group head of carbon neutrality Kirsten Hund, meanwhile, pointed out that the company also has clear goals to become carbon-neutral, by 2030, and to further improve the sustainability of its operations. However, as a directly consumer-facing business, it is experiencing direct demand from consumers and luxury brands to provide carbon-neutral diamonds.

"Our targets are earlier than most other mining companies because the pressure is there. Further, consumers and luxury brands do not want a 50% carbon-neutral product; they want a fully carbon-neutral product.

"Measuring electricity use and our emissions is the easy part. The challenging part is supply chain emissions [Scope 3 emissions]. This means that we must have close stakeholder engagement and constant communications with our supply chain to gather the [Scope 3 emissions] data and then see how it can be mitigated."

It will be difficult to achieve a 100% reduction in Scope 3 emissions, and 100% accurate reporting of these emissions is another challenge, she added.

Financiers to the mining industry are also reinforcing and driving internal environmental and emissions targets and the industry is also keenly aware of the urgency of all organisations, and especially large organisations, responding to climate change issues, said gold producer AngloGold Ashanti engineering, heavy mobile equipment, fuels, power and water commodity manager Oliver Milambo.

AngloGold started reporting on climate change issues in 2007 and has reported on its carbon intensity for more than a decade.

"Renewable energy will be the primary energy source for future generations and the mining industry, for which we are laying the foundations. Renewable energy technologies are also advancing rapidly, which can be inferred from the exponential drop in costs of solar power, as an example, with similar trends in other energy technologies.

"The environment is a key focus area for us, and we are at the point where everyone from big polluters t...

Midtier platinum group metals (PGMs) producer Sedibelo Platinum Mines is pursuing technologies to allow it to participate in the PGMs value chain and to produce low-carbon PGMs, Sedibelo environmental, social and governance senior executive Lael Bethlehem highlighted during the Energy and Mining Summit on February 23.

She explained that Sedibelo is co-owner of Kelltech SA, the company that has the licence to use Kell technology in the Southern African Development Community region.

Sedibelo intends to pioneer a Kell plant, which, if various conditions are met, will break ground this year.

Bethlehem explained that Kell is an alternative to a smelter, using a hydrometallurgical process to liberate metals from the concentrate without the use of heat.

She acclaimed that, when compared with smelting, the Kell process reduces electricity consumption by about 80% and reduces greenhouse-gas (GHG) emissions by 65% to 75%, depending on the set-up of the plant.

Moreover, sulphur dioxide emissions are greatly reduced, as is water consumption.

Bethlehem said this has been extensively tested, including at a pilot plant, but has yet to be built at commercial scale.

Bethlehem elaborated that the potential carbon emission savings as a result of Kell would be about 1 t of carbon dioxide per tonne of concentrate.

If successful, she said Kell would be a compelling alternative to smelters and, in time, could have a global-scale impact on carbon emissions.

Moreover, Kell would be beneficial for the lifecycle of an ounce of refined PGMs.

Bethlehem explained that if smelting accounts for one-third of the carbon emitted in the lifecycle of producing an ounce of PGM, then Kell would cut the total embedded carbon of refined PGMs by at least 25%.

Kell fits into Sedibelo’s broader environmental, social and governance ethos of reducing GHG emissions.

The company is targeting 55% to 60% of its total electricity requirements to come from renewables by 2024.

Moreover, it is aiming for 65% to 70% of its total electricity requirements to come from renewables and storage by 2030, even as its demand doubles.

Sedibelo will partner with original-equipment manufacturers to produce battery electric vehicles (BEVs) or fuel cell electric vehicles for heavy-duty mining vehicles, as these become financially and technically feasible.

Over the next five years, the company’s electricity use will double and could potentially increase even further if future requirements to power mining BEVs are considered.

Bethlehem informed that the company was in negotiations with a preferred bidder for the development of 40 MW of solar and wind power, and intends to sign a contract in the second quarter.

Moreover, a further 35 MW is set to be built adjacent to the mine in partnership with the solar plant provider, to supply the underground mine.

Bethlehem also mentioned that while South Africa has made considerable progress in furthering its renewable energy market, there are still constraints that need to be dealt with.

While the new 100 MW own generation cap is welcomed, Bethlehem said the grid had fallen behind, with State-owned utility Eskom unable to transmit the available amount of renewable power. Therefore, the grid needs to be strengthened, which would entail considerable capital and work, she said.

Moreover, she said that, while the appetite for renewable projects is increasing, the availability of sites for corporates is shrinking, and that this needs to be addressed, given that there are many companies developing plans for renewables projects.

SIBANYE-STILLWATER

Also presenting was Sibanye-Stillwater energy and decarbonisation manager Jevon Martin, who said the company was aiming for carbon neutrality by 2040.

Strategic objectives to achieve this include reducing absolute GHG emissions; ensuring security of energy supply; enhancing sustainability through reduced energy and carbon costs; and partnering in the development of the South African electricity supply industry to enab...

The unique properties of platinum group metals (PGMs) may also play a role in batteries, says Anglo American Platinum (Amplats) CEO Natascha Viljoen.

Speaking to Mining Weekly in a Zoom interview, Viljoen highlighted how PGMs are poised to play a role, no matter the direction in which the energy transition heads. (Also watch attached Creamer Media video.)

Seventy per cent of Amplats’ production already helps to stop internal combustion engines from polluting the world’s air, and running in close parallel is the growing use of PGMs to catalyse the generation of green hydrogen, and convert renewables-based green hydrogen fuel cell electric vehicles into the world’s cleanest and greenest mobility.

Now, the unique properties of PGMs are also poised to play a key energy density enhancing role in batteries, and thus battery electric vehicles, as a result of work being done since 2019 by Platinum Group Metals and Amplats with Lion Battery Technologies.

“What's really exciting for us going forward is if we think about the energy transition to renewables, one of the challenges with renewables, as we know, is that wind and sun is not necessarily stable, and we need ways of storing energy to have it available when we don't have sun and wind,” said Viljoen.

Key is that hydrogen is, in effect, stored energy in and of itself, and going hand-in-hand with it are PGMs, making the metals role players in storage as well, in that they catalyse the generation of hydrogen, which can be stored, and in fuel cells, they catalyse mobility and power generation, coupled to unrivalled cleanness and greenness

They are now poised to also uplift the energy density of lithium sulphur batteries, lithium air batteries, and lithium-ion batteries.

“So, the exciting thing about our product is it doesn't matter how this energy transition goes, we will have a role to play,” said Viljoen.

In a world that has no option but to clean up its act, it is clear that PGMs are within a hair’s breadth of becoming ubiquitous process catalysers.

Regarding the energy density PGMs can provide, some original equipment manufacturers (OEMs) of cars favour the higher density the metals can provide and Lion can add 30% more range, or for the same range and power, 30% less battery, which offers more space and less weight. As reported by Mining Weekly, this is what some OEMs are after, and a solution that PGM producers are poised to bring to the market with Lion Battery.

Amplats 'commitment to market development is underscored by its relationship with venture capital company AP Ventures, which is a potential investor in PGMs-linked battery technology.

TOP-DRAWER FINANCIAL RESULTS

Amplats more than doubled its earnings before interest, taxes, depreciation and amortisation (Ebitda) to R108-billion in 2021, and contributed an important R148-billion to all its stakeholders within the hard-pressed South African economy, prompting this opening question during a one-on-one interview:

Mining Weekly: The record results of Amplats show a contribution to society of an enormous R148-billion. Please highlight the details of this distribution of value to your stakeholders, particularly to the fiscus during these tough times of social grants?

Viljoen: I think that's a very good opening question for us to talk about – the real value that we do generate as a mining company. To your point, we have contributed R148-billion in the South African economy. If you break that down, R35-billion of that made up the taxes and royalties that went back into the fiscus. We spent R14-billion on salaries and wages, R28-billion on local procurement, of which R5-billion was doorstep community spend. We spent a further R2-billion on social investment, such as Covid support, and then – which I think is very important and something we often miss – we spent a further R14-billion on making sure that we can sustain the assets that we have, regrow them for the sustainability of the business, and to continue the contribution b...

Gold miner AngloGold Ashanti produced 2.47-million ounces of gold in 2021, down from the 2.8-million ounces produced in the prior year, but within its revised guidance range and at a total cash cost of $963/oz, up from the $790/oz of 2020.

Production was lower mainly as a result of the miner significantly reinvesting across key assets, the temporary suspension of underground mining activities at its Ghana-based Obuasi underground mine, Covid-19 disruptions and secondary impacts of the pandemic, including on the mobility of labour.

AngloGold estimates the impact on its production from Covid-19 in 2021 to be 47 000 oz, compared with 59 000 oz in 2020.

Nonetheless, AngloGold closed the year with an 8% quarter-on-quarter increase in production in the fourth quarter at 659 000 oz.

Quarter-on-quarter, the miner’s Australia-based Sunrise Dam operation increased production by 19% and Tropicana by 16%, while the Brazil-based AGA Mineração operation increased its output by 14% and Serra Grande its output by 50%.

The Guinea-based Siguiri mine’s output increased by 10% quarter-on-quarter and the Ghana-based Iduapriem mine its output by 10%.

Meanwhile, the higher cash costs were the result of lower gold production, the drawdown of ore stockpiles at certain operations, higher operating costs and inflationary pressures.

All-inclusive sustaining costs (AISC) for 2021 increased to $1 355/oz, compared with AISC of $1 037/oz in 2020, mainly owing to an increase in sustaining capital expenditure (capex) and higher total cash costs.

AISC for 2021 included an estimated $34/oz impact resulting from Covid-19 and an estimated $55/oz impact relating to the Brazilian tailings storage facility (TSF) compliance programme.

As for earnings, AngloGold closed out 2021 with $622-million, or $1.48 a share, compared with the $946-million, or $2.25 apiece, of 2020.

Headline earnings for 2021 were $612-million, or $1.46 a share, compared with $1-billion, or $2.38 apiece, at the end of 2020, mainly because of lower gold production, higher operating and exploration costs, as well as $45-million assigned to the care and maintenance of Obuasi.

Other impacts include restructuring and related costs ($18-million), foreign exchange ($43-million) and costs associated with the tender offer for, and subsequent redemption of, the 5.125% notes due this year ($24-million).

These effects were partially offset by the marginally higher gold price received and lower net finance costs ($92-million).

Adjusted earnings before interest, taxes, depreciation and amortisation – impacted by lower ounces of gold sold and higher operating costs, partially offset by the marginally higher gold price received – were $1.8-billion, down from the $2.47-billion of the year prior.

Net cash inflow from operating activities decreased from $1.54-billion in 2020, to $1.26-billion, mainly owing to lower ounces of gold sold and higher operating costs, but partially offset by the marginally higher gold price received, lower cash taxes, higher dividends received and favourable movements in working capital.

As such, Anglogold recorded free cash flow of $104-million for 2021, down from $743-million in 2020.

Adjusted net debt decreased by 10%, from $850-million as at June 30, 2021, to $765-million by year-end. On a year-on-year basis, adjusted net debt increased by 28%.

Total capex (including equity-accounted joint ventures) increased by 45% year-on-year to $1.1-billion in 2021. This increase was largely owing to a 57% increase in sustaining capex to $778-million in 2021, which includes $137-million for the Brazil TSF conversion.

Total growth capex increased by 24% to $322-million in 2021.

Going forward, AngloGold’s production is expected to be weighted towards the second half of the year, with unit costs expected to decline at that time.

AngloGold is targeting production of between 2.55-million and 2.8-million ounces of gold for this year, with the majority of the production growth to come from Obuasi.

Ove...