Obuasi Mine

Location

Obuasi is located in the Ashanti region of southern Ghana, approximately 60km south of Kumasi and some 260km northwest of the capital Accra.

Location map

Project details

Obuasi, which has been primarily an underground operation, was placed on care and maintenance in 2016 pending the commencement of the redevelopment project. In June 2018, the Parliament of Ghana ratified the regulatory and fiscal agreements that cover the redevelopment of the mine and the Environmental Protection Agency issued environmental permits.

With the key permitting and regulatory processes finalised, the mining services contract could be signed as another key milestone in delivering a modern, mechanised underground mining operation with 5.8Moz of Ore Reserves and 30Moz in Mineral Resource, and a life of mine extending beyond 20 years.

Obuasi has operated at depths of up to 1,500m with a continuous history of mining dating back to 1897. The mining operations are located on a concession of approximately 201km2 (20,100ha) and within a largely forested region occupied by 240,000 people who are mainly subsistence farmers.

Underground access is via two main vertical shafts and a decline access while an additional shaft is used for dewatering the extreme north of the mine. The full extent of the underground operations is 8km.

Mineral extraction, by means of bacterial oxidation of the sulphide ore, is conducted at the South Treatment Plant, which has been in operation since 1993. Tailings are deposited at the South Tailings Storage Facility, located 4km to the northwest of the plant.

Implementation

The Obuasi redevelopment project will be implemented in two distinct phases.
The first blast took place in February 2019.

  • Phase 1 will comprise project establishment, mine rehabilitation and development, as well as plant and infrastructure refurbishment to enable production at a rate of 2,000t per day for the first operating year. Establishment of the project and operating teams have progressed well, and all key roles have been filled:
    • Detailed design has continued, focusing on the processing plant and underground infrastructure
    • Critical long-lead items have been ordered
    • Demolition of redundant processing plant structures has begun
    • Refurbishment planning has been completed
    • Works are set to begin by end March 2019
    • Housing refurbishment programme has begun
    • Expansion of the mining contractor’s camp is well advanced
    • The underground mining fleet has been delivered and commissioned
    • The underground mining contractor has been mobilised
    • Operational readiness activities, including design of the mine operating systems, has progressed to plan
  • Phase 2 will include refurbishment of the underground materials handling system, shafts and ventilation, as well as construction of the primary crusher, the SAG/ball circuit, carbon regeneration, a new gold room and tailings storage facility. This is expected to take a further 12 months and enable the operation to climb to 4,000t per day by the end of 2020. The operation is then expected to ramp up to 5,000t per day over the following three years.

Mine production in the first 10 years will focus on the upper orebodies and is expected to average 350,000oz to 450,000oz annually at an average head grade of 8.1g/t. In the following 10 years, average annual production of 400,000oz to 450,000oz is forecast. Total cash costs are expected to average between $590/oz and $680/oz and all-in sustaining costs between $750/oz and $850/oz.

Achievements to date

Local economic development

As a company, we are committed to ensuring that the redevelopment of this mine is rewarding and inclusive of all stakeholders.”
Kelvin Dushnisky, Chief Executive Officer, AngloGold Ashanti

AngloGold Ashanti has demonstrated its commitment to increasing meaningful local participation in the redevelopment of the Obuasi orebody by encouraging the creation of a joint venture.

The $375 million, five-year underground mining contract will be undertaken by Underground Mining Alliance Limited (UMA), a joint venture between Australia’s African Underground Mining Services (AUMS) and Accra-based Rocksure International, a wholly owned Ghanaian mining contractor, which will help develop mechanised, underground mining expertise within Ghana’s local mining and engineering sectors.

Around 550 people, predominantly Ghanaians, will be employed and trained by the contractors for the duration of the contract, allowing for the transfer of knowledge and skills.

Rocksure, which has a strong track record in open-pit mining, will work closely with Australia’s AUMS, which has significant experience in underground mining. Rocksure will have a 30% stake in the joint venture and AUMS the balance.

UMA will provide the full suite of underground mining services at Obuasi while AngloGold Ashanti will supply major capital equipment. To facilitate the joint venture and to save on operating costs and import duty, AngloGold Ashanti purchased the mining fleet at a cost of approximately $46 million. As announced in November 2018, this mining fleet purchase increases the initial project capital expenditure range from $450 million to $500 million to $495 million to $545 million. However, at the same time, this purchase reduces the contract rates over the period of the contract and is estimated to improve All-in sustaining costs (AISC) by approximately $25/oz. Given the delayed receipt of permit approvals in 2018, some capital expenditure has been deferred from 2018 into 2019 and from 2019 into 2020. The latest outlook on the capital spend profile is expected to be 10%, 60%, and 30% in 2018, 2019 and 2020, respectively.

The people of Obuasi

This section features profiles of the people behind Obuasi. Please check back monthly
for new stories.

Completing the Obuasi jigsaw

Graham Ehm, as Executive VP Group Planning and Technical at AngloGold Ashanti (AGA), has given his strategic oversight on several major mine development projects in his more than 20 years with the company. The Obuasi redevelopment project, though, might just be the most complex yet.

“A greenfield project involves the construction of new plant and infrastructure, and the building of a new operating team. However, Obuasi’s reconstruction involves the demolition of old and redundant plant and infrastructure, the extensive refurbishment of existing surface and underground infrastructure, and the construction of new facilities. In regard to operational readiness, the organisation and systems require a full redesign, recruitment and training to establish a modern organisation, and an integrated and accountable culture. A key challenge is integrating all these pieces, and still delivering the project on time and budget,” he says.

Graham explains that, in many African countries, mining companies can no longer work in isolation.

“True to AGA’s values and as expected by our key stakeholders, we are also aiming to undertake the reconstruction and operational readiness with the most Ghanaian participation possible, in procurement, contracting, direct and indirect employment,” he says.

The stakeholders include the Government of Ghana, traditional and local leadership, and the wider Obuasi/Adansi communities. The expectations are very high, and AGA is managing those expectations through clear and transparent policies and procedures.

“Nevertheless, we are unlikely to satisfy everyone. The new Obuasi will employ more skilled and considerably fewer people than in the past. This is not just a trend in Ghana but throughout Africa and the developing world.

“To sustain Obuasi’s success, the employment relationship needs modernising. We need to move away from the old multi-layered, hierarchical command and control models to a participative, engaged and empowered workforce in a much flatter organisation built on clear accountabilities,” says Graham.

At Obuasi AGA has introduced modern employment contracts, fair compensation based on annualised salaries. It’s not just best practice; it is what investors expect.

“We’re working with a lot of people understanding the scope of their roles and trying to put in place a modern operating mine system with defined systems and processes that help to train people to establish accountability and self-motivation. If we don’t get the culture of accountability in place, we won’t be successful,” he says.

This process of instilling a change in the work culture is one of the project’s biggest challenges.

Graham’s role with AGA sees him travelling to all the Company’s major projects but right now hardly a month goes past when he doesn’t find himself at Obuasi. His role is the interface for the team on the ground with the wider group and to ensure that the Obuasi team has all that is needed to successfully deliver the project.

“Achieving this is multi-disciplinary,” he says. “Each member of AGA’s Executive has a part to play. Ria Sanz (EVP: General Counsel, Compliance and Company Secretary) and Tirelo Sibisi (EVP: Group HR) are members of the AGA Ghana Board. Sicelo Ntuli (Chief Operating Officer: Africa Operations) will shortly join the Board and will ultimately be accountable for the mine when the redevelopment has been completed. Stewart Bailey (EVP: Corporate Affairs and Sustainability) monitors the project from a political, sustainability and investor viewpoint. Christine Ramon (Chief Financial Officer) manages the flow of funds to develop the project. Our CEO, Kelvin Dushnisky, has to be sure the project fits and is delivered within AGA’s overall strategy.”

AGA has to ensure that Obuasi integrates into the wider company when the project is completed and handed over for management under the Africa operating structure. A technical committee has been established to assist and support the team.

“It’s my role to oversee the integration of the new Obuasi into the Africa organisation and align systems with the rest of the company, so that when the transition from development project takes place the wider company doesn’t get an apple when it expected an orange,” says Graham, perhaps, making light of the extent of his task.

While we have a project and operations team directly delivering the project, many others are making a substantive contribution.

“We can make a big success of Obuasi. It has a 20-year mine life at 450 000/oz a year and there is scope beyond that. It’s an excellent project.”

Media room

Recent media releases

Contacts

AngloGold Ashanti, an international gold mining company with a globally diverse, high-quality portfolio of operations and projects, is headquartered in Johannesburg, South Africa. Measured by production, AngloGold Ashanti is the third-largest gold mining company in the world.

  • HEAD OFFICE
  • +27 (0)11 637 6000
  • 112 Oxford Road
    Houghton Estate
    Johannesburg 2198
    South Africa
  • +233 302743465
  • +233 302743400

Disclaimer

This site is provided by ANGLOGOLD ASHANTI LIMITED (“AngloGold Ashanti”) as a service for informational purposes only, subject to the terms and conditions provided below. This site does not create a business or professional services relationship between you and AngloGold Ashanti. By accessing and using this site, you accept and understand the following terms and conditions, without limitation or qualification. If you do not agree to the terms and conditions, please do not use this site. These terms and conditions will be revised on an ad hoc basis to ensure that they remain current and relevant, and so as to take into account any changes in conditions which include new or amended legislation. By using this site, you agree to check these terms and conditions for any amendments, from time to time.

Except as otherwise provided, all information, pages and materials provided on this site are owned by AngloGold Ashanti, Copyright © 2016, and are protected under worldwide copyright laws and international treaty provisions. You may not copy, republish, redistribute, or exploit in any manner any material from this site without the express written consent of AngloGold Ashanti.

AngloGold Ashanti and AngloGold Ashanti’s logo are trademarks of AngloGold Ashanti. These marks may not be copied or used, including on any social media platform or website, without our express written consent. Other brands and marks are the property of their respective owners and may require consent for their use.

You may download a single copy of pages or other materials found on this site onto a single computer for your personal, non-commercial, internal use only, provided that you do not modify these items in any way, incorporate them into another work, or alter or remove any copyright notice or proprietary rights legend. This is a license grant and does not constitute any transfer of ownership. This license is non-transferable and may be terminated or revoked at any time in our sole discretion. We reserve the right to restrict framing of this site, and you agree to promptly cease and discontinue any framing of all or any portion of this site upon your receipt of a written request from AngloGold Ashanti.

AngloGold Ashanti has no control over information, pages, other materials and software at sites hyperlinked to or from this one. A hyperlink to or from this site does not mean that we approve or endorse the hyperlinked site or make any representation regarding the accuracy, quality, safety or suitability of any information, pages, materials or software found there. In no event shall AngloGold Ashanti be responsible for your use of a hyperlinked site, or your reliance on any information provided on such a hyperlinked site. Any use you make of the information provided on this site, or on any site or service linked to by the site, is at your own risk. We reserve the right to restrict hyperlinks to this site to the maximum extent permitted by law, and you agree to promptly remove and eliminate any hyperlink to this site upon your receipt of a written request from AngloGold Ashanti.

The information, pages and other materials provided on this site, or which may be downloaded from this site, are provided "as is" and without warranties of any kind. AngloGold Ashanti does not warrant the accuracy, adequacy or completeness of such information, pages or materials and expressly disclaims liability for errors and omissions therein. Your use of this site is at your own risk, and it is your responsibility to take precautions to ensure that the pages and other materials that you access do not transfer any viruses, worms, trojan horses, time bombs or other items of a destructive nature to your personal computer, or to any other computer used by you. This site may not be compatible with the web browser or other software you use. There is no guarantee that the site will be available on a consistent or ongoing basis, and the provision of this site may be subject to periods of interruption or poor performance and may be terminated at any time. This site may include dated or inaccurate information, and information may be changed or updated without notice. AngloGold Ashanti makes no commitment to, and specifically disclaims any duty to, update or correct any such information. Accordingly, any use you make of the information provided on this site, or any reliance that you place on such information, is at your own risk.

ANGLOGOLD ASHANTI EXPRESSLY DISCLAIMS ALL WARRANTIES WITH RESPECT TO THIS SITE, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL ANGLOGOLD ASHANTI LIMITED BE LIABLE TO YOU FOR ANY DAMAGES WHATSOEVER, INCLUDING ANY DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL DAMAGES OR ANY OTHER DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, BUSINESS INTERRUPTION OR LOSS OF PROGRAMS OR DATA), ARISING OUT OF OR IN CONNECTION WITH YOUR USE OF THIS SITE OR ANY HYPERLINKED SITE, OR ANY CONTENT ON OR ACCESSED THROUGH THIS SITE, EVEN IF ANGLOGOLD ASHANTI HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. APPLICABLE LAW MAY NOT ALLOW FOR ALL OF THE ABOVE EXCLUSIONS, IN WHICH CASE ALL OR PART OF THIS PARAGRAPH MAY NOT APPLY TO YOU.

This site is interactive. You agree that any information, pages or other materials that you request from this site and that are sent to you are with your permission and consent, and you agree that you will have no recourse against AngloGold Ashanti in this regard. Although we have a total quality commitment to the users of this site, AngloGold Ashanti does not want to receive any confidential, proprietary, personal, or private information or data from you through this site, other than in certain specified circumstances.

If you reference this site or publish any content or information accessed on or from this site on any form of social media platform or website, you agree to be personally accountable for such information. You must expressly state on all such postings that the stated views are your own and do not necessarily reflect the views of AngloGold Ashanti. You must make it clear that you are speaking for yourself and not on behalf of AngloGold Ashanti. However, you may retweet content from the AngloGold Ashanti Twitter account on your own Twitter account. You may face legal action in respect of any commentary, defamatory, proprietary, discriminatory or libellous statements that you make with reference to AngloGold Ashanti. Users are encourages to report, in good faith, any instances of violation of these terms and conditions.

AngloGold Ashanti makes no representation or warranty that the information, pages and other materials found on this site are appropriate or available for use outside South Africa, and access to the information, pages and other materials found on this site from countries or territories where their use may be illegal is strictly prohibited. If you choose to access this site from a location outside South Africa, you are responsible for complying with all applicable local laws. Any dispute, action or other proceeding concerning this site shall be governed by and construed in accordance with the substantive laws of South Africa, without regard to principles of conflicts of laws.

Any rights not expressly granted herein are reserved.

Certain statements may be included on this site including, without limitation, those concerning: (i) the economic outlook for the gold mining industry; (ii) expectations regarding gold prices, production, reserves and cash costs (iii) the completion and commencement of commercial operations of certain of AngloGold Ashanti’s exploration and production projects, and (iv) AngloGold Ashanti’s liquidity and capital resources and expenditure, contain certain forward-looking statements concerning the gold mining industry and AngloGold Ashanti’s operations, economic performance and financial condition and its plans and expectations. Without limiting the foregoing, statements including the words "believes”, "anticipates”, "plans”, "expects”, and other similar expressions are also considered to be forward-looking statements. Forward-looking statements reflect, among other things, management's plans and objectives for future operations, current views with respect to future events and future economic performance and projections of various financial items. These forward-looking statements also involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those implied by such forward-looking statements. Factors that may cause actual results to differ materially include, among other factors, (i) changes in economic and market conditions, (ii) success of business and operating initiatives, (iii) changes in the regulatory environment and other government actions, (iv) fluctuations in gold prices and exchange rates, (v) business and operational risk management, and (vi) the factors identified in the "Risk Factors" section and elsewhere in our Form 20-F filed annually with the United States Securities and Exchange Commission (“SEC”). AngloGold Ashanti does not intend to, and specifically disclaims any duty to, update or correct such information. Accordingly, any use you make of the information provided on this site, and specifically any use you make of the statements described above or of any forward-looking statements, or on any reliance that you place on such information, is at your own risk.