South African gold mining giant AngloGold Ashanti is signaling its renewed focus on Brazil with a substantial investment boost for 2024. The company plans to channel 1.1 billion reais (roughly $198 million) into the country this year, with the majority of these funds earmarked for exploration activities. This increased investment comes even as AngloGold contemplates the potential sale of its Córrego do Sítio gold complex, located in the southeastern Brazilian state of Minas Gerais.
Córrego do Sítio, a key asset under AngloGold’s AGA Mineração unit, ceased operations in August 2023 due to financial losses. The other significant holding within AGA Mineração is the Cuiabá gold complex. This complex encompasses the Cuiabá and Lamego underground mines alongside the Cuiabá and Queiroz plants. The Queiroz plant underwent a temporary shutdown in February 2023 to allow for improvements at the Calcinados tailings storage facility.
In the wake of the Brumadinho tailings disaster in 2019, Brazil implemented stricter regulations for the mining industry. AngloGold responded proactively by undertaking the mandatory decommissioning of its existing waste storage facilities. This process involved transitioning to a filtered tailings stacking system, which the company successfully completed in 2022. By achieving this milestone, AngloGold became the leading large-scale gold producer in Brazil to eliminate all upstream tailings, a significant step towards environmentally responsible mining practices.
Earlier this week, AngloGold revealed that it was exploring various strategic options for the inactive Córrego do Sítio complex, including a potential sale. Marcelo Pereira, the company’s vice president for Latin America, spoke to local newspaper Valor about the ongoing discussions. “We are actively evaluating the possibility of resuming operations at the complex,” Pereira said, but did not disclose any specific details regarding these negotiations.
The Córrego do Sítio complex, which has been operational since 1989, consists of one open-pit mine and a single underground mine. In 2023, AngloGold’s total gold output in Brazil reached 338,000 ounces. The two mining complexes in question contributed roughly 13% to the company’s global production for that year. It’s worth noting that AngloGold’s Brazilian yield witnessed a significant increase of 52% in the first quarter of 2024, compared to the same period in 2023. Production figures jumped from 57,000 ounces to 86,000 ounces during this timeframe.
AngloGold’s commitment extends beyond its Brazilian operations. The company also boasts two greenfield exploration projects in Colombia and another in Nevada, USA.
Brazil Moves to Attract Investors
The Brazilian government has been actively implementing reforms to bolster the country’s mining sector and attract foreign investment. These reforms focus on streamlining regulations, improving transparency, and ensuring environmental responsibility. The government believes that these measures will make Brazil a more attractive destination for mining companies like AngloGold.
Industry analysts are cautiously optimistic about AngloGold’s increased investment in Brazil. While the potential sale of Córrego do Sítio suggests a strategic shift, the company’s focus on exploration indicates a long-term commitment to the Brazilian market. Moreover, the success of AngloGold’s strategy will likely hinge on several factors, including the effectiveness of Brazil’s mining reforms, the outcome of negotiations surrounding Córrego do Sítio and global gold prices.
Source: Mining.com
