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The
gold operation at Obuasi, 200km north west of Accra in Ghana,
was the major asset of Ashanti Goldfields Company (AGC), established
in London in 1897. AGC started underground mining in 1907;
Lonrho purchased AGC in 1969; and the Ghanaian Government
reduced its holding in 1994, leaving Lonrho (now Lonmin) with
a 33% stake and corporate plus private investors holding the
remainder.
In
the mid-1980s, the company launched a capital-intensive mechanisation
programme that was completed during 1998/9. However, these
efforts did not achieve the targeted gold output of 550,000oz/y
to 650,000oz/y at a cash cost below $200/oz.
AGC
reduced staffing at Obuasi from approximately 10,000 in 1996
to less than 6,600 in 2003 and invested in underground development
and plant – an investment of US$37.6m during 2003, for
instance. Even so, the management team formed after the April
2004 merger with AngloGold to form AngloGold Ashanti regarded
the operation as being under-capitalised.
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