AngloGold Ashanti (NYSE: AU) will have to keep trading shares in South Africa to conclude the sale of its last remaining assets in the country to rival Harmony Gold (NYSE: HMY), a government official said today.
The company, which announced the sale of its remaining asset in its home country earlier this year for US$300 million, must also keep its headquarters in Johannesburg, the source from the Department of Mineral Resources and Energy told Bloomberg.
AngloGold Ashanti first revealed plans to sell Mponeng, the world’s deepest mine and its last underground operation in South Africa, in May last year.
Harmony Gold expressed interest in the mine and related assets a few months later. The acquisition of AngloGold’s operations in South Africa, Harmony Gold said at the time, would help it sustain growth and replace capacity coming from its Masimong and Unisel mines, which are running out of ore.
The sale would mark AngloGold’s exit from South Africa to focus on more profitable mines in Ghana, Australia and the Americas.
The company, which recently lost Kelvin Dushnisky as chief executive, was born out of the mines bought and built by Anglo American (LSE: AAL), the mining mammoth founded by the Oppenheimer family more than a century ago.
The company was the dominant gold miner for decades, but progressively became weaker as it closed and sold old mines in South Africa, in favour of offshore investments.
Harmony’s CEO, Peter Steenkamp, has repeatedly said that South Africa is its main investment target.
South Africa’s gold industry, however, continues to face mounting challenges, including geological and safety aspects of extracting ore from the world’s deepest mines.
Harmony is betting on recreating the successful strategy applied after it bought Anglo’s Moab Khotsong mine in 2017. Half of that money has already been paid back, Steenkamp said.