Gold Fields and Johannesburg-based rival AngloGold Ashanti have proposed a joint venture in Ghana that would create Africa’s largest gold mine.
Gold Fields would hold two-thirds of the venture that would combine the operations of its Tarkwa mine with those of AngloGold’s neighbouring Iduapriem, the companies said in a joint statement on Thursday.
AngloGold would hold the remainder of the venture, and both companies would benefit from the synergies and cost savings.
“The proposed joint venture is an exciting opportunity to combine mining operations that are essentially part of the same mineral deposit and is something that Gold Fields and AngloGold Ashanti have discussed many times before over the years,” Martin Preece, interim chief executive officer at Gold Fields, said in the statement.
Gold Fields would operate the project, which would have an average annual output of almost 900,000 ounces for its first five years. Production would average 600,000 ounces over the life of the mine.
Like Gold Fields, AngloGold has shifted focus to more profitable mines in Ghana, Australia and Latin America as the industry in South Africa dwindles amid soaring costs and the geological challenges of exploiting the world’s deepest deposits.
Gold Fields shares rose 1.6% by 10:03 a.m. in Johannesburg, while AngloGold dropped 1.8%.
“This combination puts together two parts of the same world-class ore body, allowing us to share skills and infrastructure to significantly enhance every aspect of this mining operation, from exploration and planning, to mining and processing,” AngloGold CEO Alberto Calderon said.