Gold Fields and AngloGold Ashanti are suspending talks about combining two mines in Ghana, more than two years after they proposed the joint venture.
They agreed to “pause discussions” about combining the Iduapriem and Tarkwa assets to allow each company to focus on improving their respective standalone operations, according to statements on Tuesday from Gold Fields and AngloGold.
The producers had proposed a joint venture that could have created the largest gold mine in Africa. However, they were unable to secure permission from Ghana’s previous government, which was voted out of power in December, and had to resume negotiations with the new administration of President John Mahama.
Gold has surged roughly 75% since the proposed joint venture was announced and last month hit an all-time high above US$3 500 an ounce. AngloGold said it has identified changes in its plan for Iduapriem which”have the potential to unlock significant additional value.”
The strong gold price offers “significant flexibility and optimality” to the individual mines, “likely undermining the merits the JV presented,” Nedbank Group said in a note, adding that the tie-up could be reconsidered in the future.
Ghana’s government took the unusual step last month of refusing to renew the lease of Gold Field’s Damang mine, a smaller operation that’s approaching the end of its life, before agreeing a 12-month extension. The Johannesburg-based company has said it’s starting preparations to apply for the extension of Tarkwa’s mining rights, which expire in 2027.
Gold Fields’ Tarkwa produced 537 000 ounces of gold last year, while output from AngloGold’s Iduapriem was 237 000 ounces. Gold Fields would have owned 60% of the merged asset and AngloGold 30%, with the government holding the rest.
