Dear Stakeholder,

The year in review was defined by volatility and the uncertainty that comes from Russia’s war on Ukraine, rapidly rising inflation, higher interest rates, currency swings and sluggish growth in much of the world. These factors contributed to making global economic and operating conditions — already precarious before the start of 2022 – even more challenging.

The environment will likely remain challenging in 2023, with stubborn inflation, below-average growth and the war in Ukraine all likely to remain features of the operating landscape; the IMF in its World Economic Outlook 2023 sees the balance of risk ‘tilted to the downside’. Developing economies are especially vulnerable, with populations battling a cost-of-living crisis for citizens and unfolding debt crises for many governments.

In this environment, it is vital to ensure AngloGold Ashanti remains a vibrant and profitable, in order to continue making meaningful contributions to our shareholders and the societies in which we work as an employer, a reliable payer of taxes and a consumer of goods and services from our host communities. Our Economic value-added statement shows our performance in these key areas during the year.

Meeting objectives

The overall goal remained clear – to regain cost competitiveness safely and responsibly versus the peer group. The management team remained focused on achieving key objectives set out at the beginning of the year in pursuit of that goal, including through continued investment in the optionality and overall integrity of the portfolio. There remained an emphasis on an improved safety performance while also committing to clear, medium-term emission reduction targets to support the continued drive to achieve net zero emissions by 2050.

Particularly important during the year was the introduction of the new Operating Model, simplifying the company’s organisational structure and ensuring greater transparency, consistency and accountability. So, too, was the Full Potential Programme, a comprehensive approach to optimising the performance of each of our mines and plants, all in support of the overall cost competitiveness goal.

Several excellent new, experienced leaders from across the global natural resource industry were brought into the business. They bring news skills, perspectives, and experience in areas as diverse as finance, digital technology, global supply chain and project management, with the strong technical capability and institutional memory that exists within the company.

Early signs are encouraging; despite operating challenges encountered during the year, including flooding in Brazil and various supply chain blockages, as well as ongoing labour shortages in Australia and inflationary pressure across the portfolio, the business met its main performance objectives and achieved guidance on key metrics of production, capital expenditure and all-in sustaining costs. This result supported headline earnings of $544m and free cash flow before growth capital expenditure — the metric on which we base our dividend payments — of $996m.

Maintaining this greater consistency over a sustained period will be the ultimate test for our business.

Delivering catalysts for change

The year-on-year increase in cash costs held at around 6%, or roughly half of the aggregate input inflation experienced by the business. This result was underpinned by improvements across our key assets, which are well catalogued in this report. Of note was the excellent progress at Obuasi in Ghana after a sill-pillar collapse in 2021 caused production to be suspended for almost half the year. Following steps to improve the safe operation of the mine, the site team resumed mining, achieved their targets and advanced the reinvestment project that will facilitate the full ramp-up of the mine in the years ahead.

Realising Obuasi’s potential was one among the important catalysts achieved during the year. Others included the continued improvement in the overall Mineral reserve life of our portfolio, the release of the outstanding cash balances in the DRC and demonstrating the ability to offset corporate taxes against outstanding value-added tax balances in Tanzania.

Great progress was also made in Nevada, where the team combined ongoing exploration success with two bolt-on acquisitions to bring AngloGold Ashanti’s overall Mineral Resource near the town of Beatty, in the south of the state, to 8.4Moz. This programme of disciplined investment has provided us a large – and growing – development option in one of the world’s most attractive mining jurisdictions.

While these achievements are route markers in the journey to improve AngloGold Ashanti’s valuation, we have some way to go to narrow the deficit with our peer group. While our CEO, Alberto Calderon, has been clear that 2023 is a transitional year as we move toward narrowing the valuation gap with peers, we will continue to invest in improving the quality and integrity of the portfolio.

This includes the programme to buttress the Calcinados tailings storage facility which services the Queiroz plant within our AGA Mineração operating unit in Brazil. Important to note is that the operational and structural integrity of this TSF remains safe and stable, per the conclusions of recent assurance assessments by external consultants and AngloGold Ashanti’s own TSF team. The buttressing programme follows completion of a detailed risk assessment, required by a new regulation introduced in Brazil in 2022, and will bring the post-liquefaction factor of safety of this facility in line with the international standards currently regarded as best practice.

Improving sustainability

Safety remains the overall priority for our business and provides further evidence of improved performance. After two tragic fatalities on our mines in 2021, it is encouraging to report a fatality-free 2022 at the mines operated by the Company, alongside a 41% reduction in injury rates to well below our peer group average. Both the Board and Executive are seized with the importance of maintaining a safe workplace for all employees and contractors and will remain focused on implementing our safety strategy and maintaining a culture of continuous improvement.

The board approved a Discrimination and Harassment Standard during the year, supported by a communication campaign led by the CEO and his executive entitled ‘Don’t Cross the Line,’ which stressed a zero-tolerance approach to any disrespectful, inappropriate and harmful behaviour. Processes have been established for confidential, victim-centered reporting.

Our new Climate Change Strategy will help ensure we are well placed to cope with changing weather patterns. An important step in this journey was taken in October when new, ambitious targets were set to reduce absolute Scope 1 and 2 GHG emissions by 30%, by 2030 (as compared to 2021). This target, which follows a 67% reduction in emissions since 2007, carries the full endorsement of the Board. Successful execution will require significant investment in renewable energy across our main operating jurisdictions as we work with providers of solar and wind power to further improve the quality of our energy mix. Our goal remains to achieve net zero Scope 1 and 2 emissions by 2050, in line with the Paris Agreement.

Conclusion

Sadly, in October our fellow director, Nelisiwe Magubane, passed away suddenly. Nelisiwe’s unique perspective from a long career spent in Africa’s electricity sector, as well as her valuable contribution to discourse at the Board, will be sorely missed.

We are fortunate to have an experienced and dedicated management team to implement AngloGold Ashanti’s strategy with oversight from an experienced, multi-disciplinary board of independent, non-executive directors. The company’s leadership has been infused with exceptional talent from across the mining industry in the past year. The executive team has been finalised with the appointment of Gillian Doran as Chief Financial Officer and Executive Director from January of 2023. While we welcome Gillian to the Company, I would like – on behalf of the board – to thank Ian Kramer for expertly discharging his duties as Interim CFO.

Thanks are due, too, to my fellow directors for their diligence and guidance throughout this past year. On behalf of the Board, I also offer my thanks to the senior management team for their professionalism and dedication, to the thousands of employees who make it their business each day to ensure that this company will safely and responsibly improve its performance for the benefit of so many who depend on this business in one way or another for their livelihoods. Finally, to the diverse stakeholders upon who we depend for our licence to operate, I extend both our thanks and commitment to be responsible custodians of the resources entrusted to us.

Sincerely,

Maria Ramos
Chairperson
15 March 2023