JOHANNESBURG, November 6 – One of the world’s biggest bullion producers AngloGold Ashanti said it edged back into profit in the third quarter on Wednesday, thanks to ramped up output and lower production costs.
The South Africa based firm which has operations across Africa as well as in the Americas and Australia eked out a shareholder profit of $1 million in the quarter.
In the previous quarter the firm reported losses of nearly $2.2 billion on massive write downs linked to the slumping gold price.
The profit was achieved by a mixture of higher production, cost cutting and a weaker South African rand.
In the last quarter, production increased by 12 percent to top one million ounces, with major increases seen in Namibian and Ghanaian operations.
That helped AngloGold cut the cost of production from $898 per ounce in the second quarter to $809 per ounce in the third.
This despite facing higher wage bills in strike hit South Africa, where AngloGold followed other producers in accepting an average wage increase of around eight percent.
“Operational performance for the third quarter was strong with both production and costs coming in better than the previous quarter and market guidance,” the firm said in a statement.
The company added that cost cutting would continue, with hundreds of jobs cuts planed at its Obuasi mine in Ghana and plans to sell operations in Namibia.
The firm hopes to achieve at least $500 million in savings by the end of the year.
But the longer term picture remained difficult, with the company producing less in the first nine months of the year than it did in the same period in 2012 and getting a lower price for its product.
With the gold price continuing to tumble, more pressure on the firm’s bottom line looks likely.