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6-K 1 anglo_ashanti.htm Page 1

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

Report on Form 6-K dated May 11, 2017

Commission File Number 1-14846

AngloGold Ashanti Limited

(Name of registrant)

76 Rahima Moosa Street

Newtown, 2001

(P.O. Box 62117, Marshalltown, 2107)

South Africa

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form
20-F or Form 40-F.

Form 20-F X Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):

Yes No X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):

Yes No X

Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.

Yes No X

Enclosure: Press release ANGLOGOLD ASHANTI LIMITED – INTEGRATED REPORT FOR THE
YEAR ENDED DECEMBER 31, 2016

I N T E G R A T E D R E P O R T

2 0 1 6

RATE THIS REPORT

H O W T O U S E T H I S R E P O RT

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To create value for our

shareholders, our employees

and our business and social

partners through safely and

responsibly exploring, mining

and marketing our products.

Our primary focus is gold, but

we will pursue value creating

opportunities in other minerals

where we can leverage our

existing assets, skills and

experience to enhance the

delivery of value.

OUR

MISSION

OUR

VALUES

C O N T E N T S

I N T E G R AT E D R E P O RT

2 0 1 6

OVERVIEW

SECTION 1

SECTION 2

BUSINESS
CONTEXT

SECTION 3

STRATEGY

SECTION 4

PERFORMANCE
REVIEW

SECTION 5

LEADERSHIP AND
ACCOUNTABILITY

SECTION 6

SHAREHOLDER
AND CORPORATE
INFORMATION

CLICK TO VIEW

Overview

Shareholder information

S E C T I O N 1

O V E R V I E W

About our reports /

Directors’ statement of responsibility /

Corporate proﬁle /

Chairman’s letter /

Highlights of the year /

CEO’s review /

An overarching view of our reports, the

Chairman’s message to our stakeholders,

the profile of the company and the year’s

highlights, as well as the CEO’s account

of delivery on the last year’s commitments

and an outlook for the year ahead.

Picture:

Kibali, DRC

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A n g l o G o l d A s h a n t i L i m i t e d ’s

( A n g l o G o l d A s h a n t i ’s ) 2 0 1 6 s u i t e

o f r e p o r t s i s m a d e u p a s f o l l o w s :

Integrated Report

<IR>

is the primary

document in our suite of reports and provides

a concise overview and explanation of

our performance in terms of our strategic

objectives and the related outlook for the

company. Both ﬁnancial and non-ﬁnancial

performance are reviewed.

Notice of Annual General Meeting and

Summarised Financial Information (Notice

of Meeting)

<NOM>

is produced and posted

to shareholders in line with the JSE Listings

Requirements and the requirements of the

South African Companies Act, 71 of 2008,

as amended (Companies Act).

Sustainable Development Report

<SDR>

compiled in line with the Global Reporting

Initiatives’ (GRI’s) latest G4 guidelines, is

published together with the accompanying

GRI scorecard and supplementary data.

Mineral Resource and Ore Reserve

Report

<R&R>

, presented in line with the

SAMREC and JORC codes, provides detailed

information on all our operations and projects.

Annual Financial Statements

<AFS>

are

prepared in accordance with the International

Financial Reporting Standards (IFRS).

A dedicated annual reporting website,

www.aga-reports.com, hosts PDFs of the full

suite of these reports to facilitate ease of access

by and communication with our stakeholders.

A B O U T O U R R E P O R T S

S C O P E A N D B O U N D A RY
O F R E P O RT S

The 2016 suite of reports covers the year from

1 January to 31 December 2016. We also report

on any material events that have occurred from

year-end to the date of the reports’ approval by

the board on 22 March 2017.

The reports cover the entire company and its

main business units and functions, including

our joint ventures and investments, over

which we exercise control or have signiﬁcant

inﬂuence. Performance is reported regionally,

in line with our corporate structure. Full

disclosure is provided for all operations

managed by AngloGold Ashanti. Those

operations in which we have an ownership

interest – Kibali in the Democratic Republic

of the Congo (DRC) and Morila in Mali –

and which are managed and operated

by Randgold Resources Limited, our joint

venture partner in these operations, are

partially reported in terms of their safety

and environmental and socio-economic

performance. There have been no signiﬁcant

changes to the scope, boundary or

measurement methods applied in this report

and, where restatements to comparatives have

been made, these are as indicated.

Although we have a diverse range of

stakeholders, each with their own speciﬁc

information requirements, this report is aimed

primarily at investors, ﬁnanciers and potential

investors. Stakeholders are also referred to

the supplementary reports in this suite and the

<SDR>

, in particular, for additional information.

As this is a group-level report, operational

targets and performance are discussed at

regional level rather than per individual site,

although some operational detail is provided

where appropriate. Detailed information,

including maps of our exploration activities of

both our greenﬁelds and brownﬁelds studies,

is available on the AngloGold Ashanti website,

www.anglogoldashanti.com.

Information relating to joint ventures and other

interests is provided for context and where

deemed to be material. Production and capital

expenditure are expressed on an attributable

basis, unless otherwise indicated.

Employee data, average workforce data,

including employees and contractors, are

reported for AngloGold Ashanti with joint

ventures reported on an attributable basis.

Employee and workforce data reported

includes both our employees and contractors.

All-in sustaining costs ($/oz) and all-in costs

($/oz) exclude stockpile write-offs.

The intense focus on containing and

managing costs and improving margins

continued in 2016, as did active

management of our portfolio and reducing

net debt levels while retaining long-term

optionality in our portfolio.

Visit our reports website:
www.aga-reports.com

Visit our corporate website:
www.anglogoldashanti.com

Download the full suite of reports

Picture:

Geita, Tanzania

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A B O U T O U R R E P O R T S

( C O N T I N U E D )

T H I S I N T E G R AT E D R E P O RT

In compiling this report, we have been guided

by the International Integrated Reporting

Council’s (IIRC) framework on integrated

reporting, the South African Companies Act

and JSE Listings Requirements. While we

are currently reporting in line with the King

Report on Governance for South Africa 2009

(King III), we have begun to align with that

report’s successor, the Report on Corporate

Governance for South Africa 2016 (King IV).

The content of this integrated report is

based on our overarching strategy, the

primary aim of which is to create value

by generating sustainable free cash

ﬂow improvements and returns from our

exploration, mining and processing activities.

In this report, we describe what we have

done to create value and to achieve our

stated strategic objectives in the past year,

what we have used to do this, what the

impact of these actions has been, the risks

affecting our ability to achieve our strategic

objectives, the circumstances that have

affected our ability to generate value and

how well we have performed towards our

goal of creating value.

The material risks and issues discussed in this

report are considered to be those most likely

to affect the group’s sustainability. In identifying

these, we have taken into account the external

environment in which we operate, our current

performance and feedback obtained from

stakeholders during the year, while we have

also identiﬁed opportunities for the business.

The report also covers the company’s tax

strategy, which is discussed in the Corporate

Governance section. Further information on

AngloGold Ashanti’s material sustainability

issues is presented in the

<SDR>

A P P R O VA L S A N D A S S U R A N C E

Several internal processes that include, among

others, management assurance and reviews

by internal audit of the information and data in

our reports are conducted.

Operations within AngloGold Ashanti were

subjected to risk-based, integrated, combined

assurance reviews focusing on commercial,

safety and sustainability aspects of the

business. The outcome of these reviews and

external assurances, as well as the independent

technical reviews conducted, provided

reasonable assurance to allow the board, on

the recommendation of the Audit and Risk

Committee, to determine the effectiveness of

the group’s system of internal controls.

The board and executive management

consider the matters discussed in this report

to be those that most inﬂuence our ability to

successfully achieve our strategic objectives,

create value and manage the risks we face,

and believe that this report fairly records our

performance in the past year.

D I R E C T O R S ’ S TAT E M E N T O F R E S P O N S I B I L I T Y

The Board of Directors of AngloGold Ashanti, assisted by the Audit and Risk Committee,

is ultimately responsible for overseeing and conﬁrming the integrity and completeness of

this

<IR>

and the entire suite of 2016 reports, with the Social, Ethics and Sustainability

Committee overseeing the

<SDR>

The board, having reviewed and applied its collective mind to the preparation and

presentation of this report, declared that the Integrated Report addresses all material issues

and fairly presents the organisation’s integrated performance and its impacts.

The board, on the recommendation of the Audit and Risk Committee, approved the

Integrated Report 2016 on 22 March 2017.

Sipho M Pityana

Wiseman Nkuhlu

Srinivasan Venkatakrishnan

Christine Ramon

Chairman

Deputy Chairman

Chief Executive Ofﬁcer

Chief Financial Ofﬁcer

C O R P O R AT E S TAT U S
D U R I N G 2 0 1 6

•

Obuasi, which was impacted by the

occupation of illegal miners, transitioned

to care and maintenance

•

The closure process at Yatela

continued and is scheduled to be

completed in 2021

•

All other assets remained fully operational.

•

Disclosure in this report is limited to

continuing operations, having sold

Cripple Creek & Victor in the United

States in 2015

“The content of this integrated

report is based on our overarching

strategy, the primary aim of which

is to create value by generating

sustainable free cash flow

improvements and returns.”

Note: AngloGold Ashanti reports its group ﬁnancial
information in US dollars (US$) in all its reports.
Unless otherwise stated, the use of ‘$’ or ‘dollar’
refers to US dollars.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C O R P O R A T E P R O F I L E

A n g l o G o l d A s h a n t i , a n

i n t e r n a t i o n a l g o l d m i n i n g

c o m p a n y w i t h a g l o b a l l y

d i v e r s e , h i g h - q u a l i t y p o r t f o l i o

o f o p e r a t i o n s a n d p r o j e c t s , i s

h e a d q u a r t e r e d i n J o h a n n e s b u r g ,

S o u t h A f r i c a . M e a s u r e d b y

p r o d u c t i o n , A n g l o G o l d A s h a n t i

i s t h e t h i r d - l a r g e s t g o l d m i n i n g

c o m p a n y i n t h e w o r l d .

OUR PORTFOLIO OF ASSETS

Our portfolio of

17 MINES

AND 3 PROJECTS

IN TEN COUNTRIES,

c o m p r i s e s l o n g - l i f e , r e l a t i v e l y l o w - c o s t

o p e r a t i n g a s s e t s w i t h d i f f e r i n g o r e b o d y

t y p e s , l o c a t e d i n k e y g o l d - p r o d u c i n g

r e g i o n s . T h e s e o p e r a t i n g a s s e t s a r e

s u p p o r t e d b y g r e e n f i e l d s p r o j e c t s a n d

a f o c u s e d e x p l o r a t i o n p r o g r a m m e .

O U R B U S I N E S S

ur business activities span the full

spectrum of the mining value chain,

including mitigation of the impact of our

activities on the varied and many communities

and environments in which we operate. To

maintain and strengthen our social capital, we

aim to create sustainable value for shareholders,

employees, and social partners through safe and

responsible mining practices and capital discipline.

Over the past four years, AngloGold Ashanti

has transformed itself in order to increase

efﬁciencies and competitiveness with a focus on

safety and sustainability performance, alongside

growth in the production of high-margin ounces,

reduced operating and overhead costs and

the generation of positive cash ﬂows. Given the

current market environment, and the scrutiny

on ﬁnancial capital allocation, we ensure that

we distribute available capital responsibly, in line

with business requirements. We do this while

optimising our internal expertise to aggressively

identify and implement operational efﬁciencies

and excellence, reducing overhead structures,

improving capital discipline and pursuing other

initiatives to improve business performance,

with an emphasis on workplace safety. Our

overall focus remains continued debt reduction

to further strengthen our balance sheet, and

improving the quality of our portfolio by unlocking

value from our existing operations, and our

brownﬁelds opportunities, the Colombian

portfolio and Obuasi.

Our organisational and management

structure is aligned with global best practice

in corporate governance. By using our

human capital efﬁciently and effectively, our

group support functions cover planning and

technical, strategy, sustainability, ﬁnance,

human resources, legal and stakeholder

relations. The planning and technical function

focuses on identifying and managing

opportunities and the maintenance of long-

term optionality, ensuring optimal use of our

intellectual capital through a range of activities

that includes brownﬁelds and greenﬁelds

exploration, and innovative research and

technology development with a focus

on mining excellence.

OUR OPERATIONS AND PROJECTS ARE
GROUPED REGIONALLY AS FOLLOWS:

South Africa

/ Vaal River, West Wits and Surface Operations

Continental Africa

/ Democratic Republic of the Congo,

Ghana, Guinea, Mali and Tanzania

Americas

/ Argentina, Brazil and Colombia

Australasia

/ Australia

Picture:

Sunrise Dam, Australia

I N T E G R AT E D R E P O RT

2 0 1 6

LOCATION

OF ANGLOGOLD

ASHANTI’S OPERATIONS AND
ADVANCED PROJECTS

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C O R P O R A T E P R O F I L E

( C O N T I N U E D )

E X P L O R AT I O N

Our operating assets are supported by an

exploration programme aimed at providing an

organic growth pipeline from which to generate

signiﬁcant value for the company over time.

Greenﬁelds and brownﬁelds exploration is

undertaken in both established and new

gold-producing regions through managed and

non-managed joint ventures, strategic alliances

and wholly-owned ground holdings. Recent

world-class discoveries include La Colosa,

Gramalote and Quebradona (Nuevo Chaquiro)

in Colombia, and Tropicana in Australia.

O U R P R O D U C T

Once mined, gold ore is processed into

doré (unreﬁned gold bars) on site and then

dispatched to precious metals reﬁneries

for reﬁning to a purity of at least 99.5%, in

accordance with the standards of ‘good

delivery’ as determined by the London Bullion

Market Association (LBMA). This reﬁned gold

is then sold directly to bullion banks.

While gold is our principal product, several

by-products also make up a small proportion

of our manufactured capital. Our by-products

are silver in Argentina, uranium in South Africa

and sulphuric acid in Brazil. In compliance with

all applicable legislation, great care is taken

to ensure the safe production, transportation

and storage of uranium and sulphuric acid,

which are hazardous materials. For instance,

AngloGold Ashanti complies with the

International Atomic Energy Agency’s (IAEA)

safeguards regarding all its sales contracts and

shipments of uranium.

For more information on uranium and
its handling process, see page 61 in the
South Africa regional review.

S H A R E H O L D E R S

AngloGold Ashanti is an independent gold

producer, with a diverse spread of shareholders

that includes some of the world’s largest ﬁnancial

institutions – see Shareholder Information.

The respective national governments hold

direct interests in our operating subsidiary in

Guinea and joint ventures in the DRC and Mali.

In Argentina, Fomicruz, a state company in the

province of Santa Cruz, has an interest in the

Cerro Vanguardia operation. The Government of

Ghana also holds a 1.56% stake in the company.

The primary listing of the company’s ordinary

shares is on the JSE in South Africa. Its

shares (or depository receipts) are also listed

on the New York, Australian and Ghana stock

exchanges. More detailed information on our

listings on various stock exchanges is provided

in Shareholder Information.

At 31 December 2016, AngloGold Ashanti had

408,223,760 ordinary shares in issue and a

market capitalisation of $4.29bn (2015: $2.88bn).

Post year-end, at 22 March 2017, the date

of approval of this report by the board, the

company’s market capitalisation was $4.53bn.

GEOGRAPHIC
DISTRIBUTION
OF SHAREHOLDERS

as at 31 December 2016

•

United States

•

South Africa

•

United Kingdom

•

Rest of Europe

•

Asia

•

Ghana

•

Rest of world

Picture:

AGA Mineração, Brazil

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A N G L O G O L D A S H A N T I
S TA K E H O L D E R S ,

t was a year in which the unexpected

occurred not once, but twice, with political

convention upended in developed markets

and some measure of stability returning to

emerging markets. It was the year in which

investors had to familiarise themselves with

the reality of negative yields, oil prices stayed

low relative to their record high levels in the

past decade, while China continued to face

questions about its growing pile of debt. The

renminbi weakened further along with the

pound and the euro, and the dollar went from

strength to strength.

In June, voters in the United Kingdom

overturned conventional wisdom by electing to

exit the European Union, a move that caused

severe turbulence in currency markets and

initially spurred gold prices higher. The United

States sprung another surprise later in the year

by electing Donald Trump into the White House

on an anti-immigration, anti-regulation ticket.

President Trump’s election set equity markets

on a tear, raising hopes of more sustained

growth in the US and with it, the prospects of

additional interest rate hikes to build on the two,

25-basis point increases at the end of 2015

and 2016 that put downward pressure on the

gold price. Meanwhile, Indian Prime Minister

Narendra Modi’s surprise demonetisation kept

a ﬁrm lid on gold demand in one of the world’s

largest precious metal markets.

For all of the optimism for a recovery in

global growth, the unpredictability of the new,

emerging political order – and its implications

for generations-old security alliances, economic

networks and trade partnerships – has ensured

that many investors remain somewhat wary of

the future trajectory of the world economy. For

those sceptics, gold remains an increasingly

important component in insuring against

the fallout from any potential upheaval. This

safe haven appeal of bullion continues to be

reﬂected by the fact that the price has held

up relatively well despite lacklustre jewellery

demand and the growing consensus for

multiple interest rate hikes in 2017.

We experienced a rollercoaster year for gold

prices in 2016, with a strong ﬁrst half – in which

the price rose from $1,061/oz at the start of the

year to its peak of $1,375/oz in July – before

ending the year at $1,151/oz. Currencies in

Brazil and South Africa started the year near

record lows before rebounding strongly by year

end, ﬁrst giving a measure of margin relief for our

operations in those countries and then taking it

away as the currencies strengthened. AngloGold

Ashanti’s US shares – its most liquid, publicly

traded securities – followed a similar trend,

outperforming global peers for much of 2016

before ending the year up 50%, more or less in

line with these peers.

The constantly shifting macroeconomic

and political picture remains an important

backdrop to the performance of the company,

which continues to operate very much at the

conﬂuence of global politics and the world’s

currency and commodity markets. Given the

immovable nature of our assets, the fortunes

of the mining industry will always remain

closely tied to the prevailing political climate

globally and in the countries in which we

operate. This more often than not makes for

turbulent operating conditions.

It is for this reason that we opted for ‘self-

help’ measures in 2014. At the core of this

approach was the creation of a gold mining

company that was self-sustaining, could

reduce debt from internal sources, deliver

returns above the cost of capital over the

long term and withstand price shocks in the

short term. As you will see from the CEO’s

review in this report, the management team

did exceptionally well once again in executing

against that strategy: free cash ﬂow increased,

margins widened, debt fell further and

signiﬁcant improvements were made in the

broad area of sustainability, most notably in

safety and environmental stewardship.

Now, from this solid foundation of a de-geared

balance sheet, we are in a position as the

board to approve the management team’s

plan to reinvest in the asset base in order to

widen margins in the longer term and extend

mine lives of some of our key assets. As

the shareholders’ representative, the board

believes that this inward-focused approach to

create long-term value, will be more effective

C H A I R M A N ’ S L E T T E R

A s w e l o o k b a c k o n 2 0 1 6 ,

w e c a n r e f l e c t o n a n o t h e r

y e a r m a r k e d b y s i g n i f i c a n t

v o l a t i l i t y i n f i n a n c i a l a n d

c o m m o d i t y m a r k e t s a n d

s e i s m i c c h a n g e a c r o s s t h e

w o r l d ’s m a j o r e c o n o m i e s .

Sipho M. Pityana

Chairman

View CV

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C H A I R M A N ’ S L E T T E R

( C O N T I N U E D )

than pursuing acquisitions which are by nature

riskier and more expensive. While we continue

to review this approach given the prevailing

conditions, we believe that it remains well

suited to most market environments.

We will continue to apply a stringent set of

investment criteria to our investments and

will seek to eliminate production that does

not meet that criteria. In focusing on the

proﬁtability of our production, rather than on

the absolute volume of our output, we will

ensure the sustainability of our business, and

improve its self-sufﬁciency.

It is important to note that we will continue to

keep the integrity of the balance sheet in sharp

focus, particularly given clear recent evidence

of how equity value can be destroyed when

investors believe debt levels are too high. It is

also true that high absolute levels of borrowing

also present a strategic straitjacket for any

company, closing off avenues that could

otherwise be used to unlock latent value.

The fact remains that our equity is undervalued

relative to many of our global peers. We are

focused on this valuation gap and on ﬁnding

ways to narrow it.

Our Obuasi mine in Ghana has been a weight

on our valuation for several years, ﬁrst as a

signiﬁcant operating drain on cash ﬂows, and

now with the reduced care and maintenance

tab of about $70m a year. The invasion and

subsequent occupation of the mine by as

many as 12,000 illegal miners in 2016 has now

been resolved, and it now falls to us to ﬁnd a

lasting resolution to the perennial challenge

presented by this asset. We are of course

weighing each of our options in this regard

and are seized with the urgency of the issue

for all stakeholders concerned. We hope that

the new, investment-oriented administration

in Ghana, voted in after the recent election,

will make discussions over the future of this

important asset more constructive.

The management team is also working on

maintaining operational consistency, given

that improving the predictability of operating

results remain the bedrock of any rerating.

This will, above all, require the delivery of an

operating turnaround at our South African

operations, which have struggled to deliver to

their potential in recent years given a range of

internal and exogenous factors. This will need

to be balanced with the over-arching priority

that we place on safety.

While we work on improving our own

operating performance, we are also engaged

in the critical area of improving safety and

accelerating transformation in South Africa.

I’m proud to say that AngloGold Ashanti

has performed remarkably well against the

transformation targets set out in the Mining

Charter, achieving (and in most cases

surpassing) the original objectives in respect of

Picture:

Mponeng, South Africa

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C H A I R M A N ’ S L E T T E R

( C O N T I N U E D )

equity ownership, employment equity, human

resource development, procurement and

enterprise development, employee housing,

development of mining communities and

sustainability. It is our ﬁrm belief that that these

successes are not an end in themselves, but

rather important milestones in our journey

toward a fuller transformation of this critical

sector for the South African economy.

Latest Mining Charter scorecard

Yet, with the encouraging transformation

strides made by South Africa’s mining sector,

it is worth noting that persistent regulatory

uncertainty in South Africa remains a bugbear

for many potential investors. The South

African mining industry once again stands at

a crossroads, with the Department of Mineral

Resources reviewing important regulations

and legislation, and thereby creating lingering

uncertainty for providers of capital who have

the option of putting their money to work in

any number of jurisdictions around the world.

It is a truism that capital will always ﬂow to

countries with a more certain outlook.

The draft of a reviewed Mining Charter was

presented to the industry for discussion in April,

2016 (sadly, without the normal prior consultation

with the Chamber of Mines), while important

amendments to the Minerals and Petroleum

Resources Development Act are four years in the

making without resolution at the time of writing

of this letter. This is hardly the way to boost

investment and create inclusive growth.

Without an unwavering commitment to

existing rules that protect security of tenure

and other important operating conditions,

the discretionary capital that South Africa so

desperately needs to grow its mining industry

and create jobs, will certainly ﬂow elsewhere.

This is already evident in the continued

contraction of the mining sector, characterised

by falling employment and production levels.

Along with the Chamber of Mines, we hold

out our hand to the DMR to enter into a more

positive, ongoing engagement with the industry

in order to reach certainty on a constructive and

consistent policy framework that will encourage

new, job-creating inward investment. Failure to

re-establish this partnership risks the continued

failure of the industry to live up to its potential

as an important contributor to growth

and employment.

The shifting of the goalposts with respect

to policy, and often in response to the more

populist political shifts we have witnessed

across the globe in this past year, remain

a key risk for mining companies generally.

This remains a condition without which

investment becomes increasingly difﬁcult.

Rather than focusing purely on who gets the

bigger slice of a shrinking pie, we need to

ﬁnd practical ways to grow the whole pie, to

the beneﬁt of all.

Another pre-requisite for growing investment

in any jurisdiction, as I mentioned last year,

is good governance and transparency, both

from the private and the public sector. Our

values not only demand unimpeachable

behaviour from us, but also that we

continually evaluate our performance against

the highest standards, recognise where we’ve

fallen short and take steps to improve. We

expect the same from our partners in the

private sector, labour and government in

each of our operating jurisdictions. Working

to these standards is critically important

if we are to properly turn national mineral

endowments to account for an increasingly

wider cross section of the population.

Our values are as important to the company

– and perhaps even more so – than good ore

bodies, sound capital allocation discipline,

or strong cost management. An unremitting

focus on safety is an integral part of our

culture and central to how we conduct our

operations, as is our tax policy which is

not only transparent but also appropriately

conservative. These are important attributes

for employees, host communities and the

governments of the jurisdictions in which we

operate, who face their own ﬁscal challenges.

But it is our integrity which is our most

important asset, and one we must preserve

at all costs. Without it we risk the very viability

of the company in the longer term, and our

continued licence to operate. I must thank my

fellow directors for their valuable contribution

over the past year and for their unwavering

support in ensuring that we continue to live

those values.

I must also thank Venkat, our CEO, for his

steadfast and focused leadership of the

business. Similarly we pay our gratitude to the

excellent executive management team that

he leads and all the employees of AngloGold

Ashanti, for ensuring that we don’t simply

pay lip service to safety; accountability for

our actions; our commitment to engage with

dignity and respect; to improving diversity;

and to ensuring that we remain good

custodians of the environment and mineral

resources, for the beneﬁt of all.

Together we will commit our unstinting efforts

to unlocking value and remaining good

custodians of your capital in the year ahead.

Sipho M. Pityana

Chairman

22 March 2017

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

H I G H L I G H T S O F T H E Y E A R

S a f e t y

P r o d u c t i o n

E m p l o y e e s

F r e e c a s h f l o w

C o s t s

C a p i t a l e x p e n d i t u r e

E n v i r o n m e n t

C o m m u n i t y

A n g l o G o l d A s h a n t i a g a i n g e n e r a t e d s t r o n g c a s h f l o w s i n 2 0 1 6 , b o o s t e d

b y t h e e n c o u r a g i n g t u r n a r o u n d i n p r o d u c t i o n i n t h e s e c o n d h a l f o f t h e

y e a r a n d t h e h i g h e r g o l d p r i c e , f u r t h e r s t r e n g t h e n i n g t h e b a l a n c e s h e e t

a n d i m p r o v i n g f l e x i b i l i t y.

H I G H L I G H T S O F 2 0 1 6

Picture:

Cerro Vanguardia, Argentina

I N T E G R AT E D R E P O RT

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C E O ’ S R E V I E W

A n o t h e r y e a r h a s c o m e t o a n

e n d d u r i n g w h i c h w e w o r k e d

h a r d t o c r e a t e v a l u e f o r o u r

g r o u p o f s t a k e h o l d e r s a m i d s t

v o l a t i l e m a r k e t c o n d i t i o n s .

Srinivasan Venkatakrishnan:

Chief Executive Ofﬁcer

D E A R S H A R E H O L D E R S ,

e again delivered signiﬁcant

improvements in key areas of the

business as we executed on our

strategy of improving sustainable cash

ﬂow and returns. To recap, this strategic

objective is supported by ﬁve key business

objectives, namely:

•

safe production, the industry’s best people

and a progressive sustainability model

•

prioritising balance sheet strength and ﬂexibility

•

production improvements, cost management

and sound capital discipline

•

a constant drive to consistently manage and

improve the quality of our portfolio

•

ensuring we keep long-term optionality, at an

affordable cost, ﬁrmly on our radar

AngloGold Ashanti remains one of the

industry’s most geographically diversiﬁed

companies. Roughly three quarters of our

production in 2016 came from our international

operations as we continued to improve the

balance in our portfolio.

The above strategy was adopted in 2013 after

a collapse in the gold price from near-record

highs and amidst unsustainably high debt and

costs. We believe now, as we did then, that

the strategy is ﬁt for any gold market, and

provides the pillars for us on which to build a

self-sustaining gold business that can deliver

returns above its cost of capital over the long

term, while withstanding the inevitable price

shocks that so often destabilise gold mining

businesses in the short term.

We have continued to execute on our core

strategy over the past four years, ﬁrst by

reducing debt and overall leverage through

cost reductions, efﬁciency improvements and

asset sales; then by creating a more consistent

performance track record and by improving

safety and environment stewardship; and now,

by investing in our portfolio to realise margin

expansion and life extension of our key assets.

At no stage have we asked shareholders to

foot the bill for this reconstruction. In fact, we

remain one of only two gold majors that have

not issued new equity since 2010 – it’s an

exclusive club that we are proud to belong to.

You will no doubt have seen many of our

peers turning to acquisitions to shore up their

reserves and bolster project pipelines. We

have deliberately opted to spend money on

our own project portfolio rather than enter the

feverish bidding for overpriced assets that

we’ve seen in recent months. We believe ﬁrmly

that our low risk, high-return route – all self-

funded and in countries and assets we know

well – offers better value for our shareholders.

View CV

r e m a i n s o u r

h i g h e s t p r i o r i t y

S A F E T Y

Picture:

Geita, Tanzania

I N T E G R AT E D R E P O RT

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C E O ’ S R E V I E W

( C O N T I N U E D )

The assets earmarked for increased

investment in 2017 include: Cuiabá, in

Brazil, where a greater rate of Ore Reserve

development is expected to improve mining

ﬂexibility hampered by geotechnical challenges

in recent years; Iduapriem in Ghana, where

we will strip waste rock from the Teberebie

ore body to extend mine life, and lower cash

costs; Geita, in Tanzania, where the original

20-year old power plant will be replaced to

ensure reliable electricity supply, while the

continued ramp-up of underground production

will replace depleting open-pit ore in future; at

Sunrise Dam, in Australia, where investment

in plant modiﬁcations are expected to improve

gold recoveries; and at Kibali, in the DRC,

where additional Ore Reserve development

will be conducted ahead of a ramp-up in

underground production.

The combination plant project at Siguiri in

Guinea is now well underway to extend mine

life and improve production at better margins.

In Mali, subject to the Government giving us

the consents and agreements needed, we

are ready to start the hard rock sulphides

project along with our joint venture partner in

Sadiola. This investment will extend mine life

by around a decade and increase production

and margins from current levels.

In South Africa, a feasibility study is underway

at Mponeng to access the ore body below

126 level, extending mine life and ultimately

increasing production at better margins.

Even through this investment phase, we will

continue to be careful in evaluating every

ounce in our future plans against our margin

and return criteria. We will also not hesitate

to remove production that does not meet our

margin and return hurdles. It is this approach

that will ensure that we thrive in the long term.

At Obuasi, where we had been working on

potential redevelopment options for this

important ore body, we will seek a sustainable

resolution to the mine’s future in 2017. This

was after a site invasion in early February

by illegal miners – who peaked at around

12,000 in number – lasted for much of 2016,

causing a cessation of all non-essential

activity on site. This illegal-mining activity has

subsequently been peacefully cleared. We are

now evaluating the condition of the ore body

and infrastructure and will use the data to

update our feasibility study into the proposed

redevelopment of the mine. We will keep all

of our options open with respect to the future

of this high-quality ore body which remains

important for all stakeholders.

T H E Y E A R I N R E V I E W

We set ourselves an ambitious set of tasks for

2016 and I’m pleased to say we did well in

achieving most of the goals set. Safety improved,

we widened margins and bolstered cash ﬂow,

reduced debt and enhanced the ﬂexibility of our

balance sheet. We progressed our brownﬁeld

project options to the point where we’re ready

to invest in them and our exploration teams

added 2.3Moz in Ore Reserve, substantially

offsetting depletion from last year’s production.

While we have ticked those items off the list, we

have more work still to do in safely improving the

operational performance of our South African

portfolio, ﬁnding a sustainable way forward for

our Obuasi mine and unlocking additional value –

at a reduced cost – from our Colombia portfolio.

We will be working hard on each of those areas

through 2017.

Our operations in Brazil, Argentina, Australia

and South Africa – accounting for about two-

thirds of our production – ensured we were

able to offer good leverage to the currency

weakness in those jurisdictions at the beginning

of 2016. Currencies can be a double-edged

sword, however, and the recovery in the South

African rand and Brazilian real in the latter half

of the year placed some pressure on US dollar-

denominated costs.

Our South African, Brazilian and Congolese

business units struggled operationally in

the ﬁrst half of the year, creating a drag on

the cost and production performance for

the year. All had shown some measure of

recovery by year-end, but each of those

areas will require ongoing, intensive

focus in the year ahead to consolidate

those improvements.

There is a wealth of data in this report detailing

every aspect of our operational and ﬁnancial

performance, but the highlights include

production of 3.628Moz, which came within

our guidance range, while the all-in sustaining

cost of $986/oz was slightly above our initial

forecast, given the strengthening of currencies

in the second half.

Capital expenditure of $811m was also within

guidance as we continued our disciplined

reinvestment into our portfolio. The sum total

of our efforts during the year, plus the strong

gold price performance in the ﬁrst half of 2016,

was the third year of improved free cash ﬂow

which came in at $278m (or $308m when

the cost of buying back our most expensive

debt is added back in). This helped us resume

dividend payments in early 2017, after a hiatus

of more than three years.

I N T E G R AT E D R E P O RT

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Performance review

Accountability

Shareholder information

C E O ’ S R E V I E W

( C O N T I N U E D )

A quick word on this dividend. We have

resolved to pay a dividend equal to 10%

of our free cash ﬂow, before project capital

expenditure, in any given year. This is, as

always, subject to the board’s discretion.

There has been some discussion – both

within the board and amongst shareholders

– about whether it would have been more

prudent to divert this dividend cash to further

debt reduction, particularly given the capital

programme that lies ahead of us. Our view,

as a management team, has been that it is

important to reinstate the dividend to signal

not only our conﬁdence in the ability of the

business to fund itself, but also to instil in the

operating management a sense of strict capital

discipline. It is this discipline that says our

shareholders must be provided for ﬁrst, before

we channel scarce capital to discretionary

growth projects.

S A F E T Y

Before reﬂecting further on our performance

last year and our outlook for the year ahead,

I’d like to ﬁrst discuss our safety performance.

Let me be clear, safety remains our highest

priority. It underpins everything we do and is an

area that we continue to work on improving.

We reported one fatality in Brazil and six in

South Africa, the last of which was on July

28, 2016. This remains, by a long way, the

most disappointing part of our performance

last year, despite a year-on-year reduction in

fatal accidents by a third, and one that we are

committed to improving upon.

Notwithstanding this disappointment, we

look for inspiration to some of the important

milestones of 2016, particularly in South Africa,

where Moab Khotsong reached a full year

without a fatality in September and extended

that record to the end of the year and beyond.

The Vaal River region achieved 2 million

fatality-free shifts and Mponeng and Kopanang

a million each. Continental Africa’s operating

mines had another year without a fatality. In all,

we recorded four fewer workplace fatalities than

in 2015, and none in the last quarter of the year.

Our marked safety improvements of the past

decade are a result of our continued focus

on – and investment in – enhanced operating

and safety systems and technologies. But

technology alone is not sufﬁcient. As in any

heavy industry, and especially in a company

like ours that employs more than 50,000

people globally, human error remains among

our greatest challenges. This is an aspect

of the business that we continue to work

hard to mitigate in cooperation with a broad

group of stakeholders.

We also work continually to ensure that every

person in AngloGold Ashanti places a greater

focus on identifying and avoiding risk. In an

environment where minor missteps can have

catastrophic consequences, it is critical that

we not only are relentless in identifying and

eliminating hazards, but that we instil a culture

that prizes safety above all else. We have

made encouraging strides in that regard and

will continue to look for ways to improve.

In South Africa, safety related stoppages

resulted in a loss of 104,000oz of production.

While we are strong supporters of robust and

constructive safety regulation, we elected

to challenge one such stoppage at our

Kopanang mine during 2016, as we believed

the sanction levied by the regulator was

disproportionate to the safety threat identiﬁed.

We received a verdict in our favour from the

Labour court, providing once again, a helpful

guideline for the industry with respect to the

fact that stoppages should be proportional to

the overall threat posed by an identiﬁed safety

infringement. This should obviate many mine-

wide stoppages in future, where a safety

infraction may be cured more effectively

through a more localised stoppage, rather

than shutting an entire mine. The beneﬁts of

this outcome for the industry at large should

be twofold, namely improving safety while

also helping preserve the viability of a high

ﬁxed-cost business that has suffered severe

damage related to signiﬁcant revenue losses

in recent years. As management, we shall not

hesitate to stop mining in any area ourselves

should we ﬁnd that they do not meet our

safety criteria.

S U C C E S S I O N

On behalf of the executive team, I’d like

to bid a fond farewell to Ron Largent, who

retires in early 2017 after more than 20 years

with us. It would not be an exaggeration

to say that Ron has effected one of the

gold industry’s most signiﬁcant operational

turnarounds over the past four years,

turning our international portfolio into a

globally competitive suite of assets with an

impressive list of growth and life extension

options. Our strong operating results over

the past four years are testament to Ron’s

status as one of the world’s best mining

operators. We bid him a fond farewell and a

restful retirement with his family.

Further testament to Ron’s leadership is

the strong succession pipeline he’s created

through his tenure here, so he passes the

baton on to a familiar face for many of you in

Ludwig Eybers. Ludwig and his team worked

hand in glove with Ron in effecting perhaps

the most noteworthy of these turnarounds,

which was improving the fortunes of our

Continental Africa unit. Ludwig has had

accountability for safety, production, costs

and planning in the international team since

his appointment last year as Deputy Chief

Operating Ofﬁcer: International. We welcome

him to the Executive Committee and are

conﬁdent he will continue to build on his

successes with us.

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

C E O ’ S R E V I E W

( C O N T I N U E D )

Srinivasan Venkatakrishnan

Chief Executive Ofﬁcer

22 March 2017

O U T L O O K

There is no doubt that we have our work

cut out for us in 2017 and beyond. We

have forecast somewhat higher cash costs

and all-in sustaining costs for 2017 (see

page 131 for production guidance), mainly

given the relative strength of currencies in

many of our key operating jurisdictions.

As discussed above, sustaining capital

expenditure will increase in line with our

internal reinvestment philosophy, before

moderating somewhat in 2018. This is

expected to contribute to an increase

in the all-in sustaining cost.

The investment is effectively a down

payment on better future margins and longer

mine lives, thus securing the long-term

future of our business.

To conclude, I’d like to reafﬁrm the fact

that we remain clear not only on the

strategic path we will follow, but also on

the operational imperatives that will deﬁne

our work in the year ahead. We must

again make a quantum improvement in

safety and environmental stewardship, be

ﬂawless in the execution of our projects,

redouble our focus on cost management

and operational excellence as we aim

to expand margins, and maintain the

hard-won ﬂexibility of our balance sheet.

Obuasi, South Africa and Colombia are

priority areas for us as we seek to unlock

unrealised value in the portfolio.

To our chairman, board, executive team and

every member of the AngloGold Ashanti

extended family, particularly those who

come into work each day to contribute

experience, initiative and effort to the

advancement of this company, I offer my

heartfelt and sincere thanks. Your efforts are

greatly valued and I look forward to another

year of mutual success as we tackle the

challenges and embrace the opportunities

that lie before us. I suspect that there will be

plenty of both in 2017.

Picture:

Gramalote, Colombia

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Shareholder information

S E C T I O N 2

B U S I N E S S C O N T E X T

Business model /

Material concerns and our

external environment /

Stakeholder engagement

and material issues /

People are our business/

We set out our business in context,

stating how we use our resources as

inputs to deliver desired outcomes,

while managing the impacts, related

material issues, risks and stakeholders

to achieve our intended outputs.

Picture: Kopanang, South Africa

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B U S I N E S S M O D E L

To produce gold, AngloGold Ashanti’s

operational activities encompass:

(1)

exploration

– ﬁnding, identifying and

evaluating prospective, economically

viable, gold deposits

(2)

mine development

– establishing the

necessary infrastructure both on surface

and underground to access the deposit

via vertical shafts and decline ramps (in

underground mining) or material stripping

(in open pit mining)

(3)

mining

– extracting the gold-bearing ore

and transporting it to the gold plants

(4)

processing

– the ore mined is processed

to extract the gold and smelted to

produce doré (unreﬁned gold bars), and

any by-products occurring

(5)

reﬁning

– the doré is reﬁned to a speciﬁed

level of at least 99.5% purity to produce

gold bullion that is sold to international

bullion banks

(6)

rehabilitation and closure

– once all the

gold-bearing ore in a deposit has been

mined (depleted) and the life-of-mine

ended, the process of closure begins

We incorporate closure planning, which takes

into account local community livelihoods

and land rehabilitation, at the start of our

exploration. Closure plans are revised

continually, until mining activity ceases, when

the ﬁnal plan is implemented. Rehabilitation

takes place throughout the life-of-mine.

In conducting our business, we:

•

require and make use of various

INPUTS

– the people who use technology

and machinery to discover and

evaluate the economic viability of gold-

bearing ore bodies and who, with

the necessary skills and equipment,

develop and operate the mines

•

produce

OUTPUTS

, gold and other by-

products (silver, uranium and sulphuric

acid) which we sell to generate income

•

manage the use of the

INPUTS

required

and use them as efﬁciently as possible

in order to reduce the

IMPACTS

may have on the environment and

communities within which we operate

or on the people with whom we work

•

achieve the desired

OUTCOMES

creating value for our stakeholders while

delivering on our strategy, generating

sustainable cash ﬂow and returns.

Natural

Financial

Manufactured

Human

Intellectual

Social

C A P I TA L

R E S O U R C E S

Picture:

Tropicana, Australia

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I N P U T S

O U T P U T S

O U T C O M E S

I M PA C T S

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

I n t h i s s e c t i o n , w e d i s c u s s

t h o s e m a t t e r s t h a t :

Impact or could impact our
ability to create value in the
short, medium or long-term

May prevent us from delivering
on our strategic objectives

Inﬂuence our economic
viability and the sustainability
of our business

T H E G O L D M A R K E T

In 2016, the gold market was a story of two

halves, where the price increased from late

2015 and continued to rally during the ﬁrst half

of 2016, peaking at $1,375.25/oz on 6 July

2016. The year was eventful worldwide – the

sharp sell-off in Chinese equities, heightened

friction between Saudi Arabia and Iran,

together with surprising Brexit referendum

result – helping to drive up the gold price. The

unexpected election of Donald Trump as US

president created additional volatility in the

gold price and ﬁnancial markets generally.

M A T E R I A L C O N C E R N S A N D
O U R E X T E R N A L E N V I R O N M E N T

Jan 2015

Dec 2016

AVERAGE MONTHLY GOLD PRICE

January 2015 to December 2016 ($/oz)

1,000

1,100

1,200

1,300

1,400

Source: Bloomberg

2016

Average gold price of

$1,248/oz

2015

Average gold price of

$1,160/oz

The most inﬂuential factors affecting the

gold price during 2016 were the dollar and

US monetary policy. The absence of any

increase in US interest rates during the ﬁrst

half of the year resulted in an increase in the

gold price. However, as the US economy

continued to improve towards the end of the

year, with a growing likelihood of an increase

in US interest rates, the gold price began to

wane. At its meeting on 14 December 2016,

the Federal Open Market Committee (FOMC)

increased US interest rates by 25 basis points

and ﬂagged a more hawkish stance ahead

on the US interest rate environment. This

signalled the potential for further rate hikes in

2017, supporting the US dollar and placing

gold under considerable pressure with the

price dropping to a low of $1,122.35/oz on

15 December, before recovering and closing

the year at $1,151.46/oz.

The rally in the gold price for the ﬁrst half of

the year was also helped by the revival of

exchange-traded fund (ETF) demand which

saw many investors returning to gold. In

addition to the events described above,

continued sluggish economic growth across

the globe, despite the attempts by central

banks to reﬂate economies, made gold

Picture:

Tropicana, Australia

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M A T E R I A L C O N C E R N S A N D
O U R E X T E R N A L E N V I R O N M E N T

( C O N T I N U E D )

a preferred safe-haven asset, increasing

demand. ETF holdings were up 45% at

their peak, to 72.8Mozs. However, as the

outlook for US economic growth improved

in the second half of the year, demand for

gold decreased. Following the outcome

of the US elections in November, demand

weakened further, diminished by the outlook

for higher interest rates and expectations

of a stronger US dollar. This was evident as

investment demand continued to decline with

gold ETF outﬂows remaining at a relatively high

level of 3.1Moz in December, albeit lower than

November outﬂows of 3.9Moz.

ETF holdings

closed the year at 65.02Moz, 30% higher

than the opening position of 50.2Mozs.

Since 2011, the central bank community

has established itself as an important

demand side factor, adding to existing gold

holdings in order to either diversify or bolster

reserves. Central banks continued to be net

buyers in 2016, although to a lesser extent

compared to previous years. In 2016, central

banks collectively purchased 383.6t of gold

compared to 566t in 2015, a reduction of

33%. Despite this, 2016 was the seventh

consecutive year of net purchases by central

banks. Central bank purchases in 2016

were led by Russia, China and Kazakhstan.

Together they accounted for around 80% of

purchases for the full year.

Sales from central banks were, once again,

negligible at 3.07t for the 2015-2016 period

(3.39t for 2014-2015). The bulk of these sales

were made by the German Bundesbank as

part of its gold coin programme.

JEWELLERY DEMAND

Demand from the gold jewellery market,

dominated by India and China, which together

account for almost 60% of jewellery demand,

was somewhat disappointing. In China,

households were spending more on luxury

items and investing in property rather than in

gold. India, on the other hand, was negatively

impacted by a six-week strike by jewellers,

increased government regulations (including

higher taxes and duties on gold imports), and

a poor harvest. The latter led to an increase

in the rural community selling gold in order to

make up for the loss of income from farming,

while the impact of demonetisation continued

to affect gold demand.

The higher gold prices during the year

encouraged an increase in scrap entering

the market while recycled gold increased

by 17% year-on-year to 42.07Moz in 2016.

Mine supply remained virtually unchanged

in 2016, from 2015 levels, with production

of 3,236t and 3,233t recorded for the two

periods respectively.

C A P I TA L M A R K E T S

The volatile gold price inevitably impacts

on valuations placed on gold-producing

companies. This was reﬂected in the sharp

contraction in the value of gold stocks

between mid-August and year-end. The fall

was again compounded by the drop in the

gold price below $1,200/oz during 2016,

though the gold price corrected somewhat in

the early part of 2017.

The AngloGold Ashanti share price rose 48%

in 2016, broadly in line with the benchmark

GDX Market Vectors Gold Index.

AngloGold Ashanti demonstrated value

creation and good delivery on the company’s

strategic objective to generate sustainable

free cash ﬂow improvements and returns.

This was achieved by self-help measures:

reducing debt and overall leverage through

cost reductions, strengthening the balance

sheet, while generating cash. At the end of

July 2016, AngloGold Ashanti eliminated the

company’s highest-cost debt, by redeeming

the outstanding portion of the 8.5% high-yield

bonds that were due in 2020. This resulted

in reduced interest payments while improving

free cash ﬂow and introducing additional

balance-sheet ﬂexibility. Sustainable free

cash ﬂow generation greatly reduces any

need to raise capital in the current volatile

market conditions.

R E G U L AT O RY C H A N G E S
A N D U N C E RTA I N T Y

In South Africa, a revised Mining Charter, was

initially issued on 15 April 2016 for public

comment. Industry has expressed reservations

on key aspects of the revised Mining Charter,

including the clause on a perpetual 26%

black ownership requirement. There is still no

certainty on the ﬁner details of black economic

empowerment (BEE), particularly whether

the principle of “once empowered, always

empowered” will be observed. This uncertainty

arose in 2015, when the Minister of Mineral

Resources announced that mining companies

had not achieved the 26% black ownership

level mandated by the 2010-2014 Mining

Charter. See more on page 70 in the South

Africa regional review.

On the basis that all key targets were met

by Chamber of Mines members (including

AngloGold Ashanti) in March 2015, the

Chamber of Mines, on behalf of the mining

industry, sought a declaratory order from the

High Court to obtain clarity on this issue.

Judgement on this matter is still pending.

Uncertainty in the South African mining

industry regarding ownership requirements

in the Mining Charter could reduce the

attractiveness of the country as an investment

destination for scarce capital.

The overarching legislation governing the

mining industry in South Africa, the Minerals

Petroleum and Resources Development

Amendment (MPRDA) Bill, is currently being

reviewed by the lower house of Parliament,

the National Council of Provinces. There

are continuing differences of opinion on the

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O U R E X T E R N A L E N V I R O N M E N T

( C O N T I N U E D )

constitutionality of some of the Bill’s provisions,

a matter that the Chamber of Mines raised

during the consultation process.

On the overall content of the Bill, we had

engagements with the DMR focused on

crafting legislation that would promote all

aspects of the mining industry, bring as much

certainty as is practicable and ultimately

bolster investor conﬁdence. It is anticipated

that ﬁnalisation and clarity on these matters will

be provided in June 2017.

The South African mining industry remains

fully committed to transformation undertaken

in a manner that sustains and supports

the industry, and does not undermine the

laudable goals of the MPRDA, and in order to

meet the vision of the government’s National

Development Plan. AngloGold Ashanti

complies with the requirements of MPRDA as

well as the Mining Charter.

AngloGold Ashanti’s performance
on Mining Charter requirements.

BACKGROUND ON THIS REVIEWED LEGISLATION

On 27 December 2012, the Minister

published the Draft Mineral and Petroleum

Resources Development Amendment Bill,

2012 (2012 Bill) which sought to amend the

MPRDA and invited the mining industry and

interested and affected parties to comment

on it by 8 February 2013. On 21 June 2013,

a revised version of the Bill (2013 Bill) was

introduced to the National Assembly. The

2013 Bill underwent a public participation

process and extensive comments were

received from the general public. Following

a consultative process with the Department

of Mineral Resources (DMR), the State

Law Advisors and the general public, the

Portfolio Committee on Mineral Resources

(Portfolio Committee) introduced an amended

version of the 2013 Bill to the South African

Parliament. The 2013 Bill was passed by the

National Assembly on 12 March 2014 and

passed by the National Council of Provinces

(NCOP) on 27 March 2014.

On 16 January 2015, the President referred

the 2013 Bill back to the National Assembly

to accommodate his reservations around the

constitutionality of the 2013 Bill. In October

2016, the Bill was passed in Parliament

(National Assembly) and has now been

referred to the NCOP. In January 2017,

the DMR without properly consulting, then

proposed an additional 54 amendments to

the Bill. Provincial legislatures are now tasked

with holding public hearings during March

2017 on these new amendments to facilitate

public involvement.

On 15 April 2016, the Minister of Mineral

Resources published a draft mining charter

(the “Draft 2016 Mining Charter”). The Draft

2016 Mining Charter seeks to align the Revised

Mining Charter with the Broad-Based Black

Economic Empowerment Act, 53 of 2003,

in order to ensure meaningful participation

of black people and provide for policy and

regulatory certainty to ease the investment in

and the development of the mining industry.

Interested and affected parties were invited

by the DMR to submit written representations

on the Draft 2016 Mining Charter until 31 May

2016. AngloGold Ashanti made its comments

on the reviewed Mining Charter directly to the

Department of Mineral Resources (DMR) on 30

May 2016, and was also part of the Chamber

of Mines’ reference group that prepared the

industry’s submissions through the Chamber

of Mines Council. The Minister of Mineral

Resources indicated that the reviewed

Mining Charter is expected to be published

in March 2017. This had not been published

by the DMR as at 22 March 2017, the date of

approval of this report by the board.

In terms of the Mining Charter, in South

Africa we are required to deliver on

community projects in line with our social

development plans, available on our website:

www.anglogoldashanti.com. Details of

these projects are set out in the

<SDR>

On 20 January 2014, AMCU served strike

notices to three gold companies challenging

the extension of the 2013 wage agreement to

its members. An interim interdict was granted

to the Chamber of Mines by the Labour

Court in Johannesburg on 30 January 2014,

declaring the intended strike unprotected and

prohibiting unprotected strike action as well as

any conduct that might encourage workers to

embark on strike action. Following two labour

court interdicts against its strike actions,

AMCU appealed the ruling through the Labour

Appeal Court. After the Appeal Court also

upheld the interdict, AMCU appealed to the

Constitutional Court. On 21 February 2017,

the Constitutional Court dismissed the appeal

by AMCU and held that the 2013 wage

agreement was validly extended to AMCU

members and the relevant statutory provisions

were constitutionally compliant.

C A R B O N TA X

A ﬁnal decision on the implementation of the

proposed Carbon Tax Bill in South Africa is still

pending, after the initial Bill was released in the

second half of 2015. During 2016, following

public comments received on the draft Bill,

the South African government held additional

public consultations. A revised Bill is expected

to be published and to be tabled in Parliament

mid-2017.

The latest developments on this Bill include

that, ﬁrstly, during the initial phase (estimated

to be until 2020), there will be no impact

on the price of electricity and, secondly, a

revised regulation will be published by mid-

2017 for the carbon offset allowance, giving

corporations a mechanism to reduce their

carbon tax liability. Following the publication of

the regulation, it is anticipated that government

will provide clarity on the alignment of the

carbon tax and carbon budget, which is

expected to be after 2020.

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O U R E X T E R N A L E N V I R O N M E N T

( C O N T I N U E D )

AngloGold Ashanti’s direct, Scope 1 emissions

in South Africa are dwarfed by the indirect

Scope 2 emissions. This is a 101,000t CO₂-e

of direct emissions compared to 2,626,000t of

-e of indirect emissions in 2016. Our main

environmental exposure in South Africa stems

from the fact that we purchase electricity from

the national utility provider, Eskom, which is

generated from coal. In turn, this may cause

exposure to the proposed Carbon Tax, which

is expected to have an impact on the cost

of electricity and on the carbon tax. The

carbon tax is expected to escalate after 2020

when rebates, implemented as a means of

ameliorating the impact of the carbon tax on

the economy, are expected to be phased out.

In Australia, the government introduced the

carbon emissions safeguard mechanism,

aimed at limiting future growth in greenhouse

gas (GHG) emissions after setting baseline

emission thresholds, the safeguard

mechanism requires that companies submit

carbon credits or pay penalties for excess

emissions. Sunrise Dam applied for a

baseline emissions in accordance with the

regulatory scheme’s default mechanism.

Tropicana will apply for a baseline emission

level using the alternative calculated baseline

method during 2017.

M I N E C L O S U R E

In South Africa, new regulations have

been proposed which will form part of the

National Environmental and Management

Act (NEMA). On 20 November 2015, the

Minister of Environmental Affairs published

the Regulations Pertaining to the Financial

Provision for Prospecting, Exploration,

Mining or Production Operations – through

Government Notice R. 1147 (the “2015

Financial Provision Regulations”).

On 26 October 2016, the Minister published the

proposed amendments to the 2015 Financial

Provision regulations, which extended the

transitional period for compliance to February

2019. In this regard, AngloGold Ashanti only

has to comply with the 2015 Financial Provision

Regulations in February 2019.

The Department of Environmental Affairs has

acknowledged the many challenges raised by

the industry, in collaboration with the Chamber

of Mines, with the proposed regulations. In the

latest draft revisions, some of the main issues,

such as the future of existing rehabilitation trust

funds have already been favourably amended.

AngloGold Ashanti is continuing to engage with

the relevant departments through the Chamber

of Mines and hopes that these will lead to the

company being able to comply with the new

regulations once they become effective. In

addition, the South Africa region has initiated

an internal project in collaboration with an

independent consultant, to assess and amend

our current closure liability assessments in line

with the new requirements.

S O C I A L L I C E N C E T O O P E R AT E :
S H A R I N G R E S O U R C E S

Mining can create additional competition for

resources, such as land, water and electricity.

The challenge is for companies to attain

the correct balance between successfully

conducting their mining operations and limiting

and mitigating any negative impact on the

communities and societies in which they

operate. Our initiatives and work done on the

various elements in our quest for sustainable

mining, including environmental stewardship,

are covered in the stakeholder engagement

section, under communities, and are detailed

in the

<SDR>

which is available online at

www.aga-reports.com.

ELECTRICITY

Since 2013, AngloGold Ashanti’s energy

consumption has edged downwards 2% as

a result of cost savings, energy efﬁciency

initiatives, divestments as well as the scaling

down of operations. Furthermore, the recent

implementation of Operational Excellence

principles for energy management at our

international operations has resulted in

identifying additional opportunities for savings.

In 2016, energy security in South Africa

improved, largely as a result of lower national

energy demand. The region reduced its overall

energy consumption by 1.06% year-on-

year, driven by a disciplined approach which

included meticulous energy management and

reporting processes, together with various

efﬁciency projects across all the operations.

In recognition of the work done, our project,

the Vaal River Compressor Real-time Dynamic

Control System (REMSDCS) was nominated

and won an award for the 2016 South African

Association for Energy Efﬁciency project of

the year. This project was initiated as part of

the national utility’s demand side management

initiative and executed at our Vaal River

operations. The project not only achieved a

reduction of 1.65MW in volumes used during

the peak period but it also realised ﬁnancial

savings (approximately $140,000), with further

savings derived from multiple parallel projects

on compressed air efﬁciency, yielding almost

double the initial savings.

We continue to enforce energy saving

measures at all our operations – underground,

on surface and in employee residences.

Additionally, in South Africa, our mines have

back-up generators that ensure employee

safety in case of an emergency and prevent

infrastructural damage during outages.

Power supply availability and reliability remain a

challenge in Ghana, with demand far outstripping

supply. This is as a result of the low water

levels in the country’s three main hydropower

dams and uncertainties surrounding the fault

in the oil production rig which supplies gas to

some of the thermal plants in the country. To

mitigate this, at Iduapriem, we are working with

our utility supplier, the Electricity Company of

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( C O N T I N U E D )

Ghana, to secure a premium service agreement.

In Tanzania at Geita, we initiated a large-scale

project to replace an existing generator power

station, whose units are now at the end of their

economic life, with a new power station utilising

fuel-efﬁcient generators and a modern power

station design.

As part of a proposed expansion project at our

Siguiri mine, we will add a new power plant to

our current electricity generation facilities, to

replace the mine’s current 20-year old power

plant and to meet the requirement for the

expansion of the mining activities. In Guinea

we invested in infrastructure that enables the

supply of electricity in the Bouré area, close to

our Siguiri operation. Construction of a low-

voltage electrical network in nine villages of

Bouré including the Area 1 resettlement area

brought electrical power to homes.

Electrical power at the Australian operations

is generated by onsite power stations

predominantly using natural gas delivered

by the Eastern Goldﬁelds Pipeline, which

was completed in December 2015. Gas

delivery during 2016 was uninterrupted and all

performance expectations were met. A small

number of diesel units remain at each site to

provide peak load capability and emergency

back-up power for critical systems should gas

supply be interrupted.

Hydropower capacity in Brazil recovered from

drought conditions in prior years, providing

improved reliability in electrical power supply.

WATER

South Africa is a water-stressed country.

Our mines have, for many years, been

using this scarce resource responsibly

and proactively lessening consumption by

recycling water and using groundwater

draining into underground operations that

would otherwise have been discharged.

“Clean-dirty” water separation principles

are applied and rainwater is kept away from

operations as much as possible. During

2016, South Africa experienced one of its

most severe droughts in history – water

levels in rivers and dams were critically low.

The Department of Water and Sanitation

introduced strict water restrictions across

business sectors as well as households.

The South Africa operations managed to

maintain production without disruption due

to the careful water management processes

that are in place.

Additionally in our mines in the South

Africa region, we face possible risks from

extraneous water and, as a result, we

have a number of proactive measures in

place to ensure the effective management

of this potential risk. For instance, at the

Vaal River operations, the neighbouring

Buffelsfontein Gold Mine began decanting

approximately 6ML of water per day into

the Great Noligwa mine. This water was

evacuated from the underground mine and

utilised in the metallurgical operations. At

the West Wits operations, additional water

from the neighbouring Blyvooruitzicht Mine

Shaft 5 began ﬂowing into to the Savuka

underground workings and is currently

being evacuated through the TauTona shaft

and utilised in the West Wits process water

system. These strategic interventions have

safely reduced the risk of ﬂooding at our

operations, and enabled the reduction of raw

water intake.

In Brazil, some mines have had water shortages

in the past. We continue with our concerted

water recycling efforts, which have enabled the

mines to avoid production slowdowns.

In Guinea, the growth of the tailings storage

facility at Siguiri necessitated the expansion

of its return water facility. This imperviously-

lined dam was successfully expanded during

2016. The increased storm water storage

capacity off the tailings facility has resulted

in a reduction of about 34% in raw water

abstraction from the Tinkisso River, with a

corresponding increase in the use of recycled

water in the metallurgical operations.

At Obuasi, the pumping of water from the

underground workings continued during the

year, despite the invasion of the mine by illegal

miners. This has been carried out to prevent

the underground mines ﬂooding. In addition,

water was treated to efﬂuent discharge

standards and released to the environment,

this being both the underground mine water

as well as the rainwater that collected on the

inactive tailings storage facilities.

Picture:

Mponeng, South Africa

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O U R E X T E R N A L E N V I R O N M E N T

( C O N T I N U E D )

L E G A C Y I S S U E S

The company’s legacy issues include social

and environmental challenges at Obuasi,

Ghana; deep-level groundwater and water

pumping obligations in South Africa; migrant

labour and housing and accommodation

challenges in South Africa; resettlement

issues at certain Continental Africa

operations; and the incidence of occupational

lung disease (OLD).

AngloGold Ashanti has done much work

to address the legacy issues it has faced

at some of its operations, as explained in

various sections in this report. In March

2016, AngloGold Ashanti and Anglo

American South Africa entered into a

settlement agreement with claimants’

counsel on 4 March 2016, for a full and

final settlement with no admission of

liability of individual claims brought against

the companies in respect of OLD allegedly

contracted by the claimants. The work of

the Q(h)ubeka Trust set up to administer

the claim settlement is progressing well.

AngloGold Ashanti, together with Anglo

American, African Rainbow Minerals, Gold

Fields, Sibanye and Harmony, formed an

industry working group in November 2014

– the Mining Industry Working Group on

Occupational Lung Disease. The aim of

the group is to address issues relating to

compensation and medical care for OLD

in the gold mining industry. The objective

of the working group is to achieve a

comprehensive settlement of OLD claims

which is both fair to past, present and future

employees and sustainable for the sector.

The companies in the working group are

among respondent companies in a number

of lawsuits related to OLD, including a class

action application. The group allows for

good collaboration among stakeholders in

the industry, labour and government with the

aim of ﬁnding a timely solution to the legacy

of the compensation process.

Despite the unfolding legal process, the

working group believes in working together to

seek a solution to this South African mining

industry legacy issue. The group is committed

to continuing with its efforts to ﬁnd common

ground with all stakeholders, including

government, labour and the claimants’

legal representatives. The companies in the

working group do not believe that they are

liable for the claims brought against them and

are defending these.

On 13 May 2016, the High Court of South

Africa, Gauteng Local Division ordered, inter

alia, that current and former underground

mineworkers who have contracted silicosis,

and the dependants of underground

mineworkers who died of silicosis (whether or

not accompanied any other disease), where

such mineworkers work or have worked on

one or more gold mines listed as part of the

judgement, after 12 March 1965 (the “silicosis

class”) constitute a class. The class also

includes current and former underground

mineworkers who have contracted pulmonary

tuberculosis, and the dependants of

deceased underground mineworkers who

died of pulmonary tuberculosis (but excluding

silico-tuberculosis), where such mineworkers

work or have worked for at least two years in

one or more of the gold mines listed as part

of the judgement after 12 March 1965 (the

“pulmonary tuberculosis class”).

AngloGold Ashanti, together with the other

respondent companies, has been granted

leave to appeal the order in the Supreme

Court of Appeal.

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We i d e n t i f y, p r i o r i t i s e a n d

r e s p o n d t o s t a k e h o l d e r i s s u e s b y

r e v i e w i n g t h e s e a n d t a k i n g i n t o

a c c o u n t : E x e c u t i v e C o m m i t t e e a n d

b o a r d c o m m e n t s , o u r o p e r a t i n g

e n v i r o n m e n t , a n d o u r b u s i n e s s

r i s k s a n d o p p o r t u n i t i e s . We

b u i l d r e l a t i o n s h i p s w i t h a l l o u r

s t a k e h o l d e r s – a n i n t e g r a l p a r t o f

o u r a b i l i t y t o s e c u r e a n d p r o t e c t

o u r l i c e n c e t o o p e r a t e , p r o t e c t

a n d g r o w v a l u e .

Our stakeholder engagement process involves:

•

direct and indirect interaction

•

understanding and managing expectations

•

sharing our objectives, policies and

standard; and our performances that impact

stakeholders.

Engagement that is dynamic, honest,

transparent and meaningful is a prerequisite to

establishing mutually-beneﬁcial relationships

with stakeholders. AngloGold Ashanti’s

stakeholder engagement programme is

an inclusive, continuous two-way process

between our company and the people or

organisations impacted by our business.

Establishing and sustaining mutually-beneﬁcial

stakeholder relationships are essential to

maintaining our social licence to operate.

S T A K E H O L D E R E N G A G E M E N T
A N D M A T E R I A L I S S U E S

Our stakeholder engagement process continues

throughout the life cycle of an operation, from

exploration through to closure and encompasses

a range of activities and approaches.

AngloGold Ashanti has a wide range of

stakeholders. Among the most critical to our

business are governments and regulators,

employees and communities, both individually

and through afﬁliations such as organised

labour, communities within which we operate,

community-based organisations (CBOs) and

non-governmental organisations (NGOs). We

view our stakeholders as important partners

and we strive to interact with them directly.

At AngloGold Ashanti, we value close

co-operation and engagement with

all stakeholders in the mining industry.

Engagement takes place either at corporate

level, for the entire AngloGold Ashanti group,

with stakeholders whose interests require

them to have an overview of the business as

a whole, or at an operating level, where each

site is responsible for its stakeholders and for

understanding the impact the operation has

on these stakeholders, and of their potential to

inﬂuence the business.

In identifying issues of material concern

that affected the company during the 2016

reporting year, we were guided by the

International Integrated Reporting Council and

its related framework, the GRI’s G4 guidelines

and the Accountability AA1000 Stakeholder

Engagement Standard. Our internal review

process involved:

•

A review of the previous year’s material issues

•

Identiﬁcation of emerging issues

•

Prioritisation of issues based on, among

others, their relevance to the company and

their potential impact on our social licence

to operate

Our stakeholders are those who are affected, either directly or indirectly, by our business
activities and also those who can affect the outcomes of our operations and projects. Our
stakeholders include, among others:

Employees, their families
and unions

Communities, their
representatives, NGOs and other
civic and religious organisations

Governments and
regulators

Shareholders, investors
and ﬁnanciers

Suppliers, industry peers
and joint venture partners

The media

Picture:

Kopanang, South Africa

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A N D M A T E R I A L I S S U E S

( C O N T I N U E D )

E N G A G I N G W I T H
G O V E R N M E N T S
A N D R E G U L AT O R S

Mitigating regulatory and political risk

In engaging with governments and regulators,

we aim to establish regulatory certainty and

create an environment conducive to mining

sector investment and development as law-

abiding citizens. Our responses in navigating

political and regulatory uncertainty are framed

by an ethical approach, and applied within

accepted regulatory frameworks. Our actions

generally fall into one of three types:

•

Engaging proactively in policy development,

regulatory proposals and conﬂict resolution,

seeking mutually beneﬁcial and sustainable

outcomes

•

Enhancing our internal systems and

activities to meet the requirements of any

regulatory obligations or changes

•

Disputing and seeking recourse where we

believe that we have been treated unfairly

and/or outside of accepted regulatory

prescripts

Governments also seek to engage with

us to ensure compliance with all laws and

regulations and to ensure that the beneﬁts of

mining ﬂow through to the state at national,

local and community levels. In addition to job

creation, taxes, royalties, and investment,

the beneﬁts of mining at a local level include

employment, skills development, local

procurement, enterprise development and

service and infrastructure development.

During 2016, we engaged with government

and regulators in:

•

South Africa, regarding: amendments

to the MPRDA; the Mining Charter; the

proposed carbon tax; the proposed mine

closure-related regulations; National

Health Insurance; and the Gold Working

Group on OLD to develop, in conjunction

with key stakeholders, a comprehensive

solution to silicosis litigation and related

statutory compensation. We also engaged

on the implementation of occupational

exposure levels for diesel particulate

matter in a mining environment. Extensive

engagement also took place concerning

the company’s safety performance and

safety-related stoppages.

•

Colombia, relating to various innovative

projects which are likely to shape policy

development such as the artisanal and small-

scale mining (ASM) co-existence project.

•

Ghana, despite the declaration of force

majeure when Obuasi was overrun by

illegal miners and a request for arbitration,

the company continued to engage

proactively with stakeholders, including the

relevant government authorities at all levels,

regional and municipal authorities, with the

aim of peacefully bringing an end to the

occupation of the site. We also engaged

with industry bodies, the traditional

authorities and local communities.

•

Tanzania, where we continue to engage

proactively and constructively with authorities

and ASMs for a co-existence plan while

empowering the communities. See the

Continental Africa regional review.

•

Various countries in the Continental Africa

region and in the Americas on facilitating

training and capability building outside the

business in areas such as human rights, and

anti-bribery and anti-corruption measures.

E N G A G I N G W I T H
C O M M U N I T I E S

Managing community expectations, upholding

human rights and ensuring security (of assets and

the community)

Our community engagement aims to establish

partnerships for shared value creation, to

enable communities to participate in the

development process and to eventually claim

ownership of initiatives begun by the company.

In engaging with communities we are guided

by our global Engagement Management

Standard that requires each operation to

prepare and implement an engagement

strategy that is, among others, forward-looking

and that identiﬁes potential areas of concern

to stakeholders.

Engagement covers a wide range of

issues, often speciﬁc to the local context.

Community dynamics vary in each of our

operating jurisdictions, but common features

involve increasing levels of socio-economic

inequality, social fragmentation, youth

unemployment, the availability of small arms

and the rise of petty and organised crime. As

a resident in host communities, AngloGold

Ashanti is not only exposed to conﬂict and

socio-economic dissatisfaction but often faces

challenges in securing our tenements amidst

community conﬂicts.

We have also observed a link between public

sector weakness and the marginalisation

of communities. Our focus is aimed at

circumventing any uncertainty in the

relationship between business, government

and communities, as well as public sector

service delivery failures which may create

conﬂict or a breakdown in trust between the

three groups. Increasingly, pressure is placed

on mining companies to address the service

delivery shortfalls and to contribute more

to local development. While the company

acknowledges its responsibility to contribute

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A N D M A T E R I A L I S S U E S

( C O N T I N U E D )

meaningfully to local development, our

proactive engagements strive to ensure that

we work with governments as they deliver on

their legitimate accountability for key services

to communities and society at large. Conﬂict

may arise through the government’s slow pace

of implementing policy. Such delays often

create misalignment between community

expectations and service delivery.

In South Africa, community engagement

included ad hoc meetings with youth

groups. The main areas of concern were

unemployment levels and employment

opportunities. The youth groups were made

aware of the portable skills training and

development available for young people

in our communities through the enterprise

development centres being established by

AngloGold Ashanti, in addition to our annual

bursaries and internship programmes.

Quarterly brieﬁng sessions were held with

small enterprises, communities and non-

governmental organisations involved in

projects run by AngloGold Ashanti within

their communities.

Engagements with local municipalities took

place at quarterly committee meetings which

addressed rates and water surcharges and

included discussion about the company’s

home ownership scheme. With regard to the

surcharges, to avoid further disputes with the

municipality, we are now planning to install

prepaid meters in company-owned houses.

The home ownership scheme that we are

currently working on aims to give employees

a chance to own the houses they live in and

is expected to be structured in an affordable

way as most employees do not qualify for

mortgages from the banks. Interactions are

underway with municipalities to expand this

project by donating underutilised mine property

to communities.

In addition, we engaged with communities in:

•

Colombia, where growing anti-mining

sentiment in Ibague, near our La Colosa

project, resulted in a referendum being

called for the local population to vote on

whether or not mining projects should

continue in the region. The referendum has

since been postponed.

•

Brazil, where our Good Neighbourhood

programme aims to strengthen the

company’s relationship with communities

by nurturing open and transparent dialogue

through regular meetings.

•

Guinea, there were disputes over the

resettlement of the Kintinian village located

within the Siguiri mine concession. With the

aim of settling these disputes, AngloGold

Ashanti has engaged over a number of

months with two Guinean non-governmental

organisations (NGOs): MDT and CECIDE,

and the Project Affected Persons on the

resettlement process. AngloGold Ashanti

has provided comprehensive input on each

of the NGO’s ﬁndings.

AngloGold Ashanti’s responses to the
enquiries from the two NGOs are available
here: www.anglogoldashanti.com/en/
sustainability/Pages/Other-Reports.aspx.

The company is satisﬁed that adequate

and fair compensation was paid, in line

with our policies and standards. All the

necessary infrastructure has been put in

place in the new resettlement site for use

by the community. The resettlement site

includes replacement houses, the design of

which was agreed with the community and

approved by the Director of Town Planning.

Refer to page 73 in the Continental Africa
regional review for more details.

E N G A G I N G W I T H
E M P L O Y E E S A N D
T H E I R U N I O N S

Mitigating safety risk by stressing the importance

of safety and health to employees, ensuring stable

labour relations and security (of people and assets)

Regular employee engagement is aimed at

ensuring a work environment in which people

are valued and supported and able to give of

their best. Employee engagement, which is

a two-way interaction, is aimed at promoting

Picture:

AGA Mineração, Brazil

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

S T A K E H O L D E R E N G A G E M E N T
A N D M A T E R I A L I S S U E S

( C O N T I N U E D )

good labour relations, increasing productivity

and maintaining a focus on our strategic

objectives. We believe it is crucial to the

well-being of all employees that engagement

is not only professional and respectful, but

also in line with the laws and regulations that

govern the sector in our various operational

jurisdictions. Furthermore, good labour

relations encourages a collaborative approach

to problem-solving in the workplace.

In line with our values and strategic

objectives, a critical focus of employee

engagement is safety. Regular, continuous

engagement, using a variety of media and

forms, emphasises and reinforces the

importance of safety in the workplace, and

compliance with safety procedures and

standards. Employee engagement also

covers health and wellness, indebtedness

and employee security, and our performance

in terms of our strategic objectives, as well as

topics speciﬁc to each operation.

During 2016, a new subject of employee

engagement was employee security. Our Duty

of Care programme is intended to preserve life

and ensure the safety of employees. During

2016, we designed and implemented an

online training programme aimed at raising

awareness and equipping individuals to

recognise and avoid potential threats to their

safety. The training also forms part of pre-travel

communication to ensure employees are aware

of risks before leaving their home country.

The South Africa region is facing some

tough realities, including a volatile operating

environment, margins under pressure, reduced

production, high unit costs and our vast

operational and infrastructural footprint.

In a move to ensure that our cost base is

tailored to suit our lower production levels, we

are revising our operating model. This revised

model has the ultimate aim of creating a more

sustainable and cost-effective business that

will preserve jobs in the long term. This is

an important objective for all stakeholders in

terms of employment, taxes, foreign exchange

revenue and returns on investment. Job cuts

are always a last resort and we will effect any

employee reductions in close consultation with

staff and their organised labour representatives,

in line with all relevant regulations.

As part of our ongoing engagement efforts,

we initiated dialogue with all South African

employees on the constraints facing our

business. Engagements are being managed

in a dedicated forum involving representatives

from human resources and organised labour.

This forum, which met several times during

the year, will oversee development of the

proposed transition framework that will guide

management on the revised operating model’s

impact on employees. In addition, the Chief

Operating Ofﬁcer: South Africa briefed all

management employees and engaged with

the leadership of organised labour.

At Geita in Tanzania, negotiations for a

one-year wage agreement for 2016 were

successfully concluded (reported in 2015

report), largely due to the collaborative working

relationship between management and

the majority union, as well as the capacity-

building training workshops attended by both

management and union representatives prior

to the start of negotiations. Management and

the union further renewed their commitment to

continue to co-operate through existing forums

in resolving and concluding any outstanding

collective bargaining items.

At Iduapriem in Ghana, the 2016/2017 wage

negotiations were conducted bilaterally

between AngloGold Ashanti and the Ghana

Mineworkers Union (GMWU) at company

level. Iduapriem and the GMWU successfully

ﬁnalised a review of selected existing collective

bargaining items and agreed a two-year

collective agreement for 2016 and 2017.

The Chamber of Mines in Ghana has shown

a strong desire to pursue a proposed unitary

negotiation concept (negotiating wage

increases and other collective bargaining items

at an industry level) and will continue working

with the GMWU and other relevant stakeholders

in Ghana for successful implementation.

At Obuasi, in terms of the standing agreement

negotiated between the company and the

GMWU, there were no wage negotiations

with organised labour for 2016 as the mine is

on care and maintenance. With the support

of the GMWU, the Anyinam Lodge (Obuasi)

redundancy and retrenchment exercise was

successfully completed in 2016.

At Siguiri in Guinea, despite a confrontational

union relations climate and sporadic protest

action sanctioned by the union delegation,

management invested considerable time and

effort in promoting and strengthening relations

with organised labour. The 2016 annual wage

negotiations were successfully concluded and

disputes were resolved amicably.

At Sadiola in Mali, the 2016 annual wage

negotiations between management and

the union committees for a one-year wage

agreement were successfully concluded. A

stable and peaceful labour relations climate

was maintained during the year.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

E N G A G I N G W I T H
T H E I N V E S T M E N T
C O M M U N I T Y

Reporting on progress made in meeting strategic

objectives and targets

Regular engagement with the investment

community, which includes ﬁnanciers,

shareholders and prospective investors,

the providers of capital, is conducted in

compliance with legislation in South Africa,

the country in which we have our primary

listing and where we are registered as

an entity, and with the regulations of the

various exchanges on which we are listed.

This stakeholder grouping is geographically

diverse, ever-changing, with varying

investment strategies. Regular, reliable,

transparent engagement takes place in

person and by email, at our interim and

annual results presentations, via conference

calls, site visits, investor conferences and at

one-on-one meetings.

The aim of engagement with the investment

community is principally to report on our

operational and ﬁnancial performance; on

progress made in delivering on our strategic

objectives; on material matters that may

impact our performance, such as regulatory

and political risk; corporate activity by way of

acquisitions or sales; and labour relations, to

name a few.

Such engagement can enhance the valuation

and credit rating of our company and our

access to cost-efﬁcient capital, and is

particularly important during periods when

commodity prices are low and investment

sentiment is negative towards resources

stocks. AngloGold Ashanti has credit ratings

from Moody’s and S&P, and strives to maintain

and improve its credit ratings in order to

provide further comfort to credit investors. It

is important that the investment community

understands what is being done to manage

the company in such circumstances. In

these engagements, it is also critical for the

investment community to get a reinforcement

of the company’s strategy and how

management delivers on it.

E N G A G I N G W I T H
S U P P L I E R S , I N D U S T RY
PA RT N E R S A N D J O I N T
V E N T U R E PA RT N E R S

To promote the long-term sustainability

of the company and industry

Such engagement is aimed at building

mutually beneﬁcial relationships with those

entities with whom we collaborate and interact

in the course of conducting our business.

Suppliers – important to our economic

viability. Engagement with suppliers is vital

as we ensure their alignment with our values

and in our endeavour to and in support of

delivery on our strategy. Our supplier code

of conduct encourages suppliers, including

contractors, to align their businesses with

our internal policies and codes of ethical

behaviour, particularly in terms of human

rights, labour, the environment, our anti-

corruption policies and safety procedures,

policies and standards. Our supply chain

strategy incorporates the environmental,

social and governance (ESG) factors, in

terms of which suppliers are assessed on

their governance conduct in addition to their

socio-economic objectives. In addition, we

work closely with suppliers regarding capacity

building, promoting local procurement and

transformation, especially in South Africa, in

support of the national development goals.

Industry partners – we collaborate with

our peers in the sector and industry

bodies, such as the Chamber of Mines,

to engage governments, labour and other

key stakeholders on new developments to

promote the future of the industry. These

industry partners also include the World Gold

Council, and the International Council on

Mining and Metals (ICMM).

Joint venture partners – we work together

to optimise performance and the mine life of

those operations on which we have partners.

We also investigate potential partnership

opportunities for exploration projects or

existing operations to spread the country

and ﬁnancial risks, while sharing opportunities

and beneﬁts.

E N G A G I N G W I T H
T H E M E D I A

Complements engagement with many

other stakeholders

Transparent media engagement on a range of

matters facilitates understanding of AngloGold

Ashanti and of our activities and achievements,

and promotes accurate reporting and

constructive relationships with other

stakeholders. Engagement with the media

augments and underpins communication, in

certain instances, with other stakeholders such

as communities, investors and government,

and other interested entities.

Constructive media engagement is fundamental

to the management of our reputation and thus

our social licence to operate as well as our

credibility. It can be used to address speculation

and misinformation in the public domain.

S T A K E H O L D E R E N G A G E M E N T
A N D M A T E R I A L I S S U E S

( C O N T I N U E D )

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

P e o p l e a r e t h e f o u n d a t i o n o f

o u r b u s i n e s s , a s a c o m p a n y, w e

e n d e a v o u r t o h a v e o u r e m p l o y e e s

u n d e r s t a n d t h e c o m p a n y s t r a t e g y

a n d l i v e t h e c o m p a n y v a l u e s .

A s w e s t r i v e f o r o p e r a t i o n a l

e x c e l l e n c e , h i g h e r p r o d u c t i v i t y

a n d s a f e w o r k e n v i r o n m e n t s ,

w e c o n t i n u o u s l y e n g a g e o u r

e m p l o y e e s o n b u i l d i n g a h i g h

p e r f o r m a n c e c u l t u r e w h i l e

p e r f o r m i n g a t t h e i r b e s t t o w a r d s

t h e d e l i v e r i n g o n t h e b u s i n e s s

s t r a t e g i c o b j e c t i v e s .

Having the right people doing the right work

well and creating the conditions for them to

thrive remains the foundation of our human

resources strategy. However, in our employee

focus, we remain cognisant of the challenges

in our operating environment which include:

•

Evolving regulatory and related frameworks

in various jurisdictions (such as the Mining

Charter in South Africa), and the need

for progress in skills localisation at our

Continental Africa operations

•

Managing the risk of critical talent retention

across the business

•

Improving gender diversity

•

Continuing to strengthen harmonious

employee relations, including with organised

labour representatives

In responding to these challenges, the

company’s human resources discipline has

focused on building the capacity and capability

of the global human resources team in the areas

of organisational design, talent management and

succession planning, leadership development

and change management.

O U R A C T I O N S I N 2 0 1 6

Building on the strategic framework developed in

2015, key strategic focus areas were streamlined

and prioritised in 2016 to address company

challenges and accelerate business strategy

execution. Through a series of conversations

in consultation with company executives and

our board, the principles set out below were

identiﬁed to guide our strategic priorities.

The business context will drive the following six

human resources strategic priorities:

•

Shape culture with clear organisational

design and operating model

•

Develop and drive a health-of-discipline

framework across all functional areas to

support operational excellence

•

Build capable global leaders across the

organisation to drive a high performance

culture

•

Develop integrated talent management and

succession planning

•

Focus on employee engagement and

commitment

•

Develop simpliﬁed and integrated human

resource information systems

P E O P L E A R E O U R B U S I N E S S

The following principles guide the people strategy and will be used as a reference point
for periodic review and implementation. The strategy will:

Be consistent with and
support AngloGold Ashanti’s,
mission, values and strategic
focus pillars

Enable the establishment of a
productive

One-Global

company

with engaged and committed
team members that deliver
outstanding outcomes

Put in place the support
required for building and
developing capable, diverse and
values-based global leaders
across the company

Prioritising integrated talent
(including localisation) and
succession management for
critical leadership positions
across the company

Support a holistic approach
to human resource systems
and practices to maximise
effectiveness and some
consistency

Be consistant with our people
model – How We Work – to
drive the right management
practices and culture aligned to
our values

Picture:

Mponeng, South Africa

View video of Nozipho January-Bardill, chairperson of our Social, Ethics and Sustainability Committee,
afﬁrms AngloGold Ashanti’s commitment to gender diversity and the empowerment of women.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

P E O P L E A R E O U R B U S I N E S S

( C O N T I N U E D )

Collectively, these six strategic priorities

enable us to respond to the primary challenge

of ensuring organisational effectiveness to

navigate rationalisation and growth operating

business modes. Frameworks outlining the

intent, company position, guiding principles,

process requirements and performance

measures in each priority area have been

developed. All operations will work to ensure

that the requirements are met in a way that

is globally consistent yet locally relevant.

In the following sections, we reﬂect on our

performance in the strategic priorities of

organisational leadership, integrated talent

management and employee engagement.

O R G A N I S AT I O N A L L E A D E R S H I P

Leadership is an integral part of AngloGold

Ashanti’s ‘How we Work’ people

management philosophy. How we Work

practices are clearly set out and cover

management and people practices and

provides skills, tools and guidelines for

effective leadership. People practices include

our procedures and practices on employee

engagement and development, hiring,

retention, and retirement. The How we Work

system is currently being launched across

the AngloGold Ashanti group, championed

by the human resources team as a people

management tool to:

•

achieve a high performance culture

•

enable human resources to play a strategic

role in the business

•

enable managers to successfully execute

their roles

•

create a common culture

•

create a highly engaged workforce

•

enable the business to achieve its strategic

objectives

•

become the recognised employer of choice.

In line with this philosophy, a leadership

competency framework is being developed to

clearly outline the competencies and behaviours

required by AngloGold Ashanti leaders. Going

forward, a 360-degree leadership assessment

will be launched to assess the progress of

leadership practices and develop interventions

to address identiﬁed gaps.

During the year, the Chief Executive Ofﬁcer’s

talent pool, comprising Stratum IV (Vice

President level and above), was reviewed and

presented to the board. Critical leadership

and technical positions were identiﬁed, and

potential successors in the short, medium and

long term were identiﬁed for all these positions.

In the approach, talent was reviewed cross-

functionally across AngloGold Ashanti.

The cross functional talent reviews assist

with the management of speciﬁc talent

management risks, including unﬁlled vacancies

in critical leadership and specialist positions,

ﬁlling positions with under-developed

successors, poor assimilation of talent into

leadership and specialist positions, and poor

deployment of talent against business goals.

In order to ensure that these potential risks

are avoided, we have developed plans for

potential successors through a blended

learning approach, covering both formal and

informal training. Additionally, while focusing on

strengthening the leadership bench strength,

we are mindful of gender diversity and we

continue to work towards gender parity.

We continue to make progress with internal

succession placements – about 70% of key

positions have been ﬁlled internally. At our

Continental Africa operations, where the company

largely employed expatriate staff in the past,

employment of expatriates has been reduced

by 44% in the past three years. The operations

have continued to perform well with this greater

localisation of employment. In the South

Africa region, we implemented the Advanced

Leadership Development (ALDP) and Managerial

Leadership Development (MLDP) programmes

in partnership with the University of Cape Town

Graduate School of Business. The programmes

aim to provide managers with the requisite skills,

knowledge and required behaviours to be effective

leaders by facilitating exposure to classroom

training as well as on-the-job coaching and

mentoring. Also see more details in the

<SDR>

Y O U N G TA L E N T D E V E L O P M E N T
( C H A I R M A N ’ S Y O U N G
L E A D E R S H I P D E V E L O P M E N T
P R O G R A M M E )

In strengthening employee development

and expanding the leadership pipeline

internally, AngloGold Ashanti has also

focused on growing talent from lower levels

through the Chairman’s Young Leaders

Programme, which is now in its second year.

The 2015 intake focused on high potential

future leaders from mining related technical

disciplines such as geology, engineering

and metallurgy. In 2016, this was expanded

to include talent in support functions,

such as ﬁnance and human resources and

sustainability. Ten young leaders participated

in the programme, receiving global exposure

to the business through three cross functional

job rotations across the business during

the year.

In reviewing the progress of the 2015 intake,

ﬁve of the of participants were promoted to

senior roles and two returned to their previous

roles with expanded responsibilities, and

undertook further development to strengthen

their technical, supervisory, business and

project management skills.

TA L E N T M A N A G E M E N T A N D
S U C C E S S I O N

As AngloGold Ashanti evolves to embrace a

strategy aimed at disciplined, value-adding

growth, our work is inﬂuenced by both the

macro business environment in which we

operate and the company’s business strategy.

Our business priorities include a critical

focus on having the right people doing the

right work well, which is linked to our talent

management approach.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

P E O P L E A R E O U R B U S I N E S S

( C O N T I N U E D )

We recognise that effective talent management

and succession planning enables current and

future business success, and contributes to

securing our long-term future as a company.

The main objective of our talent management

teams is to ensure that an integrated and

standardised succession and talent pool

planning process is used across AngloGold

Ashanti. The teams have been equipped to

perform their roles in this process, supporting

leadership in identifying talent and producing

robust succession plans. The reporting

framework has also been developed and

integrated into the process to allow for

transparency of results.

Many milestones have been achieved, beginning

with analysis of the existing talent data, to

understand the baseline. Involvement of the

respective human resources teams was pivotal

in the roll-out of the talent management toolkit,

and in career and development discussions.

As a result, a robust succession plan has been

developed and approved by the Chief Executive

Ofﬁcer and the Executive Committee, with

development plans and initiatives in place to

support succession within the organisation.

During 2016 we continued to cascade the

talent management process down various

organisational levels and across all company

operations. When rolling out integrated talent

management and succession planning, all

operations are required to meet the following

process requirements:

•

develop competency assessment based on

valid criteria

•

identify talent pools and succession plans

•

implement accelerated development plans

•

effective performance management

•

develop and implement talent retention

strategies

As part of skills development, the AngloGold

Ashanti Training and Development Services

(ATDS) in South Africa, which has eight

major training centres, and provides

comprehensive technical, leadership and

behavioural training and development.

ATDS is fully accredited by the South

African Mining Qualiﬁcations Authority

(MQA) and is ISO9001 and OHSAS18001

accredited. Learners are primarily employees

of AngloGold Ashanti’s South Africa and

Continental Africa regions, but also include

learners from external organisations such as

the South African National Defence Force

and the national power utility, Eskom.

E M P L O Y E E E N G A G E M E N T

AngloGold Ashanti initiated a global

engagement survey in August 2014, with a

view to conducting it every two years. The

survey was conducted by external providers

(Talent Map & Hay) and a representative

sample of employees surveyed across all

levels, including age, gender, race and tenure.

Customised questions, pertinent to AngloGold

Ashanti, were included with speciﬁc focus

on safety, company values and ethics. The

response rate was 64% with an overall

engagement score of 69%, achieving a sound

score within a comparative group of scores

that ranged from 68% to 72%.

The survey focused on the following key

elements/dimensions:

•

company values

•

organisational vision

•

ethics

•

senior leadership practices

•

managerial effectiveness

It is with these key dimensions in mind that the

System for People was reﬁned and How We

Work was introduced as a global management

system to enable accountable leadership and

implementation of the requisite people

management practices within AngloGold Ashanti.

To address concerns raised in the employee

survey, the group compliance team launched

an ethics awareness campaign across

the business, including online ethics and

compliance training. As at end of 2016, more

than 96% of employees had completed their

assigned online compliance training.

Some of the key interventions include:

•

Establishing the Serious Concerns

Committee, which includes the Chief

Financial Ofﬁcer, Executive Vice Presidents:

Legal and Compliance, and Group

Human Resources

•

Publicising whistleblowing outcomes in the

Compliance newsletter and thus holding

employees accountable for their conduct

•

Ensuring senior management is aware of ethical

issues through the development and chairing

of the Serious Concerns Committee (ongoing)

•

Development of new online ethics training

material

Having taken heed of the results of the

Employee Engagement Survey conducted in

2014, during 2017 we will be conducting a

follow-up, which is in line with our two-year

plan. As a company it is important for us

to understand our employees’ perceptions

of the company’s vision, culture, work

environment and our policies.

We are committed to keeping the employees’

views conﬁdential and to give all employees

a platform to express their views on the

company. The survey is being delivered by

TalentMap, a company that specialises in

employee engagement measurement

and benchmarking.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Our strategy /

Performance against strategic objectives /

Managing and mitigating risks /

This section sets out how we create

value for our stakeholders, delivering

on our strategy in the short, medium

and long-term.

S E C T I O N 3

S T R A T E G Y

Picture: Brazil

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A n g l o G o l d A s h a n t i ’s c o r e s t r a t e g i c

f o c u s i s t o g e n e r a t e s u s t a i n a b l e

c a s h f l o w i m p r o v e m e n t s a n d

r e t u r n s b y f o c u s i n g o n f i v e k e y

a r e a s , n a m e l y : p e o p l e , s a f e t y a n d

s u s t a i n a b i l i t y ; e n s u r i n g f i n a n c i a l

f l e x i b i l i t y ; a c t i v e l y m a n a g i n g

a l l e x p e n d i t u r e s ; i m p r o v i n g t h e

q u a l i t y o f o u r p o r t f o l i o ; a n d

m a i n t a i n i n g l o n g - t e r m o p t i o n a l i t y.

O U R S T R A T E G Y

F o c u s i n g o n t h e s t r a t e g i c a r e a s o f t h e c o m p a n y

HIGH-QUALITY portfolio of

long-life, pure gold assets

with strong leverage to

energy and currencies

Transparent, DECISIVE,

ethical management team,

focused on delivery and

shareholder value

PRIORITISING MARGINS

over volume; focus on cost

and capital discipline

Decisive STRATEGIC

RESPONSE to lower

gold price; business plans

adjusted and exploration

curtailed

BALANCE SHEET

FLEXIBILITY; appropriate

liquidity, covenant and

maturities

WELL-DEVELOPED

ENGAGEMENT model

ensures strong stakeholder

relationships and licence

to operate

ANGLOGOLD ASHANTI’S

I N V E S T M E N T C A S E :

Optimise overhead, costs and

capital expenditure

Maintain long-term optionality

Focus on people, safety and sustainability

Ensure financial flexibility

Improve portfolio quality

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

RATEGIC FOCU

S A

People are the foundation of our business.
Our business must operate according to our values if
it is to remain sustainable in the long term.

We must ensure our balance sheet always remains
able to meet our core funding needs.

All spending decisions must be thoroughly scrutinised
to ensure they are optimally structured and necessary
to fulﬁl our core business objective.

We have a portfolio of assets that must be
actively managed to improve the overall mix of
our production base as we strive for a competitive
valuation as a business.

While we are focused on ensuring the most efﬁcient
day-to-day operation of our business, we must keep
a close eye on creating a competitive pipeline of
long-term opportunities.

These focus areas will drive our plans for

inward investment in 1717 to deliver better

quality production that will add to margins,

extend mine lives and also shape the portfolio

in the longer term.

I N T E G R AT E D R E P O RT

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Strategy

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Shareholder information

OUR CORE STRATEGIC FOCUS AREAS REMAIN:

P E R F O R M A N C E A G A I N S T S T R A T E G I C O B J E C T I V E S

1: FOCUS ON
PEOPLE, SAFETY,
AND SUSTAINABILITY

P e o p l e a r e t h e b u s i n e s s – ‘ o u r

p e o p l e ’ i n c l u d e o u r e m p l o y e e s ,

h o s t c o m m u n i t i e s a n d a l l o t h e r

s t a k e h o l d e r s a f f i l i a t e d t o o u r

a c t i v i t i e s . S t a r t i n g w i t h o u r

e m p l o y e e s , t h e k e y a s p e c t i n

e n s u r i n g d e l i v e r y o n o u r s t r a t e g y

i s t o c r e a t e t h e r i g h t c o n d i t i o n s

f o r t h e m t o t h r i v e . We e n s u r e t h a t

w e h a v e t h e r i g h t p e o p l e , d o i n g

t h e r i g h t w o r k i n t h e r i g h t r o l e s

w o r k i n g t o g e t h e r t o a d d r e s s t h e

c o m p a n y ’s k e y s t r a t e g i c o b j e c t i v e s .

The importance of human capital – our

people – in achieving business success

is reﬂected in our talent retention and

management drive, employee development,

and succession planning. Our drive to

maintain sustainable cash ﬂows is not only

dependent on our capable employees but

is also inﬂuenced by our ability to operate

safely in line with our ultimate goal of zero

harm. We conduct our business with an aim

to strengthen our licence to operate, with

the full engagement of host communities

and governments, while remaining

responsible stewards of the environment,

notwithstanding the invasive nature

of mining.

Achieving our strategic objectives – with the

central goal of delivering on sustainable cash

ﬂow improvements and returns – enables us

to create value by investing back into

the communities.

AVERAGE NUMBER OF EMPLOYEES 2016

52,649

NUMBER OF FATALITIES

NUMBER OF REPORTABLE
ENVIRONMENTAL INCIDENTS

PRODUCTIVITY

Continuing operations (oz/TEC)

7.66

7.77

9.30

9.50

8.97

ENERGY CONSUMPTION

(Petajoules)

WATER USE

(Gigalitres)

COMMUNITY INVESTMENT

($000)

24,907

22,536

14,799

15,228

20,156

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

P o s i t i v e c a s h f l o w m o m e n t u m w a s

a c h i e v e d d e s p i t e t h e v o l a t i l i t y

i n t h e g o l d p r i c e . T h i s a f f o r d e d

A n g l o G o l d A s h a n t i t h e a b i l i t y

t o r e t i r e t h e c o m p a n y ’s m o s t

e x p e n s i v e d e b t . B y r e d u c i n g d e b t

l e v e l s , a d d i t i o n a l b a l a n c e s h e e t

f l e x i b i l i t y w a s g a i n e d , r e d u c i n g

t h e n e t d e b t : a d j u s t e d E B I T D A r a t i o

t o w e l l b e l o w t h e t h r e s h o l d o f o u r

c o v e n a n t l e v e l s o f 3 . 5 t i m e s .

The balance sheet currently provides the

ﬁnancial ﬂexibility required in the current

volatile environment. It remains robust with

strong liquidity, sufﬁcient undrawn facilities and

long dated maturities, while positioning the

company to remain self-sufﬁcient in pursuing

low-capital, high-return opportunities. Our

improved balance sheet and free cash ﬂow

have helped the company to resume payment

of a cash dividend, which was suspended

after the ﬁrst quarter of 2013, amid efforts to

conserve cash.

Our focus remains on improving

margins despite gold price volatility.

Corporate costs for the year were down 22%,

as prudent cost management continued.

All-in sustaining costs of $986/oz for the year

remained below our current price used to

calculate Ore Reserve of $1,100/oz. However,

capital expenditure together with exploration

and evaluation costs increased as self-help

measures continued with reinvestment in low-

capital, high-return projects within our business.

During the year, we introduced the Operational

Excellence programme, which ﬁnds innovative

ways to improve efﬁciencies. Whereas the P500

costs initiative involves processes for identifying

and monitoring the execution of discrete cost

reduction projects, Operational Excellence

drives improved behaviours from every person

in the work place. This is about continuous

improvement across all facets of the business,

using P500 processes to support the cost

improvements. We continue to identify and

implement operational efﬁciencies, reduce cost

structures and pursue any other initiatives to

improve cash ﬂows.

P E R F O R M A N C E A G A I N S T S T R A T E G I C O B J E C T I V E S

( C O N T I N U E D )

3: OPTIMISE
OVERHEAD
COSTS AND
CAPITAL
EXPENDITURE

2: ENSURE
FINANCIAL
FLEXIBILITY

ADJUSTED EBITDA

($m)

2,486

1,525

1,616

1,472

1,548

CORPORATE AND
OVERHEAD COSTS

($/oz)

NET DEBT TO
ADJUSTED EBITDA

(times)

0.83

2.04

1.94

1.49

1.24

ALL-IN SUSTAINING COSTS

Continuing operations ($/oz)

1,285

1,195

1,020

910

986

FREE CASH FLOW

($m)

(666)

(1,064)

(112)

141

278

CAPITAL EXPENDITURE

(1)

($bn)

2.32

1.99

1.21

0.86

0.81

(1)

Including discontinued operations.

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

I n v e s t i n g i n o u r p o r t f o l i o t o

i m p r o v e l o n g - t e r m s u s t a i n a b i l i t y

o f t h e b u s i n e s s h a s b e e n a

f u n d a m e n t a l e l e m e n t o f o u r

s t r a t e g y o v e r t h e p a s t f o u r y e a r s .

Our focus is on improving the quality of

production to enhance margins rather than on

growth for its own sake. We have continued

to invest in the below 120 level life-extension

project at Mponeng in South Africa and the

feasibility study for phase 2 of the project is

being progressed. At Gramalote in Colombia,

work is underway to complete a prefeasibility

study by the end of 2017, which is expected to

allow the conversion of the resource to reserve.

F o c u s r e m a i n s o n t h e l o n g - t e r m

p r o s p e c t s o f t h e b u s i n e s s , w i t h

e x p l o r a t i o n u n d e r t a k e n d u r i n g t h e

y e a r i n A u s t r a l i a , B r a z i l , A r g e n t i n a ,

G u i n e a , Ta n z a n i a , C o l o m b i a a n d

t h e U S .

The exploration programme continues to

yield good results, with most of the year’s

depletions offset by Ore Reserve gains while

the Mineral Resource also increased. We

pursue high-return brownﬁelds opportunities

that are aimed at enhancing the quality

of production, extending mine lives and

improving long-term optionality. These include

work at Cuiabá, in Brazil, where Ore Reserve

development is expected to improve mining

ﬂexibility; at Iduapriem in Ghana, where we

will strip waste rock from the Teberebie ore

body to extend mine life, and lower cash

costs; at Geita, in Tanzania, where continued

ramp-up of underground production will

replace depleting open-pit ore in future; at

Sunrise Dam, in Australia, where investment

in plant modiﬁcations are expected to improve

P E R F O R M A N C E A G A I N S T S T R A T E G I C O B J E C T I V E S

( C O N T I N U E D )

4: IMPROVE THE
QUALITY OF THE
PORTFOLIO

5: MAINTAIN
LONG-TERM
OPTIONALITY

AVERAGE GOLD
PRICE RECEIVED

($/oz)

1,664

1,401

1,264

1,158

1,249

EXPENSED EXPLORATION
AND EVALUATION COSTS

(1)

($m)

461

292

156

140

144

ATTRIBUTABLE
ANNUAL PRODUCTION

Continuing and discontinued operations (Moz)

3.9

4.1

4.4

3.9

3.6

(1)

Including equity-accounted investments.

gold recoveries; and at Kibali, in the DRC,

where additional Ore Reserve development

will be conducted ahead of a ramp-up in

underground production. In addition, in

Guinea, work is underway at Siguiri on the

combination plant project to extend mine life,

improve production at better margins; while

at Sadiola in Mali, subject to government

consents and agreements needed,

commencement of the hard rock sulphides

project is eminent, along with our joint venture

partner, to extend mine life and increase

production. In South Africa, a feasibility study

is underway at Mponeng to access the ore

body below 126 level, extending life and

ultimately increasing production, while the

Technology and Innovation project continues

to make progress, reﬂecting improvements in

reef-boring cycle times, now approaching our

targeted 72 hours/hole.

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

B A C K G R O U N D

To p g r o u p r i s k s a r e s t r a t e g i c ,

o p e r a t i o n a l o r e x t e r n a l .

Strategic (S) risks are those taken

voluntarily after consideration

of risk-versus-reward to achieve

AngloGold Ashanti’s strategic

objectives.

Operational (O) risks are

preventable risks resulting from

employees’ undesirable and

unauthorised actions as well as from

breakdowns in routine operational

processes and human error.

External (E) risks are those

emanating from uncertain and

uncontrollable events.

These risks have been identiﬁed, and

preliminarily quantiﬁed with input from

senior management, as speciﬁcally

requested. Relevant risk owners have

been consulted to conﬁrm the ratings,

both in terms of severity and likelihood,

to ensure correct alignment with other

independent assessments as conducted

from time to time.

M A N A G I N G A N D M I T I G A T I N G R I S K S

Picture:

Kibali, DRC

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

SUMMARY OF TOP GROUP RISKS

Ranking

(Previous)

Type

POTENTIAL RISK

1 (1)

External

Adverse gold and commodity prices, and currency movements

2 (5)

Strategic

Elevated political and country risk proﬁle in core production areas

3 (2)

Operational

Operational and safety underperformance negatively impacting

improved track record

4 (3)

Strategic

Inability to develop projects to bring Ore Reserves to account

5 (8)

Operational

Labour-related stoppages

6 (–)

Strategic

Capital projects

7 (6)

Strategic

Obuasi investment risk

8 (7)

Operational

Critical skills and talent retention

9 (9)

Strategic

Excessive debt levels and interest cost

10 (10)

Strategic

Legacy occupational and community health compensation

claims/litigation

SEVERITY

LIKELIHOOD

PRINCIPAL RISKS IDENTIFIED

Operational

External

Strategic

Ore Reserves

Capital projects

Obuasi

Political and country risk

Skills

Debt

Legacy
health

Labour

Operational
and safety
performance

Commodities and currencies

TOP GROUP RISKS HEAT MAP

G R O U P T O P R I S K S

T h e t o p g r o u p r i s k s a r e d e p i c t e d i n a ‘ h e a t m a p ’ b e l o w t h a t p l o t s

t h e s e v e r i t y a n d l i k e l i h o o d o f t h e t o p r i s k s .

Quantiﬁcation of the top group risks has been reviewed and a three-year time horizon has

been applied with the latest business planning data to reﬂect a more dynamic heat map.

This revised work was used to rank the risks in this report.

The risks tabulated above are the top ten risks to the group, ordered from highest to lowest

ranked in order of magnitude with the previously reported ranking in parentheses.

For further information regarding risks, refer to Risk Factors in the Form 20-F ﬁled with the SEC.

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

Potential consequences

Mitigation action plan

Expected outcome and residual risk

RISK 1:

Adverse gold and commodity prices, and currency movements *

•

Inadequate free cash ﬂow/ liquidity/ credit

rating impact

•

Inability to develop strategic growth and

development projects to bring the Ore

Reserve to account

•

Lower market capitalisation

•

Need to recapitalise the company at

lower equity prices and under poor

market conditions

•

Potential to breach ﬁnancial covenants

under the terms of the company’s

borrowing facilities

•

Retain the discipline to continue with self-help measures and

efﬁciency improvements

•

Maintain focus on cost and capital discipline to deliver competitive

all-in sustaining costs

•

Maintain long term sustainability and optionality by ensuring our

pipeline of opportunities is continuously replenished

•

Further reduce the annual interest bill

•

Further deleverage our balance sheet

•

Manage input oil costs to extent possible

•

Further decrease Obuasi expenditure, while ﬁnalising an

investment agreement

•

Further optimise Colombia expenditure, while maintaining optionality

and moving projects in that country up the value curve

•

The price of gold has been and continues to be signiﬁcantly volatile.

During 2016, the gold price traded from a low of $1,060/oz to a high

of $1,375/oz, remaining well below a peak of $1,900/oz, reached in

September 2011

•

Fluctuations in oil and steel prices have a signiﬁcant impact on

operating costs and capital expenditure estimates and could result

in signiﬁcant changes in total expenditure estimates for new mining

projects and render certain projects non-viable

•

Currencies remain exceedingly volatile driven by exogenous factors

and political and economic issues

•

Given a protracted period of a gold price of $1,100oz or lower,

without any compensating currency movement, AngloGold Ashanti

would be forced to revisit business plans, spending schedules and to

review costs

M I T I G AT I O N O F T O P 1 0 G R O U P R I S K S

* Risk is regarded as being imminent with an elevated potential to materialise over the next nine to twelve months

I N T E G R AT E D R E P O RT

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Strategy

Performance review

Accountability

Shareholder information

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

Potential consequences

Mitigation action plan

Expected outcome and residual risk

RISK 2:

Elevated political and country risk proﬁle in core production areas *

•

Political instability

•

Regulatory uncertainty

•

Adverse impact on our business plans

•

Adverse impact of market capitalisation

•

Employee safety and security concerns

•

Reduced cash ﬂow

•

Increased operational costs

•

Increased tax and royalties

•

Reputational damage

•

Allegations of corruption

•

Socio-political-economic analyses

•

Use of joint venture alliances in line with host country regulatory

requirements

•

Targeted stakeholder mapping and engagement with greater focus

on government structures, local community and non-governmental

organisations

•

Exploring opportunities for inclusive engagement and broader

collaboration with NGOs and activists

•

Our approach to artisanal and small-scale mining (ASM) is aligned

with the Africa Mining Vision:

•

Clear distinction between ASM (legal, regulated) and illegal

mining activities; practical country-based programmes to support

the formalisation of legal mining activities

•

Security programmes to secure tenements

•

Continued efforts to support and promote local employment

and procurement

•

In many of the jurisdictions in which AngloGold Ashanti operates,

governments and revenue authorities are seeking new ways to

increase revenues from mining. AngloGold Ashanti is experiencing and

expects further ministerial audits and reviews focused on proposed

ﬁscal changes given the increased gold price. Continuous reshufﬂing

of cabinets by host governments remains a serious engagement and

continuity issue

•

The South African political arena continues to be uncertain. The

Mining Charter is yet to be agreed between Government and the

mining industry, increasing investor unease.

•

The Brazilian political arena continues to be uncertain with

corruption allegations creating distrust between certain sectors of

society, business and government. However market conﬁdence is

slowly returning

•

In Tanzania, the government is adopting a hard stance on the

conduct of mining companies resulting in the cancellation of

mining licences and, in March 2017, announced the banning of

gold exports

•

At Obuasi, the Government of Ghana ﬁnally responded in October

to establish law and order. A new President and Government were

elected, presenting an opportunity for positive change

•

In Mali, allegations of corruption against top leaders are creating

political distrust

•

In Guinea, NGOs have accused the company of inadequate

resettlement practices

* Risk is regarded as being imminent with an elevated potential to materialise over the next nine to twelve months

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

Potential consequences

Mitigation action plan

Expected outcome and residual risk

RISK 3:

Operational and safety underperformance negatively impacting improved track record *

•

Reduced cash ﬂow and decreased liquidity

•

Reduction in earnings, reliability of delivery

and disproportionate penalty on share price

•

Decline in investor conﬁdence

•

Impact on corporate credit rating

•

Restricted ability to invest in strategic growth

and development projects

Continue implementation of the safe production strategy.

•

Drive operational excellence through productivity efﬁciencies in

the mining cycle, work routine, standards compliance, face length

generation and improved recoveries

•

Establishing a new cost base through P500 and the Operational

Excellence initiatives, global shared services, footprint reduction and

restructuring

•

Fatalities and safety-related stoppages continue to be a major

business risk in South Africa. Although the incidence of fatal

accidents has reduced year on year, the impact (and potential

impact) of such stoppages remains severe

•

There is increased risk that political inﬂuence may delay or hinder

strategic imperatives for cost rationalisation especially in procurement

and labour reductions

•

In Mali, allegations of corruption against top leaders are creating

political distrust

•

In Guinea, NGOs have accused the company of inadequate

resettlement practices

RISK 4:

Inability to develop projects to bring Ore Reserves to account *

•

Ore Reserve write-down and possible
decline in market capitalisation

•

Impairment and lower future earnings per share

•

Production proﬁle and business plan reduction

•

Loss of tenements

•

Premature mine closure or moth-balling
of operations

•

Identiﬁcation of suitable joint venture partnerships and alternative
sources of funding

•

Revised tenements strategy with focused exploration funding for
critical operations

•

Business planning and portfolio optimisation

•

Focused project management to deliver projects on budget and schedule

•

Efforts continue to complete prefeasibility studies into high-value projects
to declare an Ore Reserve and allow a base case for decision making

•

If the gold price does not increase, AngloGold Ashanti may not
expand Ore Reserve growth at all operations

•

Ore Reserve decreases and impairments

•

Substantial loss of growth opportunity and returns as may potentially
have to partner at less than optimal value

* Risk is regarded as being imminent with an elevated potential to materialise over the next nine to twelve months

I N T E G R AT E D R E P O RT

2 0 1 6

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Strategy

Performance review

Accountability

Shareholder information

Potential consequences

Mitigation action plan

Expected outcome and residual risk

RISK 5:

Labour-related stoppages *

•

Production stoppages and losses leading to
liquidity crisis

•

Intimidation of employees and violence and
damaged assets

•

Compromised safety and operational
conditions

•

Lower market capitalisation

•

Organisational restructuring

•

The risk of labour stoppages is growing and
applies to several countries, such as South
Africa, Mali, Argentina, Brazil, Guinea and
potentially Ghana

SOUTH AFRICA

•

Communication strategy using various platforms and ongoing,
regular updates

•

Pre-emptive dialogue with union structures and leadership, and using
existing union employee structures and consultation processes

•

Collaboration with gold sector peers to manage and contain the
contagion effect of labour risks across the industry

•

Legal strategies in place and recourse to exercise obligations as
contained in recognition agreements with labour unions

•

Strike prevention and management strategies and authority protocols
in place

CONTINENTAL AFRICA

•

Ongoing engagement and consultative meetings with unions

•

Dedicated regional human resources business partners support
operations

•

Capacity building with newly elected union committee members
(branch committees)

•

Regular reporting and updates to monitor trends and industrial
relations climate by operation

SOUTH AFRICA

•

Wage negotiations in other mining sectors continue to inﬂuence the

stance unions adopt leading up to the 2018 wage negotiations

•

The socio-political landscape in communities adjacent to operations

remains ﬂuid and volatile, with the emergence of the easy rallying

of the citizenry around emotive issues e.g. jobs, education and

service delivery

•

Various political formations directly protesting against the mining

industry and companies, such as students, the unemployed youth

and speciﬁc political parties

CONTINENTAL AFRICA

•

In West Africa, there is a growing tendency for cross pollination

between unions, and more confrontational negotiations often

focused on broader social grievances. In Tanzania, collective

bargaining is maturing however it remains cohesive and is

conducted in a structured manner

•

Pro-labour/union practices from government labour authorities

resulting in non-adherence to rule of law and/or labour relations best

practices in Guinea and Mali

•

Labour-strike risks will be further mitigated by stockpiling to dilute the

impact of such events

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

* Risk is regarded as being imminent with an elevated potential to materialise over the next nine to twelve months

I N T E G R AT E D R E P O RT

2 0 1 6

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Strategy

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Accountability

Shareholder information

Potential consequences

Mitigation action plan

Expected outcome and residual risk

RISK 6:

Capital projects *

•

Cost overruns

•

Project delays skills, permits, funding or

natural events

•

Poor quality or unﬁt for purpose delivery

•

Commissioning and ramp-up problems

•

Signiﬁcant ﬁnancial and reputational loss

•

Ensuring appropriate project skills, systems, structures and

governance are in place

•

Independent stage-gate reviews

•

Selected project steering committee participation by the group

planning and technical function

•

Colombia is a relatively unknown jurisdiction and therefore permitting/

licensing, broader stakeholder expectations/ demands and other

external factors could affect timelines and cause capital overruns

•

In South Africa, continued safety stoppages by the regulator and

union disputes regarding amendments to employment contracts,

such as shift times and work rosters, may potentially impact projects

•

Existing relationships with governments/regulators ensure adequate

engagement for approvals and permitting

•

Established procurement practices

RISK 7:

Obuasi investment risk *

•

Inability to redevelop the mine would

accelerate signiﬁcant closure liabilities

•

Inability to bring the Ore Reserve to account

•

Cash drain

•

Adverse socio-economic stakeholder impact

and reputational damage

•

Litigation with the Government of Ghana

(GoG)

•

Litigation, penalties and/or ﬁnes

•

Diplomatic engagement and appeal to government at the

highest level

•

Stakeholder engagement

•

Formal legal proceedings against GoG to protect and enforce its

contractual rights under the mining lease to sustain law and order

•

Finalise Obuasi feasibility study

•

Maintain care and maintenance operations

•

Notiﬁcation of suspensions to GoG and submit care and

maintenance Amendment of Operations (APMO)

•

Reduce holding costs

•

Negotiate with GoG to obtain requisite approvals and consents for

re-development of the mine

•

Negotiate an investment development agreement with the GoG

•

Seek alternative development partner

•

At Obuasi, the Government of Ghana ﬁnally responded in October

2016 to establish law and order, clearing the project site of illegal

mining activities

•

A new President and Government have been elected, presenting an

opportunity for positive change

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

* Risk is regarded as being imminent with an elevated potential to materialise over the next nine to twelve months

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Potential consequences

Mitigation action plan

Expected outcome and residual risk

RISK 8:

Critical skills and talent retention *

•

Insufﬁcient talent strength and succession
planning pool

•

Will affect ability to execute and deliver on
strategic objectives

•

Increased labour costs

•

Potential impact on productivity and safety
levels

•

Loss of critical skills and talent may impact
market and investor conﬁdence

•

Pay competitive market-related salaries and beneﬁts

•

Further broaden short- and long-term incentive measures to include
ﬁnancial and non-ﬁnancial aspects of performance

•

Roll-out of the global performance management system aligning
roles with strategic plans

•

Implementation of an integrated talent management and succession
planning process across the business which increases coverage ratio
for critical skills

•

Implementation of talent development interventions

•

Mitigating factors will contribute to the identiﬁcation, development
and retention of critical skills and talented employees

•

The various initiatives underway will create a pool of potential leaders
and contribute to the creation of a healthy working environment and
culture that is aligned with corporate values – 70% of key succession
vacancies in the past year have been ﬁlled by internal appointments

•

The evolving global macro-economic landscape has increased the
risk associated with losing key skills (technical and non-technical) to
companies domiciled outside of South Africa

RISK 9:

Excessive debt levels and interest cost

•

Balance sheet stress

•

Raised cost of capital

•

Inability to develop strategic growth and
development projects

•

Impeded portfolio options

•

Breach of debt covenants

•

Credit rating pressure and increased
potential for downgrades

•

Proactive and timely approach to reﬁnancing of facilities

•

Diversiﬁed debt sources and instruments as well as tenor

•

Have one period covenant waiver subject to qualifying criteria

•

Cost management to preserve cash and support credit
metrics/ ratings

•

Liquidity and cash ﬂow planning

•

Eliminating remaining portion of high-yield bond (highest interest)

•

The likelihood of a ﬁnancial covenant breach has signiﬁcantly
reduced.

•

Credit rating agencies have revised our outlooks to Stable
and Positive.

•

Flexibility to deal with operational and economical risk

•

Core current liquidity is provided by the $1bn revolving credit
facility and the A$ revolving credit facility both of which are
available to 2019.

RISK 10:

Legacy occupational and community health compensation claims/litigation

•

Impacted employee well-being

•

Financial impact

•

Market capitalisation reduction

•

Reputational damage

•

Defend all claims on their merits

•

Participate in industry working group on occupational lung diseases
(OLD) to formulate a comprehensive and sustainable solution to OLD

•

Entered into a settlement agreement with claimants’ counsel for full and
ﬁnal settlement with no admission of liability of about 4,400 individual
claims brought against both AngloGold Ashanti and Anglo American
South Africa

•

Out-of-court settlement

•

Identiﬁcation of a comprehensive and sustainable solution to OLD

•

Establish a “legacy fund” that will pay “top-up” amounts to former
mine workers

•

Transfer employees from ODMWA to COIDA**

•

Improve administrative process at MBOD and CCOD**

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

* Risk is regarded as being imminent with an elevated potential to materialise over the next nine to twelve months.
** See Glossary of Terms for full names.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

Optimise overhead, costs and

capital expenditure

Maintain long-term optionality

Focus on people, safety and sustainability

Ensure financial flexibility

Improve portfolio quality

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

RATEGIC FOCU

S A

•

Labour-related stoppages

•

Obuasi investment risk

•

Security of power supply and rising cost

power in South Africa

•

Operational and safety underperformance

negatively impacting improved track record

•

Elevated political and country risk proﬁle in

core production areas

•

Asset integrity failures and compromised

reliability at South African operations

•

Capital projects

•

Adverse gold, commodity and

currency movements

•

Excessive debt levels and interest cost

•

Labour-related stoppages

•

Legacy occupational and community health

compensation claims/ litigation

•

Operational and safety underperformance

negatively impacting improved track record

•

Labour-related stoppages

•

Critical skills and talent retention

•

Loss of ‘social licence to operate’

•

Legacy occupational and community health

compensation claims/ litigation

•

Operational and safety underperformance

negatively impacting improved track record

•

Adverse gold, commodity and

currency movements

•

Labour-related stoppages

•

Inability to develop projects to bring

Ore Reserves to account

•

Legacy occupational and community

health compensation claims/ litigation

•

Capital projects

•

Adverse gold, commodity and

currency movements

•

Inability to develop projects to bring

Ore Reserves to account

•

Obuasi investment risk

•

Elevated political and country risk proﬁle

in core production areas

•

Capital projects

T h e t o p g r o u p r i s k s a r e d e p i c t e d

a l o n g s i d e A n g l o G o l d A s h a n t i ’s

s t r a t e g i c o b j e c t i v e s t h a t c o u l d

b e a d v e r s e l y a f f e c t e d s h o u l d t h e

r i s k ( s ) m a t e r i a l i s e . I n a d d i t i o n ,

t h e r i s k a p p e t i t e p e r s t r a t e g i c

b u i l d i n g b l o c k i s s t a t e d .

‘Cautious with a preference

for safe delivery’

‘Cautious with a
preference for
safe delivery’

‘Flexible and willing
to take strongly
justifiable risks’

‘Cautious with a
preference for safe
delivery’ except for
safety: ‘minimalist
and extremely
conservative’

‘Flexible and willing
to take strongly
justifiable risks’

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

M A N A G I N G A N D M I T I G A T I N G R I S K S

( C O N T I N U E D )

T O P G R O U P
O P P O RT U N I T I E S

We recognise that

identifying and managing

opportunities is an

important component

of risk management.

The company identiﬁes

suitable opportunities –

endeavouring to exploit,

harness or maximise them

– with the aim of creating

value from mitigating our

risks. This table lists our key

opportunities along with the

strategy for each.

TOP GROUP OPPORTUNITIES

Type

Opportunity

Strategy

Strategic

Disciplined approach to growth

•

Continue with disciplined investment to ensure pipeline of brownﬁeld and greenﬁeld expansions

•

Maintain diversiﬁed portfolio capable of withstanding “single jurisdiction / operation” shocks

Stakeholder relations

•

Enhanced engagement model to build strong stakeholder relationships

Continued debt reduction to

improve ﬂexibility

•

Bond repurchase

•

Diversiﬁed sources of funding

•

Reduced cost and restructured organisation

Colombia

•

Revised tenements strategy with focused exploration funding

•

Work to ensure that ‘social licence to operate’ is realised

•

Partnering options

•

Optimise expenditure

Obuasi

•

Reduce holding costs

•

Deliver feasibility study and reﬁne it to ensure optimal returns from high-margin, mechanised operation

•

Ensure buy-in for redevelopment from all stakeholders including government

•

Find optimal funding structure and test market for potential value-creating joint venture

Business planning and portfolio

optimisation processes

•

Sound business planning with top-down goals

•

Portfolio rationalisation and optimisation

Asset sale or joint venture for

full value

•

Potential to realise full value of operating asset in cash for sale or joint venture

•

Increased ability to deleverage in a value-enhancing manner

Operational

Improving production mix

•

Improved efﬁciencies and mine plan changes driven through operational excellence initiatives

•

Inward investment into high-return projects

Beneﬁts from increase in gold

price enhanced by cost reduction

•

Actively improve the quality of the portfolio

•

Focus on margins through initiatives to improve all-in sustaining costs and all-in costs, including Project 500

and the Operational Excellence initiative

•

Improve leverage to the gold price

Pursuing key growth opportunities

for our asset portfolio

•

Focused brownﬁeld exploration activities

•

Prefeasibility studies for life-of-mine extensions and improved recoveries

Technology step-change in

South Africa

•

AngloGold Ashanti Technology and Innovation Consortium

•

Proof of concept work relating to geological drilling, reef boring, ultra-high strength backﬁll and haulage

boring machines

(1)

•

Stakeholder identiﬁcation and engagement

Beneﬁts from weaker currencies

and lower oil price

•

Demonstrate leverage at operations most exposed to declining currencies

•

Demonstrate leverage at operations that use most oil/diesel

(1)

Refer to Planning for the future

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

S E C T I O N 4

P E R F O R M A N C E R E V I E W

CFO’s review /

Financial review /

Economic value-added statement /

Regional reviews /

Five-year statistics: by operation /

Mineral Resource and Ore Reserve

– summary /

119

Planning for the future /

125

One-year outlook /

131

We present our financial and operational

performance for the year, an update of
our natural capital – Mineral Resource

and Ore Reserve – and what is done to

improve existing portfolio quality and to

create long-term optionality.

Picture: Tropicana, Australia

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C F O ’ S R E V I E W

A n g l o G o l d A s h a n t i ’s s t r a t e g y

r e m a i n s o n t r a c k w i t h a f o c u s

o n g e n e r a t i n g f r e e c a s h f l o w o n

a s u s t a i n a b l e b a s i s . T h i s i s t h e

s e c o n d c o n s e c u t i v e y e a r o f f r e e

c a s h f l o w g e n e r a t i o n , w h i c h s a w

a 9 7 % i m p r o v e m e n t o n t h e f r e e

c a s h f l o w l e v e l s a c h i e v e d i n 2 0 1 5 .

Christine Ramon:

Chief Financial Ofﬁcer

View CV

aving delivered improvements in

production and cost structures,

together with balance sheet ﬂexibility,

management will continue to work to

strengthen the foundation of the business by

unlocking value at its internationally diverse

portfolio of assets. The extraction of value

through high-return, low-capital projects with

relatively accelerated payback periods, will

become the next source of improved cash

ﬂows and portfolio quality enhancements.

These, in turn, will assist in driving sustainable

cash generation from the business.

Free cash ﬂow for the year under review was

$278m, nearly double the $141m achieved in

2015, after meeting $30m in once-off costs to

redeem the high-yield bonds. Free cash ﬂow

was assisted by a strong turnaround in the

production performance in the second half

of the year, a higher gold price achieved and

lower interest payments.

Net cash inﬂow from operating activities for the

year under review ended at $1,186m, $47m

more than the $1,139m achieved in 2015.

After three consecutive years of a drop in the

gold price, the year under review was marked

by a partial recovery with the average price

received increasing by $91/oz or 8% over the

course of the year. This improvement in the

average gold price received was partly offset

Free cash ﬂow of

$278m

97%

from 2015

(after once-off bond redemption costs)

$1.25bn

high-yield bonds fully redeemed,

reducing debt levels and interest costs and

improving free cash ﬂow

Production of

3.628Moz

, within original

market guidance

Total cash costs of

$744/oz

and all-in

sustaining costs of

$986/oz

, within revised

market guidance (original market guidance

revised primarily due to strengthening of

local currencies)

Adjusted headline earnings of

$143m

, up

192%

from

$49m

in 2015

Reduced net debt level of

$1.92bn

and

improved net debt to adjusted EBITDA

ratio of

1.24

times

Dividends of

130

South African

cents per

share (~10 US cents per share) resume after

a three-year hiatus

Proven and probable gold reserves at

year end of

50.1Moz

, substantially

offsetting depletion

Picture:

Siguiri, Guinea

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

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Strategy

Performance review

Accountability

Shareholder information

C F O ’ S R E V I E W

( C O N T I N U E D )

by a decrease of 319,000oz or 8% in group

attributable production (from continued and

discontinued operations).

The all-in sustaining cost per ounce came

under pressure during the year under review

increasing by $76/oz or 8%. This however,

still reﬂects our continued cost discipline

and our exposure to weaker local currencies

in some jurisdictions. Unfortunately, this

was offset by increases in sustaining capital

expenditure, inﬂation and exploration costs,

and the decline in production levels year-

on-year.

The balance sheet remains robust, with

strong liquidity comprising $950m undrawn

on the $1bn US dollar syndicated RCF, $60m

undrawn on the $100m US dollar RCF, A$265m

undrawn on the A$500m Australian dollar

RCF, approximately R2.2bn available from the

South African RCF and other facilities and cash

and cash equivalents of $215m, as at the end

of December 2016. We continued to make

inroads in reducing our net debt position.

As was the case in prior years, the group

remains committed to ﬁnding a long-term

solution for Obuasi in Ghana.

Our taxation exposures continue to decrease

during the year through considerable effort

on our side. Our transparent group tax policy

revised at the end of 2015 supports a low risk

approach in dealing with tax matters across

the various jurisdictions in which we operate.

POSITIVE CASH FLOW MOMENTUM

We continue to deliver on our strategy

of improving free cash ﬂow in a volatile

environment as can be seen from the

graph alongside.

The positive cash ﬂow momentum over

the past three years has given us comfort

regarding sustainable free cash ﬂow

generation in our business, despite signiﬁcant

volatility in the gold price. This is the second

year in a row that we ended free cash ﬂow

positive on an unadjusted basis at $278m

in 2016 and $141m in 2015. We also saw

a year-on-year increase in unadjusted free

cash ﬂow of 97%, which is a signiﬁcant

achievement given the volatile environment

in which we had to operate during the year

under review.

As a result of the sustained free cash ﬂow

generation, the board has approved the

resumption of the payment of an annual

dividend. The declaration of the dividend,

although modest at ~10 US cents a share,

reﬂects management’s commitment to

capital discipline, prioritising shareholder

returns and its conﬁdence in the ability

of the business to sustain free cash

ﬂow generation, in a volatile economic

environment. Our dividend policy is based

on 10% of free cash ﬂow generation pre-

growth capital expenditure, subject to the

board’s discretion taking into consideration

prevailing market conditions, the strength

of our balance sheet and our future capital

commitments.

FOCUSING ON MARGINS

We continue to focus our efforts on driving

operational excellence and cost efﬁciency

across our business, regardless of the gold

price environment in which we operate and

over which we have no control.

Our focus remains on improving margins

despite gold price volatility, currency

headwinds and lower grades. Both our

all-in sustaining cost and all-in cost margins

remained steady compared to last year at

21% and 14%, respectively. This is evidence

of a group committed to improving efﬁciencies

and widening, or at least maintaining, margins

regardless of a lower gold price.

We will continue to work towards widening

these margins, by focusing on the controllable

factors, in particular:

•

stringent cost management

•

reinvestment in low-capital, high-return

opportunities within our business

•

driving our Operational Excellence

programme, i.e. considering innovative ways

to improve efﬁciencies at our operations

* 2014 Adjusted for Obuasi redundancy costs and Rand Reﬁnery loan
** 2015 Adjusted for bond redemption premium of $61m on part settlement of $1.25bn high-yield bonds
*** 2016 Adjusted for bond redemption premium of $30m on settlement of the remainder of the $1.25bn

high-yield bonds

FREE CASH FLOW GENERATION

Adjusted FCF ($m)

2012

2013

2014

2015

2016

(666)

(1,064)

142

202

308

***

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

CONTINUED FINANCIAL FLEXIBILITY

The net debt levels in the group fell by a

further 13% from last year mainly due to the

strong free cash ﬂow generation on the back

of lower interest costs and the higher gold

price received. Going forward, we expect our

positive cash ﬂow momentum to continue to

beneﬁt from efﬁciency improvements as well

as the leverage to gold price, despite potential

local currency headwinds.

Our net debt to adjusted EBITDA ratio of

1.24 times reﬂects ample headroom to our

covenant levels of 3.5 times net debt to

adjusted EBITDA. Our balance sheet remains

robust with strong liquidity, sufﬁcient undrawn

facilities and long dated maturities, providing

the ﬁnancial ﬂexibility required in the current

volatile environment, while positioning the

group to remain self-sufﬁcient with regards

to its low-capital, high-return reinvestment

opportunities as well as to resume the

payment of an annual cash dividend.

D E L I V E RY A G A I N S T 2 0 1 6
F I N A N C I A L O B J E C T I V E S

1. Maintain our focus on cost and capital discipline

to deliver competitive all-in sustaining costs and

all-in costs

The group over the last couple of years

adopted a number of measures focused on

sustainably reducing the cost associated

with producing gold. These initiatives have

covered a broad spectrum of activities,

including a greater focus on capital allocation

and project delivery, as well as enhanced

recoveries, while internal cost reduction

efforts continued simultaneously. We have

seen all-in sustaining costs fall 24% from

2013 to 2015; however this trend reversed

in the year under review with all-in sustaining

cost coming in at $986/oz, up from $910/oz

in 2015. The increase in the all-in sustaining

cost reﬂects the effect of a 15% decline

in grades, coupled with safety-related

stoppages in South Africa, which negatively

affected our year-on-year production.

However, despite these operational concerns,

the all-in sustaining cost continues to reﬂect

our strong cost discipline and the effect of

weaker local currencies in certain of the

jurisdictions in which we operate.

Our Project 500 cost reduction project

introduced in prior years has been embedded

into a wider-focused Operational Excellence

Programme, which we continue to actively roll-

out across all of our operations.

2. Further enhance margins and cash ﬂow through

continuing focus on self-help measures and

efﬁciency improvements, and further beneﬁting

from weaker currency and oil prices

Our margins on total cash costs (40%),

the all-in sustaining cost (21%), and all-in

cost (14%) remain stable on a year-on-

year basis and we will continue to manage

these margins at acceptable levels, in spite

of them coming under pressure in 2017

due to the signiﬁcant forecasted increase

in our sustaining capital expenditure. This

increased expenditure is required to ensure

that we continue to maintain and improve

our margins and cash generation ability in

years thereafter.

Cash ﬂow improvements have been noted

in both 2015 and 2016, despite a volatile

gold price and two successive years of lower

production, mainly the result of weaker local

currencies and the beneﬁts of the operational

excellence initiatives. As indicated before, free

cash ﬂow for the year, on an unadjusted basis,

amounted to $278m, a second consecutive

year of positive free cash ﬂow.

C F O ’ S R E V I E W

( C O N T I N U E D )

Total calculated with ZAR facilities at R13.7311/$
(excluding DMTNP), AUD facility at 0.7215$ to A$

Last-12-months adjusted EBITDA ratio based on restated results

UNDRAWN FACILITIES

At 31 December 2016

$1.576bn

A$265m

US$215m
cash

US$1.010bn

R2.2bn

NET DEBT AND NET DEBT TO ADJUSTED EBITDA

2015

2014

2016

1.81

1.70

1.94

2.02

1.95

1.54

1.49

1.47

1.44

1.26

1.24

3.5

2.5

1.5

0.5

3,500

3,000

2,500

2,000

1,500

Net debt to adjusted EBITDA

Net debt $m

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C F O ’ S R E V I E W

( C O N T I N U E D )

The weakening of the South African rand,

Argentinean peso, and Brazilian real was

beneﬁcial to us given that most of our cost

base in those countries is denominated in

the local currencies, while our gold is sold in

US dollars.

Our sensitivities to the oil price and local

currencies, which are issued with caution, are

as follows:

•

Every 10% average change in our currency

basket impacts input costs by ~$60/oz; and

•

Every 10% change in the average Brent

crude oil price impacts input costs by ~$4/oz.

3. Further decrease in Obuasi expenditure,

thereby reducing holding costs, while investigating

alternative options

In early February 2016, following the

incursion of hundreds of illegal miners inside

the fenced area of the Obuasi mine site,

AngloGold Ashanti Ghana, our subsidiary

that owns the Obuasi mine, was forced to

declare force majeure and, in the interests

of safety, withdrew all employees performing

non-essential functions. During 2016, at its

peak, an estimated 12,000 illegal miners

operated across the previously fenced-off

area of the site. A directive to clear the site of

illegal mining by 10 October 2016 was given

by the Minerals Commission (a Ghanaian

government body), which, along with a

multi-stakeholder committee it established,

prepared alternative sites off the company

lease for the miners to relocate to.

On 18 October 2016, the Security Task Force

took the ﬁrst concerted steps to start to restore

safety and security at the Obuasi concession.

At each step along the way, AngloGold Ashanti

Ghana, was at pains to petition authorities

to ensure that the process of clearing illegal

mining activity from site should be done

with the least amount of force and with full

deference to the Voluntary Principles on

Security and Human Rights.

Subsequent to year end, as of 13 February

2017, all areas within our fenced operational

area have been cleared of illegal miners, and

all identiﬁed illegal mining holes within the

fenced area have been closed. Following a

review of the safety, surface and underground

conditions, we have notiﬁed the Ghanaian

authorities that the circumstances that led to

the declaration of force majeure no longer exist

and as such lifted the force majeure with effect

from 13 February 2017.

There remains further work to be undertaken

in relation to the removal of the illegal mining

activities outside of the fenced area but within the

2013

2012

2,100

1,900

1,700

1,500

1,300

1,100

900

700

All-in sustaining costs*

Average gold price

All-in costs*

2014

2015

2016

ALL-IN SUSTAINING COSTS, ALL-IN COSTS AND AVERAGE GOLD PRICE

($/oz)

* World Gold Council standard adjusted to exclude stockpile write-offs.

Picture:

Obuasi, Ghana

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

C F O ’ S R E V I E W

( C O N T I N U E D )

Obuasi concession area. Only once that process

is complete, and the feasibility study for the

redevelopment of the mine has been updated

with the relevant information, will the company

be in a position to outline its plans for Obuasi.

Concurrently with these developments, a

governmental change occurred in Ghana in

December 2016 after peaceful democratic

elections. The company is in the process of

building relations with the new government

ofﬁcials and one of its objectives for 2017

is to drive the current Obuasi situation to a

sustainable resolution.

The care and maintenance costs of Obuasi

for the year, amounted to $70m and

management continues to actively manage

these costs in light of the continued pressure

on cost reduction.

4. Further decrease in Colombia expenditure, while

maintaining optionality and moving projects in that

country up the value curve

The group was successful in limiting its

exploration expenditure at its Colombian

properties, while maintaining its optionality

on these projects and moving it up the value

curve. For example, the outcome of exploration

activities at the Gramalote joint venture to

update and reﬁne the geological model

progressed to such an extent that it continues

to support the completion of a pre-feasibility

study by the end of 2017, which in turn would

enable the resource to reserve conversion.

The group continues to monitor progress on

all the projects in Colombia in addition to the

active management of community matters as

they arise.

5. Continue to target sustainable cash generation

Our efforts on cost reduction, supported

by weaker local currencies in some

jurisdictions, assisted us in achieving

positive free cash ﬂow for the last two years.

We will continue to target sustainable free

cash ﬂow generation, despite volatile gold

prices, by driving operational excellence and

disciplined capital investment across all the

operations. In addition, initiatives to optimise

working capital inﬂows such as the recovery

of slow remitted value-added taxation

rebates and offsetting of indirect taxes, will

continue to be pursued.

In accordance with the group’s strategy to

invest in low-capital, high-return brownﬁelds

opportunities, capital expenditure for 2017 is

guided at ~$200m higher than 2016 which

will impact free cash ﬂow generation. The

increase in capital expenditure primarily

relates to increased sustaining capital for the

Geita and Kibali underground development, a

power plant for Geita, stripping at Iduapriem,

ore reserve development in Brazil and on the

plant recovery improvement project at Sunrise

Dam in Australia. Project capital of $120m to

$150m primarily relates to the Siguiri hard rock

project and a power plant, Mponeng phase 1

and the Kibali hydro power plants. The Sadiola

Sulphides project investment decision is subject

to the negotiation of favourable ﬁscal and other

terms with the Malian governmental authorities.

In 2018 we expect the sustaining capital

expenditure to decline to a level between 2016

and 2017.

6. Reduce the annual interest bill and further

deleverage the balance sheet

The successful full redemption of the high-

yield bonds on 1 August 2016, further

assisted us in reducing our annual interest

bill as discussed earlier. This, in addition

to our continued free cash ﬂow generation

during 2016 allowed us to further de-lever

our balance sheet, reducing our net debt

to $1.916bn and our net debt to adjusted

EBITDA ratio to 1.24 times.

A C K N O W L E D G E M E N T

I continue to be supported by a strong and

diligent ﬁnance team across the group who,

through their proactive ﬁnancial planning, have

been able to mitigate some of the adverse

consequences relating to the challenging

global environment in which we operate. In

addition, we have been able to deliver quality

ﬁnancial information to our stakeholders that

reﬂects our objectives and values for long-term

success. I would like to thank our strong and

enthusiastic ﬁnancial team for their ongoing

support and look forward to the year ahead.

L O O K I N G A H E A D T O 2 0 1 7,
T H E K E Y F I N A N C I A L
O B J E C T I V E S A R E T O :

•

Maintain our focus on cost and capital

discipline to deliver competitive all-in

sustaining costs and all-in costs

•

Continue to enhance margins and

cash ﬂow through continuing focus on

operational efﬁciencies

•

Return to dividend paying status

underpinned by sustainable cash

generation

•

Move to a sustainable resolution

at Obuasi

•

Execute on low-capital, high-return

brownﬁelds projects, while continuing

to move long-term projects up the

value curve

•

Maintain ﬁnancial ﬂexibility and further

reduce our ﬁnance costs

Christine Ramon

Chief Financial Ofﬁcer

22 March 2017

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

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Strategy

Performance review

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Shareholder information

R E V I E W O F G R O U P ’ S P R O F I TA B I L I T Y, L I Q U I D I T Y A N D S TAT E M E N T O F F I N A N C I A L P O S I T I O N F O R 2 0 1 6

2016

2015

2014

Proﬁtability and returns

Adjusted headline earnings (loss)

(1)

143

(1)

US cents per share

Proﬁt (loss) attributable to equity shareholders

(85)

(58)

Return on net capital employed

(1)

Dividends declared per ordinary share

SA cents per share

130

–

US cents per share

~10

–

Liquidity, cash ﬂow and net debt

Net debt at year end

(1)

$bn

1.9

2.2

3.1

Free cash ﬂow

(1)

278

141

(112)

Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA)

(1)(3)

$bn

1.5

1.6

Net debt to Adjusted EBITDA

(1)(3)

Times

1.24

1.49

1.94

Operational metrics

Gold produced (from continued and discontinued operations)

Moz

3.63

3.95

4.44

Average price received

$/oz

1,249

1,158

1,264

Total cash costs

(1)

$/oz

744

712

785

All-in sustaining costs

(1)(2)

$/oz

986

910

1,020

All-in costs

(1)(2)

$/oz

1,071

1,001

1,114

All-in sustaining cost margin

(1)(2)

(1)

Non-GAAP measures

(2)

Excludes stockpile write-offs

(3)

The adjusted EBITDA calculation is based on the formula included in the revolving credit facility agreements for compliance with the debt covenant formula

F I N A N C I A L R E V I E W

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F I N A N C I A L R E V I E W

( C O N T I N U E D )

P R O F I TA B I L I T Y A N D R E T U R N S

Production of 3.628Moz, from continuing

operations, was within the original guidance for

the year ended 31 December 2016 at a total

cash cost of $744/oz, compared to production

of 3.830Moz, at a total cash cost of $712/oz for

the year ended 31 December 2015. Production

was negatively impacted by weaker production

from: the South African operations largely as a

result of safety-related stoppages; lower grades

from: Kibali; a planned decrease in head grades

at Tropicana and Geita; and Obuasi being in

care and maintenance for all of 2016. Offsetting

these negative impacts, Mponeng and Moab

Khotsong in South Africa delivered increased

production for the year together with Iduapriem

and Siguiri in the Continental Africa region, and

Sunrise Dam in Australia. Mponeng delivered

the largest improvement, with a 16% increase

in production and a 14% decrease in the all-in

sustaining cost year-on-year.

In the South African region, the decline

in production was mainly due to lower

underground tonnes mined and lower grades

over the period, with the most signiﬁcant

decrease at TauTona. The operational

performance for the year under review was

predominantly impacted by a range of safety-

related stoppages across all operations

resulting in an estimated loss of 104,000oz,

with TauTona, Moab Khotsong and Kopanang

most affected.

The Continental Africa region recorded a solid

performance despite no contribution from

Obuasi (currently under care and maintenance),

operational challenges encountered at Kibali

during the ﬁrst half of 2016 and planned lower

recovered grades at Geita, while Morila, nearing

closure, is now treating lower grade marginal

and tailings grade ore.

Production for 2016 in the Australasia region

was impacted by a lower contribution from

Tropicana, mainly due to the ﬁrst phase

of grade streaming coming to an end in

December 2015. However, the processing

plant throughput was higher for the period

following completion of the plant optimisation

project. Production at Sunrise Dam increased

due to higher mill throughput and an increase

in head grade as the large Dolly stope was

brought into production.

In the Americas region, production volumes

were mainly impacted by a lower year-on-year

contribution from Brazil, which faced production

challenges caused by geotechnical, licensing

and geological modelling issues. The mine plan

at AGA Mineração was revised accordingly;

delivering improved production which helped

offset the shortfall from the ﬁrst half of 2016. The

revised mine plan comprised the treatment of

additional ore from lower grade zones, partially

compensating the production gap with higher

tonnage treated. Serra Grande experienced

a delay in receiving permits required for the

open pit as well as the geotechnical challenges

at the ramp to access high-grade areas at

underground Mina Nova, in the Pequizao ore

body. Cerro Vanguardia in Argentina achieved

its highest annual production in 17 years due

to higher tonnes treated at the plant following

operational and metallurgical improvements,

partly offset by lower grades due to the variability

of the mining model.

The all-in sustaining cost came in at $986/oz,

up from $910/oz in 2015. The all-in sustaining

cost reﬂects the continued cost discipline and

weaker local currencies in some jurisdictions,

offset by an increase in sustaining capital

expenditure, inﬂation and exploration costs,

all against the backdrop of a 15% decline

in grade and safety-related stoppages in

South Africa, which led to lower year-on-year

production levels.

Earnings improved sharply in 2016 from the

previous year. Adjusted headline earnings

were up to $143m, or 35 cents per share,

compared with $49m, or 12 cents per

share in 2015. Net proﬁt attributable to

equity shareholders during 2016 was $63m

compared with a net loss from continuing

operations of $85m a year earlier. The

increase in earnings was primarily due to the

higher gold price received; weaker operating

currencies in Argentina, Brazil and South

Africa; continued focus on cost control;

interest saving; and a lower effective tax rate;

and was partially offset by reduced income

from associates and joint ventures.

LIQUIDITY, CASH FLOW AND STATEMENT OF

FINANCIAL POSITION

Adjusted EBITDA of $1,548m in 2016

increased by $76m, or 5% from the $1,472m

recorded in 2015. The adjusted EBITDA

margin expanded to 37.9% in 2016, from

36.7% in 2015. The ratio of net debt to

adjusted EBITDA at the end of December

2016 was 1.24 times compared with

1.49 times at the end of December 2015,

highlighting the success of AngloGold

Ashanti’s continued efforts to improve ﬁnancial

ﬂexibility as the current net debt to adjusted

EBITDA ratio falls in well below the covenant

ratio of 3.5 times which applies under our

revolving credit facility agreements.

Net debt fell by 13% to $1.916bn in 2016,

from $2.190bn at the end of 2015. On

1 August 2016, AngloGold Ashanti redeemed

the $503m outstanding on the high-yield

bonds due in 2020 by drawing down $330m

from the US dollar $1bn revolving credit facility

and the balance from cash on hand. The

redemption was executed with the purpose

of eliminating the group’s highest-cost

debt, and reducing both interest payments

and the concentration of debt maturities in

2020, while improving free cash ﬂow and

introducing additional balance-sheet ﬂexibility.

Management has since focused on paying

down existing revolving credit facilities at a

steady pace.

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F I N A N C I A L R E V I E W

( C O N T I N U E D )

The dividends declared for the year under

review of ~10 US cents per share, will result

in an estimated cash outﬂow in March and

April 2017 of $43m. We did not declare any

dividends for the 2015 year.

Turning to the statement of ﬁnancial position

and the ﬁnancing facilities available, the

group’s principal US dollar and Australian

dollar debt facilities are listed below:

•

Fully drawn rated bonds – $1.75bn in

aggregate – that mature in April 2020

($700m: 5.375%), August 2022 ($750m:

5.125%) and April 2040 ($300m: 6.5%)

•

$1bn syndicated revolving credit facility that

matures in July 2019, which is currently

$50m drawn

•

$100m revolving credit facilities that

mature in August 2019, which are currently

$40m drawn

•

A$500m revolving credit facility originally

earmarked for the construction of the

Tropicana project that matures in July 2019,

of which A$235m was drawn at year-end.

The facility was utilised during 2016 to

contribute to the redemption of the high-

yield bonds

•

R1.5bn South African revolving credit

facility that matures in December 2018, and

R1.4bn South African revolving credit facility

that matures in July 2019 – the two facilities

were R1.2bn drawn at year end

•

R500m overnight bank lending rate South

African demand facility, which is undrawn

We remain subject to an uncertain tax

environment. Across the group, we are

due refunds for input tax and fuel duties

for an amount of $199m (2015: $195m;

2014: $238m), including attributable amounts

of equity accounted joint ventures, which have

remained outstanding for periods longer than

those provided for in the respective statutes.

Considerable effort was made to reduce these

outstanding amounts. Disclosure of our taxation

exposures across the group further supports

the transparency of our taxation policy, where

we have adopted a low risk approach.

See also p144 for our tax strategy.

More detailed notes and analyses of the

group’s income statement, statement of

ﬁnancial position and statement of cash ﬂow

for 2016 are available in the group ﬁnancial

statements for 2016.

Picture:

Sunrise Dam, Australia

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F I V E - Y E A R S U M M A R I E S

SUMMARISED GROUP FINANCIAL RESULTS – INCOME STATEMENT

US dollar million

2016

2015

2014

2013

2012

Gold income

4,085

4,015

4,952

5,172

5,943

Cost of sales

(3,263)

(3,294)

(3,972)

(3,947)

(3,765)

Gain (loss) on non-hedge derivatives and other commodity contracts

(7)

(36)

Gross proﬁt

841

714

993

1,319

2,142

Corporate administration, marketing and other expenses

(61)

(78)

(92)

(201)

(288)

Exploration and evaluation costs

(133)

(132)

(142)

(250)

(390)

Other operating expenses

(110)

(96)

(28)

(19)

(47)

Special items

(42)

(71)

(260)

(2,951)

(402)

Operating proﬁt (loss)

495

337

471

(2,102)

1,015

Dividends received

–

Interest received

Exchange (loss) gain

(88)

(17)

(7)

Finance costs and unwinding of obligations

(180)

(245)

(276)

(293)

(228)

Fair value adjustments on convertible bonds

(17)

307

245

Share of equity-accounted investments’ proﬁt (loss)

(25)

(162)

(30)

Proﬁt (loss) before taxation

269

257

170

(2,192)

1,060

Taxation

(189)

(211)

(225)

237

(285)

Proﬁt (loss) after taxation from continuing operations

(55)

(1,955)

775

Discontinued operations

(Loss) proﬁt from discontinued operations

–

(116)

(245)

140

Proﬁt (loss) for the year

(70)

(39)

(2,200)

915

Allocated as follows:

Equity shareholders

– Continuing operations

(74)

(1,985)

757

– Discontinued operations

–

(116)

(245)

140

Non-controlling interests

– Continuing operations

(70)

(39)

(2,200)

915

F I N A N C I A L R E V I E W

( C O N T I N U E D )

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SUMMARISED GROUP FINANCIAL RESULTS – STATEMENT OF FINANCIAL POSITION

US dollar million

2016

2015

2014

2013

2012

Assets

Tangible and intangible assets

4,256

4,219

5,088

5,082

8,091

Investments

1,578

1,557

1,553

1,459

1,215

Inventories

756

736

1,524

1,639

1,823

Cash and cash equivalents

215

484

468

648

892

Other assets

348

288

501

846

718

Total assets

7,153

7,284

9,134

9,674

12,739

Equity and liabilities

Total equity

2,754

2,467

2,871

3,107

5,494

Borrowings

2,178

2,737

3,721

3,891

3,583

Provisions

995

954

1,199

1,115

1,459

Deferred taxation

496

514

567

579

1,084

Other liabilities

730

612

776

982

1,119

Total equity and liabilities

7,153

7,284

9,134

9,674

12,739

F I N A N C I A L R E V I E W

( C O N T I N U E D )

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SUMMARISED GROUP FINANCIAL RESULTS – STATEMENT OF CASH FLOWS

US dollar million

2016

2015

2014

2013

2012

Cash ﬂows from operating activities

Cash generated from operations

1,302

1,250

1,343

1,307

2,178

Dividends received from joint ventures

–

Net taxation paid

(153)

(163)

(153)

(164)

(453)

Net cash inﬂow from operating activities from continuing operations

1,186

1,144

1,190

1,161

1,797

Net cash (outﬂow) inﬂow from discontinued operations

–

(5)

172

Net cash inﬂow from operating activities

1,186

1,139

1,220

1,246

1,969

Cash ﬂows from investing activities

Capital expenditure

(711)

(667)

(849)

(1,431)

(1,916)

Net (payments) proceeds from acquisition and disposal of subsidiaries, associates and joint ventures

(1)

(12)

(466)

(684)

Net (payments) proceeds from disposal and acquisition of investments, associate loans, and
acquisition and disposal of tangible assets

(12)

810

(11)

(8)

(70)

Interest received

Decrease (increase) in cash restricted for use

(17)

(20)

(3)

Other

–

(50)

Net cash (outﬂow) inﬂow from investing activities from continuing operations

(702)

139

(773)

(1,902)

(2,687)

Cash outﬂows from discontinued operations

–

(59)

(170)

(138)

(88)

Net cash (outﬂow) inﬂow from investing activities

(702)

(943)

(2,040)

(2,775)

Cash ﬂows from ﬁnancing activities

Net (repayments) proceeds from borrowings

(546)

(867)

(144)

864

1,221

Finance costs paid

(172)

(251)

(246)

(200)

(145)

Dividends paid

(15)

(5)

(17)

(62)

(236)

Acquisition of non-controlling interest

–

(215)

Other

(30)

(61)

(9)

(36)

(28)

Net cash (outﬂow) inﬂow from ﬁnancing activities from continuing operations

(763)

(1,184)

(416)

566

597

Cash outﬂows from discontinued operations

–

(2)

(5)

(6)

Net (outﬂow) inﬂow from ﬁnancing activities

(763)

(1,186)

(421)

560

591

Net (decrease) increase in cash and cash equivalents

(279)

(144)

(234)

(215)

Translation

(17)

(16)

(30)

(5)

Cash and cash equivalents at beginning of year

484

468

628

892

1,112

Cash and cash equivalents at end of year

(1)

215

484

468

628

892

(1)

The cash and cash equivalent balance at 31 December 2013 includes a bank overdraft included in the statement of ﬁnancial position as part of other liabilities of $20m.

F I N A N C I A L R E V I E W

( C O N T I N U E D )

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RATIOS AND STATISTICS

Units

2016

2015

2014

2013

2012

Operating review – gold

Production from continuing operations

000oz

3,628

3,830

4,225

3,874

3,697

Production from continuing and discontinued operations

000oz

3,628

3,947

4,436

4,105

3,944

Gold sold from continuing operations

000oz

3,590

3,850

4,248

3,862

3,707

Gold sold from continuing and discontinued operations

000oz

3,590

3,965

4,458

4,093

3,953

Continuing operations

Closing spot price at year-end

$/oz

1,247

1,160

1,266

1,411

1,668

Average gold price received

$/oz

1,249

1,158

1,264

1,401

1,664

Total cash costs

$/oz

744

712

785

836

842

All-in sustaining costs

(1)

$/oz

986

910

1,020

1,195

1,285

All-in costs

(1)

$/oz

1,071

1,001

1,114

1,466

1,623

Earnings

Gross proﬁt

841

714

993

1,319

2,142

Gross margin

Adjusted EBITDA

(2)

1,548

1,472

1,616

1,525

2,486

Adjusted EBITDA margin

Interest cover

times

Asset and debt management

Net debt to adjusted EBITDA

(2)

times

1.2

1.5

1.9

2.0

0.8

Continuing and discontinued operations

Proﬁt (loss) attributable to equity shareholders

(85)

(58)

(2,230)

897

Proﬁt (loss) attributable to equity shareholders

US cents

(21)

(14)

(568)

232

Headline earnings (loss)

111

(73)

(79)

1,208

Headline earnings (loss)

US cents

(18)

(19)

312

Adjusted headline earnings (loss)

143

(1)

599

988

Adjusted headline earnings (loss)

US cents

(0)

153

255

Capital expenditure

(3)

811

857

1,209

1,993

2,322

Net cash inﬂow from operating activities

1,186

1,139

1,220

1,246

1,969

Free cash inﬂow (outﬂow)

278

141

(112)

(1,064)

(666)

F I N A N C I A L R E V I E W

( C O N T I N U E D )

See footnotes overleaf

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F I N A N C I A L R E V I E W

( C O N T I N U E D )

Units

2016

2015

2014

2013

2012

Asset and debt management

Equity

2,754

2,467

2,871

3,107

6,082

Net capital employed

5,101

5,190

6,640

5,519

8,420

Net debt

1,916

2,190

3,133

3,105

2,061

Net asset value – per share

US cents

675

609

711

770

1,580

Market capitalisation

4,290

2,877

3,515

4,727

12,025

Return on net capital employed

Net debt to equity

109

100

Other

Weighted average number of shares

million

413

410

408

393

387

Issued shares at year-end

million

408

405

404

403

385

Exchange rates

Rand/dollar average

14.68

12.77

10.83

9.62

8.20

Rand/dollar closing

13.73

15.46

11.57

10.45

8.45

Australian dollar/dollar average

1.35

1.33

1.11

1.03

0.97

Australian dollar/dollar closing

1.39

1.37

1.22

1.12

0.96

Brazilian real/dollar average

3.48

3.33

2.35

2.16

1.95

Brazilian real/dollar closing

3.26

3.90

2.66

2.34

2.05

Argentinean peso/dollar average

14.78

9.26

8.12

5.48

4.55

Argentinean peso/dollar closing

15.89

12.96

8.55

6.52

4.92

(1)

World Gold Council standard, excludes stockpile write-offs.

(2)

The adjusted EBITDA calculation is based on the formula included in the revolving credit facility agreements for compliance with the debt covenant formula.

(3)

Includes attributable share of equity-accounted investments.

RATIOS AND STATISTICS

(continued)

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E C O N O M I C V A L U E - A D D E D S T A T E M E N T

F o r t h e y e a r e n d e d 3 1 D e c e m b e r

US dollar millions

2016

2015

Economic value generated

Gold sales and by-product income

(1)

4,223

4,280

Interest received

Royalties received

–

Proﬁt from sale of assets

–

Net income from investments

–

Total economic value generated

100

4,263

100

4,377

Economic value distributed

Operating costs

(2)

1,876

Employee salaries, wages and other beneﬁts

(3)

1,095

1,183

Payments to providers of capital

– Finance costs and unwinding of obligations

180

245

Corporate taxation

– Current taxation

(4)

234

192

Community and social investments

(5)

–

Total economic value distributed

3,408

3,510

Economic value retained

(6)

855

867

(1)

Gold income from continuing operations increased
by 2% as a result of an 8% increase in the gold price
received to $1,249/oz in 2016.

(2)

Operating cost includes items classiﬁed as part of
cost of sales; corporate administration, marketing and
other expenses; exploration and evaluation costs;
other operating expenses; and exchange gains and
losses – per the income statement. It also includes
indirect tax (recoveries) costs; legal fees (recoveries)
and other costs related to contract terminations and
settlement costs; and retrenchment and related
costs – reported as part of special items in the income
statement. Items classiﬁed as part of cost of sales
include production services and materials; royalties
and other production taxes; skills development levies
and property taxes; but exclude amortisation of
tangible and intangible assets; by-product revenue;
employee salaries, wages and other beneﬁts and
community and social investments.

(3)

Employee salaries, wages and other beneﬁts include
all payroll related taxes paid in all jurisdictions in
which the group operates.

(4)

Current taxation includes normal taxation and

withholding taxation on dividends paid per
jurisdiction in which the group operates. The
breakdown of taxation per country is as follows:

US dollar millions

2016

2015

South Africa

(2)

(13)

Argentina

Australia

Brazil

Ghana

–

Guinea

United States

(7)

(6)

Tanzania

Other

(5)

Community and social investments exclude
expenditure by equity-accounted joint ventures.

(6)

Economic value retained excludes impairments
and impairment reversals. The economic value
retained relates to current year earnings.

For detailed information on physical cash payments paid to governments (including all corporate and employee taxes, permits, applications and

dividends), refer to the regional reviews.

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A n g l o G o l d A s h a n t i ’s f o u r S o u t h

A f r i c a n d e e p - l e v e l m i n e s a n d

s u r f a c e p r o d u c t i o n f a c i l i t i e s

a r e d i v i d e d i n t o t h r e e m i n i n g

e n t i t i e s – Va a l R i v e r, We s t W i t s

a n d S u r f a c e O p e r a t i o n s – w h i c h

c o m p r i s e t h e f o l l o w i n g o p e r a t i o n s :

VA A L R I V E R

The two Vaal River mining operations, which

share a milling and treatment circuit and are

located around 180km from Johannesburg,

near the Vaal River, on the Free State-North

West Province border, are:

•

Kopanang

, which is bound to the south by

the Jersey Fault, has a single shaft system

to a depth of 2,334m. It exploits the Vaal

Reef almost exclusively, producing gold as

its primary output and uranium oxide as a

by-product.

•

Moab Khotsong

, AngloGold Ashanti’s

newest South African mine, is located

in the Free State and has a single shaft

system mining to a depth of 3,100m.

Given the geological complexity of the Vaal

Reef, the mine’s principal reef, scattered

mining is employed. Great Noligwa’s

operating infrastructure and employees

have been incorporated into Moab

Khotsong since 2015.

W E S T W I T S

The West Wits mining district’s operations,

situated south-west of Johannesburg, on the

border between Gauteng and North West

Province, are:

•

Mponeng

, the world’s deepest gold mine

and our ﬂagship South African operation,

exploits the Ventersdorp Contact Reef

(VCR) via a twin-shaft system at depths

of between 2,800m and 3,400m below

surface. Ore is treated and smelted at the

mine’s gold plant.

•

TauTona

, with a three-shaft system, exploits

the Carbon Leader Reef (CLR) predominantly

and the VCR on a small scale through

technology, with secondary and tertiary

shafts sinking to depths of between 2,700m

and 3,300m below surface. Following the

full integration of Savuka into TauTona’s

infrastructure in 2015, mining of Savuka’s

remaining Ore Reserve continues. To

further improve efﬁciencies and beneﬁt from

economies of scale, ore mined at TauTona is

processed at Mponeng’s gold plant.

S U R FA C E O P E R AT I O N S

Surface Operations encompasses those

facilities at the Vaal River and West Wits

operations which process and extract

gold from:

•

marginal ore dumps on surface

•

tailings storage facilities on surface

Surface Operations also includes Mine

Waste Solutions (MWS), which operates

independently, processing slurry material

reclaimed hydraulically from the various tailings

storage facilities. Uranium is produced as a

by-product, as is backﬁll for use as mining

support in underground mined out areas.

R E G I O N A L R E V I E W S

U R A N I U M

The uranium by-product is produced as

oxide concentrates (U

) in the form of a

powder extracted from gold-bearing ore.

It is then processed into a ‘yellow cake’

material that is transported in special-

purpose secure road tankers from the

mine to the Nuclear Fuels Corporation of

South Africa (Nufcor) for further ﬁltration

and calcining, resulting in uranium

diuranate (in slurry form). The ﬁnal product

is shipped to Nufcor’s major customers:

nuclear electricity generating utilities

around the world. Nufcor is a wholly-

owned subsidiary of AngloGold Ashanti

and is arguably the world’s longest

continuous producer and marketer of

uranium. Uranium makes a small but

valuable contribution to AngloGold

Ashanti’s bottom line.

CONTRIBUTION TO
REGIONAL PRODUCTION

(excluding technology)

•

West Wits

•

Vaal River

•

Surface Operations

CONTRIBUTION TO
GROUP PRODUCTION

•

South Africa

•

Rest of AngloGold

Ashanti

S o u t h A f r i c a

I N T E G R AT E D R E P O RT

2 0 1 6

MAP

SOUTH AFRICAN
OPERATIONS

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

KEY STATISTICS

Units

2016

2015

2014

Operational performance

Tonnes treated/milled

39.6

36.8

38.4

Pay limit

(1)

oz/t

0.37

0.39

g/t

13.81

14.38

14.35

Recovered grade

(1)

oz/t

0.219

0.225

0.239

g/t

7.51

7.70

8.19

Gold production

000oz

967

1,004

1,223

Total cash costs

$/oz

896

881

849

Total production costs

$/oz

1,089

1,091

1,087

All-in sustaining costs

(2)

$/oz

1,081

1,088

1,064

Capital expenditure

182

206

264

Productivity

oz/TEC

3.56

3.74

4.40

Safety

Number of fatalities

AIFR

per million hours worked

12.02

10.81

11.85

People

Average no. of employees: total

28,507

28,325

29,511

– Permanent employees

25,205

25,274

26,056

– Contractors

3,302

3,051

3,455

Training and development expenditure

See footnotes overleaf

PRODUCTION

(000oz)

1,212

1,302

1,223

1,004

967

PRODUCTIVITY

(oz/TEC)

4.19

4.47

4.40

3.74

3.56

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Units

2016

2015

2014

Environment

Total water consumption

23,161

25,182

27,219

Total water use per tonne treated

kL/t

0.586

0.685

0.708

Total energy usage

10.54

10.65

11.30

Total energy usage per tonne treated

GJ/t

0.27

0.29

Total GHG emissions

000t CO

2,864

2,756

2,981

Total GHG emissions per tonne treated

t CO

e/t

0.073

0.075

0.078

Cyanide used

9,672

9,573

10,100

No. of reportable environmental incidents

Total rehabilitation liabilities:

– restoration

– decommissioning

Community and government

Community expenditure

(3)

Payments to government

106

105

144

– Taxation

–

– Withholding tax (royalties, etc.)

– Employee taxes and other contributions

100

– Property tax

– Other (includes skills development)

(1)

Refers to underground operations only.

(2)

Excludes stockpile write-offs.

(3)

Includes corporate social investment expenditure.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

KEY STATISTICS

(continued)

AIFR

(per million hours worked)

13.24

12.63

11.85

10.81

12.02

TOTAL CASH COSTS AND
ALL-IN SUSTAINING COSTS

($/oz)

873

1,189

850

1,120

849

1,064

Total cash costs

All-in sustaining costs

881

1,088

896

1,081

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

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Strategy

Performance review

Accountability

Shareholder information

O P E R AT I O N A L P E R F O R M A N C E

PRODUCTION

Production from the South Africa region was

4% down on 2015 due to the lower volumes

mined, a result of safety-related stoppages,

reduced levels of productivity and a decline in

underground yield. The most signiﬁcant grade

decline was at TauTona. Overall, production

lost by the South Africa region due to safety

stoppages was 104,000oz in 2016, mostly at

Kopanang, Moab Khotsong and TauTona. To

mitigate these disruptions, implementation of

our four-pillar safety strategy continues.

At West Wits Mponeng delivered the best

performance in the region, with a 16% year-

on-year improvement in production following

the successful implementation of the so-called

‘de-risk plan’, which effectively called for the

withdrawal from certain mining areas where

analysis showed elevated risk levels, and

the establishment of critical infrastructure to

support the ramp up in production from the

below 120 level project area. Although mining

of the higher grade areas declined, Mponeng’s

production was augmented by high-quality

mining practices and an improved mining

mix. There were also fewer safety-related

disruptions at Mponeng in 2016 compared to

the previous year.

TauTona’s production was negatively affected

by several incidents. A gravity-induced fall-

of-ground fatality early in the ﬁrst quarter

of the year halted development work in the

affected section for most of the quarter while

work was completed to modify and enhance

the secondary support standards at all

development ends.

A signiﬁcant seismic event in the Savuka

section in April 2016, which caused two

fatalities, led to the subsequent suspension

of production in most of that section and

the level 116 haulage (the access way to

two new raise lines), which is expected to

remain inaccessible until about the second

quarter of 2017, if at all. In addition, a fatal

underground locomotive accident in the

third quarter resulted in the suspension of

operations for a prolonged period while

steps were taken to improve procedures and

ensure safe working conditions.

Production at the Vaal River operations

remained largely unchanged at 371,000oz.

A 10% year-on-year increase in production

from Moab Khotsong offset the decline at

Kopanang. At Moab Khotsong, increased

production was driven by higher volumes

mined, additional face length availability, a 5%

increase in the mine call factor (MCF) and the

higher underground grade mined during the year.

However, production was hampered by

safety-related stoppages in the second quarter

of the year and decreased production from

Kopanang, a result of lower volumes and a

6% decrease in grade mined. Lower volumes

mined were attributed to reduced efﬁciencies

given that mining is largely conducted at the

extremities of the operation, causing signiﬁcant

travel times to production areas. To mitigate

this, the mining cycle has been modiﬁed to

allow for more efﬁcient use of the limited face

time available. The decline in underground

grade was expected as the mining fronts move

towards the lower grade western areas.

While tonnage throughput for the year

increased by 7% at Surface Operations,

lower feed grades and recoveries resulted

in decreased production year-on-year.

Optimisation of the plant circuit to improve

recoveries continued. Recommissioning of the

uranium plant began in the third quarter with

uranium production recommencing in August.

As stockpiles of high-grade, hard-rock material

were depleted during the year, processing of

lower-grade tailings increased, contributing

to the decline in feed grades. This posed

signiﬁcant challenges to the operation. As

mitigation, a blending strategy was initiated

and in an effort to optimise the ratio of

marginal ore dump and tailings material at

the plant, and to mitigate the lower than

anticipated grade fed into the Savuka plant.

Additionally, a project was launched to screen

and truck marginal ore from Moab Khotsong

to further improve the grades.

COSTS

The focus at all the South African operations

was on identifying projects to both rationalise

off-mine costs and drive on-mine efﬁciencies.

The consolidation of the region’s operations

into three operating entities, to eliminate any

duplication of services and management,

is now complete. Additionally, Project 500

beneﬁts have helped mitigate the impact of

lower production on costs and grade, and

had a positive impact on free cash ﬂow.

In 2017, the focus will be on implementing

a global shared-services centre (GSSC)

for ﬁnance and procurement disciplines to

enable the region to beneﬁt from improved

administrative, ﬁnancial, process and

purchasing efﬁciencies. A review of all the

region’s commodity and services contracts to

re-align contract costs with market dynamics

and fair value pricing has identiﬁed a possible

value-add of approximately R600m. The

GSSC is currently reviewing the realisation

of this value which will assist the region in

reducing its cash costs.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

GROWTH AND IMPROVEMENT

Mponeng

Phase 1 of Mponeng’s below 120 level

project is in its production build-up phase.

Infrastructure development on 123 level

progressed according to schedule with four

raise lines holed during the year. Construction

of capital infrastructure, execution of Ore

Reserve development and logistical efﬁciency

improvements all proceeded as planned.

Ramp up to steady-state Ore Reserve

development is expected to begin in the

second half of 2017, once ore handling

infrastructure has been commissioned.

The Mponeng life-of-mine extension project will

be advanced to feasibility stage with the related

study scheduled to be completed by mid-

2018. This follows concept and prefeasibility

studies on a CLR extension project that were

undertaken during 2016, the results of which

were presented to the board early in 2017.

Critical path activities will continue on the

project throughout 2017.

The project design intends to establish a sub-

vertical shaft extension to access the majority

of the CLR and VCR ounces (excluding phase

1) below the current 120 level through to a

single common infrastructure. This contrasts

the phased approach previously envisaged to

access the ore body via a series of ramp and

decline extensions with independent focus on

each of the ore bodies. Most of the revised

approach to phase 2 includes ramp up of

development and other preparatory work for

shaft sinking and access development. This

phase of the project is expected to access six

levels on the CLR and four levels on the VCR by

means of a vertical shaft extension.

Phase 2 commissioning of the surface

substation was completed by Eskom at the end

of 2016 and other activities continued, including

equipping of the inter-level ice hole, construction

of the 116 level substation and the water

handling infrastructure complex on 121 level.

Zaaiplaats

Initial development of project Zaaiplaats at

Moab Khotsong was undertaken to facilitate

exploitation of additional ore blocks adjacent

and contiguous to current mining areas. The

most important are the lower mine blocks

(Zaaiplaats and areas A, B and C), located

southwest of current mine infrastructure and

extending below the existing mine. Over the

past few years, the decline in the gold price,

together with changes in key parameters

and economic assumptions, reduced the

economic viability of this project and it was

placed on hold. While Zaaiplaats is included

in Moab Khotsong’s life-of-mine plan and Ore

Reserve base, it is currently the subject of a

prefeasibility study that seeks to improve its

investment case.

CAPITAL EXPENDITURE

Overall, capital expenditure in the region

declined by 12% year-on-year due to a

decline in the value of the rand. Capital

expenditure in rand terms remained in line

with last year, due to the sustained focus on

capital discipline, efﬁcient project delivery and

delays caused by safety-related stoppages.

However, project capital increased following

approval of additional capital for phase 2 and

in alignment with the decision to maintain

the critical path infrastructure schedule with

the revised feasibility study for the Mponeng

life-of-mine extension project scheduled to be

concluded by mid-2018.

S U S TA I N A B I L I T Y P E R F O R M A N C E

PEOPLE

Safety

At AngloGold Ashanti, the safety of every

employee remains the highest priority. It is a

commitment we will continue to demonstrate

across our global portfolio, including the world’s

deepest mines we operate in South Africa.

Over the past decade, AngloGold Ashanti has

reduced operating fatalities by more than 80%

and improved the all injury frequency rate (AIFR),

the broadest measure of workplace safety, by

more than two thirds. We will not relent in our

endeavours to prevent harm to employees.

Improvements in the past decade are due

to a focus on improved operating and safety

systems as well as technologies, and an

emphasis on ensuring that every person in the

company is keenly aware of identifying and

avoiding risk. In an environment where minor

missteps can have catastrophic consequences,

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

Picture:

Moab Khotsong, South Africa

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

it is critical that we not only relentlessly identify

and eliminate hazards but that we instill a

culture that prizes safety above all else. We

have made encouraging strides in this regard

and will continue to seek improvements.

Given the safety challenges faced by the region,

the AIFR was 12.02 per million hours worked

for the year ended December 2016 compared

to 10.81 per million hours worked in 2015.

Regrettably, six fatalities occurred in the South

Africa region in 2016. Two of these occurred

at TauTona and two at the Savuka section

following fall-of-ground and tramming incidents

in which Messrs. Joseph R Khalla, Nkoseﬁkile

Melitafa, Tlelaka Bernard Ntisa and Tumelo J

Qamele lost their lives. A further two fatalities

occurred following falls-of-ground related

incidents, in which Leronti N Mahlakeng at

Mponeng and Ramphoko Dominika Chere

at Kopanang lost their lives. We extend our

condolences to the families, colleagues,

friends and communities of the departed.

Despite safety incidents, 2016 delivered the

second best safety performance in our history

with respect to fatal accidents and the fourth

quarter of the year was fatality free. At year

end, the South Africa region had recorded

158 fatality-free days. While this demonstrates

some success in the implementation of our

safety strategy, we remain vigilant to ensure

that we continue to make gains in this most

important area.

Mitigation measures are in place to avoid

recurrences and to eliminate disruptions.

Our safe production strategy focuses on

developing a business culture that, in the

short term, delivers predictable control of

safe production through a highly effective

and compliant organisation, led by an

interdependent and pro-active leadership

team striving over the long term to deliver

an interdependent and resilient organisation.

Our four safety pillars, the ‘strategy enablers’,

are knowledge and skills, behaviour and

attitude, planning work and removing people

from risk. This safe production strategy has

been coupled with greater use of the latest

technologies to monitor and mitigate risk.

Signiﬁcant safety milestones recorded during

the year include one million fatality free shifts at

Mponeng, Kopanang, Moab Khotsong and the

Regional Services Department, and two million

fatality-free shifts for the Vaal River as a whole.

Moab Khotsong achieved a full calendar year

without a fatality in September, and Surface

Operations achieved a full year with no lost-

time injury. The Savuka gold plant won South

Africa’s coveted JT Ryan Award for operating

without a fatality since 1961.

At AngloGold Ashanti, we value close co-

operation with all role players in the mining

industry, including our employees and partners

in organised labour, as well as the regulator,

the DMR. We believe it is crucial to the well-

being of every employee that this relationship

is not only professional and respectful but also

tightly bound by the laws and regulations that

govern the industry.

We continue to seek dialogue with the DMR at

every level with the primary aim of improving

safety and ensuring fair and proportional

application of safety legislation. Where there

is disagreement, we will continue as always

to use the proper appeal mechanisms and

legal remedies available under the Mine Health

and Safety Act and associated legislation. We

believe that, with close co-operation among

stakeholders and fair application of regulations

with due regard to proportionality, as well

as continued vigilance in an unpredictable

operating environment, we can further improve

on the safety gains made in the past decade.

Employee engagement

The South Africa region, introduced a new

operating model that is aimed at laying the

foundation for a sustainable future for the

region by optimising shorter-life operations

and ensuring optimal cost structures that will

allow the longer-life operations to deliver the

appropriate returns. This process is expected

to run over the next ﬁve to seven years. In line

with continuous employee engagement, we

are managing this process through the plenary

– a forum at which management and our

employees’ organised labour representatives

meet to discuss actions to give effect to the

employee transition framework. Through this

process, employees will be affected either

through transfers, contracting of some non-

core functions, or redundancy. We also use

the joint management and organised labour

future forum to meet our regulatory obligations

in line with our social and labour plans. Each

operating unit has a labour management

committee in place to implement the decisions

taken at plenary and future forum sessions.

Plenary sessions were held during the year, with

the Chief Operating Ofﬁcer: South Africa brieﬁng

all management employees and engaging with

executives of organised labour. The transfer of

identiﬁed ﬁnance and supply chain employees

to the new Global Shared Services department

also started during the year.

The number of employees in the South Africa

region increased from 28,325 in January

2016 to 28,507 at year end. This increase

is as a result of the re-instatement of the

Moab Khotsong employees who are AMCU

members, following the Labour Court ruling at

the end of 2015.

Employee indebtedness

Indebtedness remains a source of profound

stress for many South African mine workers

who support extended families. Our

Masidibanise Izandla – ‘Let’s join hands:

Managing today, for tomorrow, together’

– programme continues to address this

challenge by providing accessible ﬁnancial

management assistance. During 2016, the

following was achieved:

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

I N T E G R AT E D R E P O RT

2 0 1 6

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Performance review

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Shareholder information

•

The number of emolument attachment

orders decreased by a further 34%

(amounting to employee debt reduction of

approximately R2.2 million). These orders

were terminated resulting in employees

being debt free

•

15,103 employees attended ﬁnancial

awareness training

•

Termination of the emolument attachment

orders for 43 employees were approved

•

Continuing discussions with a third party

on termination of the pay ﬁle system had a

positive outcome, with employees having

more than one loan with a third party being

identiﬁed. After a series of meetings, the

third party agreed to terminate and write-off

loans totalling R712,000 for 77 employees

Labour relations

The South African mining industry, particularly

the gold sector, experienced relative peace

and stability with regard to labour relations in

2016. The three-year wage agreement signed

in 2015 remains in force until 2018. During the

year, AngloGold Ashanti continued to engage

all unions to ensure that obligations of the

agreement are implemented. Work emanating

from the wage negotiations included:

•

A retirement task team recommended that

the current retirement age of 60 years for

gold miners, underground artisans and

underground ofﬁcials be retained. These

employees will have the option to extend

their retirement age to 63 years, should

they comply with certain conditions,

such as passing a company medical

examination and work ﬁtness assessments

as and when required

•

In co-operation with unions, initiatives are

in place to promote business sustainability

and to make progress on social issues.

These initiatives include ways to enhance

operational efﬁciency, alternative work

and shift arrangements, addressing

indebtedness and home ownership

•

An expert was appointed to conduct an

investigation and report to stakeholders

on the extent of the current organisation

design in the gold sector in relation to the

applicable grading system

During the year, there was no loss of

production due to strike action in the region.

AngloGold Ashanti has a constructive

and robust relationship with all organised

labour unions, including the Association of

Mineworkers and Construction Union (AMCU),

the National Union of Mineworkers (NUM),

Solidarity and UASA.

All unions participated fully in the various

statutory and ad hoc committees at which

employee related issues were deliberated,

as well as in the plenary sessions to discuss

implementation of key processes of the

employee transition framework.

On 21 February of 2017, the Constitutional

Court ruled in favour of South Africa’s gold

producers’ ability to extend wage agreements

to AMCU and its members in terms of Section

23(1)(d) of the Labour Relations Act. This was

AMCU’s ﬁnal opportunity to appeal this verdict,

originally passed down by the Labour Court.

The ruling reinforces one of the primary tenets

of collective bargaining, in that agreements by

the majority of employees win the day. It also in

effect conﬁrms that employees are employed

by the company, i.e. AngloGold Ashanti, and

not by their individual workplaces, for example,

Mponeng mine.

Employment equity and transformation

The South African mining industry remains fully

committed to realising the vision of the National

Development Plan and to transformation that

sustains and supports the industry, and does

not undermine the goals of the MPRDA. All

key targets were met by Chamber of Mines’

members (including AngloGold Ashanti) in terms

of the Mining Charter.

AngloGold Ashanti complies fully with regulatory

obligations monitored by both the Departments

of Labour and Mineral Resources.

The year-on-year representation of historically

disadvantaged South African (HDSA) across

all occupational levels increased by 1.5%, with

HDSA recruitment increasing by 11% in 2016.

We continue to intensify the employment

equity implementation process, particularly

at management level through, among others,

talent management and the development of

senior management.

Processes to accelerate opportunities for,

and to retain, HDSA employees are in place.

Progress will be monitored to ensure the

desired results are achieved. Oversight of the

employment equity process is undertaken by

the Transformation Steering Committee and

driven by the region’s management.

HEALTH

Employee wellness

The gold mining industry faces a variety of health

challenges and workplace risks, largely due

to the nature of ultra-deep, hard-rock, labour-

intensive mining that is compounded by the

relatively high incidence of certain diseases in

southern Africa. A high-level risk assessment

(covering contributory causes, consequences

and critical controls) of the health risks in the

region has been incorporated into the company’s

‘health risk architecture’. All health risks in

the region have been placed into 10 major

categories, prioritising the top 12 speciﬁc injuries

and illnesses that present the greatest health

risks to employees. Given the long lag periods

associated with most occupational health risks,

we aim to review medical risks every two years

or more frequently if required.

With increasing national and regional attention

given to tuberculosis (TB) across the Southern

African Development Community (SADC),

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

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the South African Departments of Health

and Mineral Resources launched a major

TB screening programme across the mining

sector: Masoyise iTB (‘Let’s beat TB’). This

campaign aims to screen 500,000 miners

for TB annually over the next three years. In

2016, AngloGold Ashanti completed some

27,000 assessments, mobile digital X-rays

and symptom screening, which indicate

that occupational TB rates of 1.02% within

AngloGold Ashanti are gradually declining

toward national incidence rates estimated at

approximately 0.85%.

Healthcare outcomes

The all occupational diseases frequency rate

(AODFR) decreased to 7.18 per million hours

worked in 2016 (2015: 12.11) The AODFR

includes silicosis, occupational TB, noise-

induced hearing loss (NIHL), barotrauma

(pressure-related injury to the middle ear

following rapid descent/ascent in deep level

mines) and all heat-related illnesses. In all,

823 cases of occupational disease were

reported during 2016 (71 cases of NIHL;

285 of occupational TB; 120 of heat illness;

216 of barotrauma; and 131 of silicosis).

New TB and HIV rates remain at 10-year lows.

Sick leave rates remain stubbornly high in

a working population with high incidence of

chronic disease.

Dust control measures continued to be

effective and our South African operations

exceeded the Mine Health and Safety Council

milestones for dust control. The number of

silicosis cases submitted for compensation

declined for another year and early silicosis

cases remain at historically low levels.

Gold working group on silicosis

The industry Working Group on Occupational

Lung Disease (OLD), which includes

AngloGold Ashanti, has held extensive

meetings over the past two years with the

lawyers of claimants in a proposed class

action law suit and key stakeholders in

government, labour and industry. The working

group’s objective is to work with all the relevant

key stakeholders to develop a comprehensive

solution to silicosis, related litigation and

statutory compensation. The working group

has been actively involved in a collaborative

initiative to explore the legislative reforms

required to ensure improved compensation

beneﬁts for all employees and ex-employees

with OLD. In October 2016, the Integration

of Compensation Steering Committee, which

includes members of the working group,

met with the ministers of Health and Labour,

as well as the Deputy Minister of Mineral

Resources, to present a report on integration

of compensation and recommendations for

the next steps to be considered to advance

legislative reforms.

Substantive engagements aimed at reaching

settlement have been held with the attorneys

representing the class action claimants. In

November 2016, the working group was also

invited to attend a SADC ministers of health

meeting in Swaziland and an outreach by

the Department of Health and the Swaziland

Ex-miners Association to former mineworkers

with OLD.

The working group continues to assist the

Medical Bureau for Occupational Diseases

(MBOD) and Compensation Commissioner

for Occupational Diseases (CCOD), which

are government departments responsible

for certiﬁcation and compensation of

mineworkers with OLD, in terms of the

Occupational Diseases in Mines and Works

Act (ODMWA), to: determine the ﬁnancial

viability of the ODMWA Fund; address the

signiﬁcant backlog in past claims; improve

ongoing processing and payment of claims

(the MBOD/CCOD Assistance Project); track

and trace former mineworkers; and develop

a comprehensive database of current and

former mineworkers.

Also see People are our business for

background on the work done by the Working

Group and for updates around the class action

law suit.

Total health spend

In 2016, R720 million was spent on health

and wellness programmes in the region, R380

million spent on clinics and hospitals through

AngloGold Ashanti Health, and the rest on

various medical insurance and compensation

costs for occupational and non-occupational

injuries and illnesses affecting our employees.

Many mining companies have closed their

mine hospitals and now outsource hospital

care in the private sector. At AngloGold

Ashanti, a high-level strategy to outsource

health services in a phased approach over a

ﬁve-year period is under discussion and has

been presented to organised labour through

the employee engagement forum. Phase

1 will focus on the sale or closure of some

hospital and pharmacy businesses, and the

decentralisation of primary and occupational

healthcare services to the mines.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

ENVIRONMENT

Environmental performance

The South Africa region continued to

improve its environmental performance.

The number of reportable environmental

incidents for the year declined to zero, from

1 in 2015. Environmental risks remain fully

incorporated in the company’s business

risk management process, operational

environmental management systems and

regulatory obligations. Surface Operations,

including MWS, retained its ISO 14001

certiﬁcation in 2016 and alignment with the

revised 2015 international standard has

begun. The new ISO 14001 standard requires

greater focus on the organisation’s strategic

planning processes, leadership, improving

environmental performance, life-cycle

planning and a more speciﬁc communications

strategy. Considering that environmental

aspects are already part of AngloGold Ashanti

strategic planning and business management

processes, we do not foresee any major

challenges in aligning and converting to the

new standard. It is anticipated that the region

will be aligned and certiﬁed in terms of the

new standard by early 2018.

Some of the most noticeable improvement

initiatives at the operations were:

•

Pollution containment capacity and

spillage controls at the MWS plant, as

well as a reduction in the frequency and

extent of tailings pipeline spillages. The

MWS team has been commended for its

commitment and efforts in this regard by

ofﬁcials from the Department of Water and

Sanitation, as well as external ISO 14001

auditors. This is a signiﬁcant achievement

considering the size of MWS operations

spans more than 1,200km

, reclaiming

75,000t of tailings daily

•

Similar infrastructure improvements and

maintenance projects were completed at the

Midway process water dam and the pollution

control dams at Kareerand TSF; Kopanang;

West gold plant, Mponeng and Savuka gold

plants and the South Uranium plant

All key environmental authorisations remain

in place and are regularly maintained.

The South Africa region updated its

environmental management programme

reports for the West Wits and Vaal River

operations at the end of 2016 for approval

by the DMR. Compliance with all regulatory

requirements is monitored through a

comprehensive environmental legal register

and a rigorous external assessment process.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

Picture:

Surface Operations, South Africa

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Water management

Mines neighbouring our Vaal River and West

Wits operations pose a risk of ﬂooding as

pumping underground water has ceased in

these operations. Extraneous water poses a

physical risk to infrastructure and workers, as

well as to adjacent mines, and can have major

ﬁnancial and economic impacts given current

pumping costs and potential future liabilities.

AngloGold Ashanti has been able to largely

mitigate these risks by taking control of

strategic pumping operations, directly or

indirectly, at Margaret Shaft and Great Noligwa

in the Vaal River and at Covalent (Blyvooruitzicht

4 and 6 shafts) and Savuka in West Wits. By

establishing additional pipelines and pumping

infrastructure, AngloGold Ashanti has been able

to use all of the water at Vaal River, primarily at

MWS’ tailings reclamation operations. At West

Wits, a small portion of the water has been

absorbed as process water and the feasibility

study into further offsetting potable water use is

at an advanced stage.

AngloGold Ashanti is committed to a

sustainable solution to the challenges

the region faces relating to mine water

management and associated opportunities

to unlock the beneﬁt from a potential

regional water asset that is currently

perceived to be a liability. Progress in

this area depends on the development of

regional mine-water management plans in

conjunction with national water authorities

and experts, and in collaboration with all

potential stakeholders within the areas

where AngloGold Ashanti operates. These

efforts are strategically structured around

water supply companies as primary water

suppliers. The South Africa regional team is

in ongoing dialogue with regulators, through

the government task team for mine closure

and water management, to help ensure

that all mining companies collaborate and

acknowledge accountability for mine ﬂooding

and regional mine water management

without foisting these liabilities on the last

operating mine in each region.

REGULATORY MATTERS

In May 2015, the amended Department of

Trade and Industry Codes of Good Practice

and the Broad-based Black Economic

Empowerment (BBBEE) Act’s ‘trumping

provision’ came into effect. In October 2015,

the Department of Trade and Industry issued

a Government Gazette exempting the mining

industry from the BBBEE codes for a period

of 12 months to October 2016. This was

followed by the Minister of Mineral Resources

gazetting the ‘Reviewed Broad-based Black

Economic Empowerment Charter for the

South African Mining and Minerals Industry’

(the ‘Reviewed Mining Charter 2016’) on

15 April 2016 for public comments. The

closing date for submission of public

comment was set for 31 May 2016.

AngloGold Ashanti submitted its own

comments to the DMR on 30 May 2016

and was also part of the Chamber of Mines

Mining Charter Reference Group, which

prepared the industry’s submission for

approval by the Chamber of Mines Council,

submitted to the DMR at the end of May

2016. As per the BBBEE Act as gazetted in

October 2015, with the trumping provision,

the Mining Charter was expected to come

into effect on 31 October 2016, failing which

the BBBEE Act takes precedence. It is

not, at this stage, clear what the interplay

between the Revised Mining Charter and

the BBBEE Act and Revised BEE Codes is.

The government may designate the Revised

Mining Charter as a Sector Code in which

case it would be under the auspices of the

BBBEE Act, but has not chosen to do so in

its government gazette notice of 17 February

2016. Until such determination is made, if

at all, the Revised Mining Charter remains a

stand-alone document under the auspices

of the MPRDA and may become subject to

the trumping provision discussed above.

This uncertainty might be resolved either by

government clariﬁcation in this regard or by

the matter receiving judicial attention.

In order to ascertain AngloGold Ashanti’s level

of compliance against the BBBEE Act and the

Codes of Good Practice, in March 2016, the

company underwent BBBEE veriﬁcation by an

independent agent. The South Africa region

achieved Level 4 status – an improvement

from Level 6 in 2012.

For a detailed discussion on labour-related
legal challenges and mining legislation and
regulations, see Regulatory Matters
on page 19.

For AngloGold Ashanti’s performance
on Mining Charter requirements, see
www.anglogoldashanti.com/en/
sustainability/MiningCharter/Pages/
default.aspx.

STAKEHOLDER ENGAGEMENT

Communities

Several initiatives were undertaken during

the year, following successful conclusion

and closure of the social and labour plans

2010-2014 for the West Wits and Vaal River

operations. These included a social impact

assessment of the communities in which

AngloGold Ashanti operates (within the

Merafong and Matlosana municipalities) as

well as the major labour-sending areas of

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

the Eastern Cape from where many of our

employees hail and where social investment

initiatives are undertaken. The purpose of the

study was to:

•

determine the value created since the

implementation of the Socio-economic

Development Framework and Funding

Model in 2012, which was aimed at

addressing the ﬁve pillars of the framework

(land and environment, infrastructure

development, social development, economic

development and institutional development)

•

establish baseline values that can be used

as benchmarks going forward and monitor

progress over time

•

outline stakeholders’ key issues or agendas

and acquire insight into successes and

future requirements

•

inform development of the next social and

labour plan cycle from 2020 to 2024

Key ﬁndings of the study are set out in

the

<SDR>

, covering local and economic

development, community human resource

development, enterprise development, and

social and institutional development.

Community development projects

In the year under review, a total of R88m

was spent on community development, of

which R5m was towards the Social and

Institutional Development Fund, R55m on

community human resources, and R28m on

local economic development.

Key projects delivered during the year included:

•

30 bursaries were granted to community

members to the value of R5.1m, bringing

the total number of bursars currently

enrolled in tertiary education to 72

•

Six vocational and 48 Mining Qualiﬁcations

Authority bursaries were also granted

•

Our internship programme beneﬁted 23

students in 2016 at a cost of R 5.5 million

•

A waste recycling project, in partnership with

Harmony and Sibanye, each contributing

R3 million to the R9 million budget, created

15 permanent jobs and 2,000 indirect jobs

for waste pickers

•

The Wedela agricultural project, aimed at

alleviating poverty and creating sustainable

jobs by cultivating various crops, such as

tomatoes, peppers, chillies and onions,

among others, is located on 26ha of land.

The total capital investment is R8 million over

three years for the creation of 16 direct and

indirect jobs

•

The Botshabelo Community Health Clinic

Maternity Wing, comprising eight wards,

a nursery, pharmacy, reception area and

sluice room, was handed over in July 2016.

A total of R6 million was invested in this

project, which included construction of a

730m

new maternity centre in Khuma, as

well as rooms for ante- and post-natal care,

a sonar facility, a dispensary, nursery and

sterilisation facilities, a staff lounge and two

ablution blocks

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

Picture:

Wedela Agriculture Project, West Wits, South Africa

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

•

A R500,000 science laboratory at St Johns

College in Mthatha is intended to improve

performance in mathematics and science,

as well as learners’ chances to access

high-quality tertiary education institutions

and sustained success in their ﬁelds of

study. The project was completed and

launched in January 2016

•

The AmaMpondo agricultural project,

based in Emalangeni, Eastern Cape, was

launched in September 2016 with a budget

of R6 million over three years. As one of

the AngloGold Ashanti Chairman’s legacy

projects, it is a collaboration with SAB Miller

and Agrumart, the implementing agent.

More details are available in the

<SDR>

•

The Chairman’s Fund supported education

and youth dialogue initiatives for the

empowerment of all towards strengthening

democracy

•

The CSI fund partnered with various NGOs

and schools on learner improvement

programmes, educator development

initiatives for maths and science and early

childhood development practitioners, youth

training and skills development, and care

and support for children living with HIV/AIDS

Current community projects are set out in

the

<SDR>

, including school and agricultural

developments, in line with our social

development plans. More projects are planned

for the 2017 year.

CLOSURE AND LAND MANAGEMENT

On 20 November 2015, the Minister of

Environmental Affairs published the Regulations

Pertaining to the Financial Provision for

Prospecting, Exploration, Mining or Production

Operations – Government Notice R. 1147 –

(the 2015 Financial Provision Regulations).

On 26 October 2016, the Minister published

amendments to the 2015 Financial Provision

regulations that extended the transitional

period to February 2019. The Department of

Environmental Affairs has acknowledged the

many challenges with the regulations as they

stood. In the latest draft revisions of the some

of the main issues such as the future of existing

rehabilitation trust funds have already been

favourably amended and AngloGold Ashanti is

conﬁdent that the ongoing engagements with

the relevant departments through the Chamber

of Mines will lead to the company being able

to comply with the new regulations once they

become effective.

In preparation for implementation and

compliance with the regulations, AngloGold

Ashanti has appointed an independent service

provider to review the region’s closure plans in

line with the new regulations and to optimise

the South Africa region’s Vaal River current

operating footprint.

The region also embarked on several initiatives

to explore alternative land use and closure

objectives, focusing on optimising current land

use, commercial value and community job

creation, including:

•

A broad-based livelihoods project

in collaboration with a community

organisation to target, mobilise and

train low-income communities to grow

fresh produce and improve livestock

management for sustainable food

production and income (see details on

page 40 of the

<SDR>

)

•

An initiative with the South African General

Investment Trust to explore commercial

agriculture projects, focusing on bamboo

production or similar vegetation to remediate

tailings seepage zones, impacted wetlands

and tailings footprints.

The contract with Wits Enterprise was

renegotiated to maintain the existing

phytoremediation (woodlands) projects in the

South Africa region concurrently with a number

of other remediation projects in 2016. These

included an area of more than 150,000m

that

was remediated.

Following demolition of the West Acid Flotation

and Uranium Plant in 2015, the project team

was transferred to the East Acid Flotation and

Uranium Plant in 2016 to demolish all redundant

infrastructure up to ground level. Around 5,000t

of scrap metal have already been removed from

the site and this demolition is expected to be

completed by December 2017.

Final rehabilitation of plant footprints will be

conducted once the areas around the plants

are available for rehabilitation.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

S o u t h A f r i c a

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A n g l o G o l d A s h a n t i h a s s e v e n

m i n e s i n i t s C o n t i n e n t a l A f r i c a

r e g i o n , s i x o f w h i c h a r e c u r r e n t l y

i n o p e r a t i o n . O f t h e s e , A n g l o G o l d

A s h a n t i m a n a g e s f o u r.

Obuasi in Ghana was not operational in 2016

as it is on care and maintenance, having been

in limited operations in the prior year. Closure

is underway at Yatela in Mali.

D E M O C R AT I C R E P U B L I C
O F T H E C O N G O

Kibali

, one of the largest mines of its kind in

Africa, is situated adjacent to the town of Doko

and 210km from Arua on the Ugandan border.

Kibali is co-owned by AngloGold Ashanti

(45%), Randgold Resources Limited (45%)

and Société Minière de Kilo-Moto (SOKIMO)

(10%), a state-owned gold mining company.

Randgold Resources operates the mine.

G H A N A

Iduapriem

, which comprises the Iduapriem

and Teberebie properties in a 110km

concession, is located in the Western Region

of Ghana, some 70km north of the coastal city

of Takoradi and about 10km south-west of the

Tarkwa mine. Iduapriem is an open-pit mine

and its processing facilities include a carbon-

in-pulp (CIP) plant with a gravity circuit. The

gravity feed recovers about 30% of the gold

with the remainder recovered by the CIP plant.

Obuasi

, which has been primarily an

underground operation, mining to a depth

of 1,500m, is located in the Ashanti Region,

approximately 60km south of Kumasi. Limited

mining operations have ceased and the mine

is currently on care and maintenance.

T H E R E P U B L I C O F G U I N E A

Siguiri

is a multiple open-pit oxide gold

mine situated in the relatively remote district

of Siguiri, around 850km north-east of

the country’s capital, Conakry. The gold

processing plant treats about 30,000t daily.

AngloGold Ashanti holds an 85% interest in

Siguiri, with the remaining 15% held in trust

for the nation by the Government of Guinea.

Siguiri is contractor-mined using conventional

open-pit techniques. The area has signiﬁcant

gold mining potential and has long been an

area of traditional artisanal mining.

M A L I

Morila

is a joint venture between AngloGold

Ashanti and Randgold Resources in which

each has a 40% interest, with the remaining

20% held by the Government of Mali.

Randgold Resources operates the mine. Morila

is situated 280km south-east of Bamako, the

country’s capital. The operation ceased mining

operations in 2009 and has fully transitioned

to a tailings storage treatment operation

in quarter four of 2016. The plant, which

incorporates a conventional carbon-in-leach

(CIL) process with an upfront gravity section to

extract the free gold, has an annual throughput

capacity of 4.3Mt.

Sadiola

is a joint venture between AngloGold

Ashanti (41%) and IAMGOLD (41%). The

government of Mali owns the remaining

18%. The Sadiola mine is situated in south-

western Mali, some 77km south-southwest

of the regional capital Kayes. On-site surface

infrastructure includes a 4.9Mt per annum CIL

gold plant where the ore is eluted and smelted.

The mine, which began operating in 1996, has

multiple open pits.

TA N Z A N I A

Geita

, one of our ﬂagship mines, is located

in northwestern Tanzania, in the Lake

Victoria goldﬁelds of the Mwanza Region,

about 120km from Mwanza and 4km

west of the town of Geita. The Geita gold

deposit mined solely as a multiple open-

pit operation until 2015 and successfully

commenced underground mining below

the Star & Comet pit in 2016. The mine will

continue to operate as a mixed open-pit

and underground operation until all open-

pittable economic resources are exhausted.

The mine is currently serviced by a CIL

processing plant with an annual capacity of

5.2Mt. While Geita generates its own power,

the operation of its power-generating facility

is outsourced and fuel is delivered by road.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n e n t a l A f r i c a

CONTRIBUTION TO
REGIONAL PRODUCTION

•

Tanzania

•

DRC

•

Guinea

•

Ghana

•

Mali

CONTRIBUTION TO
GROUP PRODUCTION

•

Continental Africa

•

Rest of AngloGold

Ashanti

I N T E G R AT E D R E P O RT

2 0 1 6

MAP

CONTINENTAL AFRICA
OPERATIONS

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

KEY STATISTICS

Units

2016

2015

2014

Operational performance

Tonnes treated/milled

28.2

27.2

29.9

Pay limit

oz/t

0.034

0.036

0.039

g/t

1.175

1.233

1.345

Recovered grade

oz/t

0.047

0.053

0.054

g/t

1.46

1.64

1.66

Gold production (attributable)

000oz

1,321

1,435

1,597

Total cash costs

$/oz

717

678

783

Total production costs

$/oz

1,005

900

977

All-in sustaining costs

(1)

$/oz

904

815

968

Capital expenditure

(2)

291

315

454

Productivity

oz/TEC

20.70

20.61

14.36

Safety

Number of fatalities

AIFR

per million hours worked

0.51

0.50

1.56

People

Average no. of employees: total

12,691

11,942

16,070

– Permanent employees

5,331

5,061

8,739

– Contractors

7,360

6,881

7,331

Training and development expenditure

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

See footnotes overleaf

PRODUCTION

(000oz)

1,521

1,460

1,597

1,435

1,321

PRODUCTIVITY

(oz/TEC)

10.97

9.97

14.36

20.61

20.70

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Units

2016

2015

2014

Environment

Total water consumption

11,911

16,931

17,582

Total water use per tonne treated

kL/t

0.428

0.603

0.553

Total energy usage

(3)

8.46

8.41

9.47

Total energy usage per tonne treated

(3)

GJ/t

0.30

Total GHG emissions

(3)

000t CO

682

694

826

Total GHG emissions per tonne treated

(3)

t CO

e/t

0.025

0.024

0.025

Cyanide used

7,693

8,405

10,549

No. of reportable environmental incidents

Total rehabilitation liabilities:

430

425

463

– restoration

262

261

292

– decommissioning

168

164

171

Community and government

Community expenditure

Payments to government

260

291

306

– Dividends

– Taxation

– Withholding tax (royalties, etc.)

108

– Other indirect taxes and duties

– Employee taxes and other contributions

– Property tax

– Other (includes skills development)

(1)

Excludes stockpile write-offs.

(2)

Includes attributable share of equity-accounted investments.

(3)

Restated for 2014 and 2015 owing to error in source data.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

KEY STATISTICS

(continued)

AIFR

(per million hours worked)

2.26

1.97

1.56

0.50

0.51

TOTAL CASH COSTS AND
ALL-IN SUSTAINING COSTS

($/oz)

830

1,235

869

1,202

783

968

Total cash costs

All-in sustaining costs

678

815

717

904

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

O P E R AT I O N A L P E R F O R M A N C E

PRODUCTION

The Continental Africa region maintained

consistent performance during 2016 with

increased production at Iduapriem, Siguiri

and Sadiola offsetting production declines

elsewhere in the region. The reduction in

output year-on-year is attributable to planned

lower recovered grades at Geita as the

maiden underground operations ramp up

to commercial quantities at average Mineral

Resource grades; a setback from plant stability

challenges that were encountered in ﬁrst half

of the year in dealing with multiple ore sources

at Kibali; completion of treating mineralised

waste tonnes and transition to treatment of

low grade tailings storage material in the latter

part of the year at Morila; and no production

at Obuasi, which transitioned to care and

maintenance status.

At Kibali, production fell 9% from 2015, to

264,000oz. Kibali’s performance improved

signiﬁcantly in the second half of 2016

as the plant stability issues encountered

in the ﬁrst half of the year were resolved.

Production increased 32% over the ﬁrst

half due to improved plant throughput at

higher metallurgical recoveries, following

the introduction of satellite open-pits in the

fourth quarter which provided higher grade

material and greater ﬂexibility in managing

the multiple ore sources. The operational

challenges encountered in the ﬁrst half of

the year occurred while testing both plant

streams to run on sulphides as per the design

speciﬁcation, ahead of the depletion of oxide

ore. A drop in recoveries was compounded

by a bearing failure on one of the ball mills,

causing a sharp drop in production and a

steep increase in costs. The introduction of

the Kombokolo and Rhino satellite pits in

the fourth quarter of the year also helped the

recovery in production towards year-end, by

adding higher grades and improving mining

ﬂexibility. Kibali reported record tonnage

throughput in the fourth quarter of the year.

At Iduapriem, production increased by 11%

year-on-year as a result of mining in deeper,

higher-grade areas. This was accompanied by

a 9% increase in tonnage treated from higher

plant availability, compared to the previous

year when the plant had an extended major

shutdown to upgrade the semi-autogenous

(SAG) mill. Throughput of 5.1Mt for the year

was a record for the Iduapriem plant. Total

tonnes mined increased by 28% year-on-year

to 28Mt in 2016 as the mine commenced

a major waste stripping programme to

access the ore sources in the Block 7&8 pit

that would provide the foundation for the

sustainability of the future life-of-mine. The

improved performance is attributable to higher

plant and mining ﬂeet productivity as well

as the efﬁciency gains stemming from major

modiﬁcations and repair work completed in the

milling circuit in the previous year.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

Picture:

Geita, Tanzania

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Siguiri’s increase in production was boosted

by higher tonnage treated, up 3% as the plant

maintained consistent availability relative to

the previous period, when it was impacted

by unplanned maintenance. This was partly

offset by a planned decrease in recovered

grade in the ﬁrst half of the year as lower

grade stockpile material was processed

while preparations for access to the Area 1

mining zone were being completed. Mining

commenced in the higher grade Area 1 zone

in the third quarter, with ramp up in the last

quarter contributing signiﬁcantly to increased

production in the latter part of the year.

At Geita, although there was a 5% increase

in plant throughput due to treatment of softer

ore and improved plant availability through

consistent maintenance of operations,

production was down owing to a planned

12% decrease in recovered grade. This was

in line with the mining plan which introduced

ore sourced from the initial underground

operations at the Star & Comet mining area

at lower than the average grades. Higher

grades are expected to be realised as

development progresses and commercial

quantities are achieved.

Sadiola maintained production levels

consistent with the previous year despite

the limited mining ﬂexibility as remaining

oxide ore mining sources are depleted. The

mine delivered the planned 5% increase

in recovered grade, partly offset by a 3%

decrease in tonnage throughput as a result

of an increase in the treatment of transitional

material. Tonnage throughput is ﬂexed with a

combination of the limited newly mined ore,

marginal ore stockpile sources at lower grades

and periodic drawdown from the higher,

full-grade ore stockpiles. Plant operations

were efﬁcient and consistent, which provided

the ﬂexibility to maintain a steady quarterly

production and revenue proﬁle.

Morila completed the mining and processing

of mineralised waste ore during the year

and from the last quarter of the year has

transitioned to a full tailings-storage material

treatment operation which is expected

to continue for the next two years, after

which the mine will transition to full closure.

Morila delivered a 23% increase in tonnage

throughput during the year contributing

22,000oz, as a result of consistent plant

availability and treatment of softer ore, thus

offsetting the decrease in recovered grade.

COSTS

Overall, all-in-sustaining costs for the region

were maintained at the previous year’s levels.

Unit costs increased year-on-year with the 4%

increase in tonnage throughput not sufﬁcient

to mitigate the combined grade-related impact

on production. Despite the increased unit

costs year-on-year, the region managed to

establish a sustainable operating margin,

with total cash costs ending at a respectable

$717/oz for the year.

Cash costs at Siguiri and Iduapriem decreased

year-on-year. At Iduapriem, costs decreased

by 9% as a result of greater operational

efﬁciencies and continued cost management

initiatives undertaken during the year. The

Electricity Company of Ghana has offered

Iduapriem a relatively secure quota of power

at reduced tariffs which has contributed to

maintaining reliable and consistent operations.

At Siguiri, beneﬁts were derived from active

cost management efforts, while operations

were enhanced through increased plant

throughput and recovery, as well as managing

to an optimal feed blend.

During the year, AngloGold Ashanti

consolidated its continuous improvement and

operational review processes together with

the various cost management initiatives under

the umbrella of the ‘Operational Excellence’

programme, focused on delivering systemic

and sustainable operational improvements and

aimed at each operation rapidly progressing

towards targeted all-in sustaining unit costs

that reﬂect the inherent opportunity and

value set within the operation. Operational

Excellence principles will leverage the learnings

and system opportunities derived through the

P500 cost saving initiative with standardised

and consistent measurement of operating

metrics. The initial diagnostic assessments

have been completed at all sites, with

opportunities identiﬁed either in the stage of

implementation or budgeted and planned for

implementation in 2017.

GROWTH AND IMPROVEMENT

The Convention de Base, an extension of

the stability agreement between AngloGold

Ashanti and the Guinean government on

Siguiri, was ratiﬁed by the government at the

beginning of 2017, following access to Area

1 mining zone which was secured mid-year

in 2016. The Hard Rock Combination Plant

Project, for the expansion and conversion of

the processing plant infrastructure will now

commence. This will facilitate the processing

of harder sulphide ore thereby extending

the mine life, lowering costs and increasing

production, while also improving exploration

potential in the area surrounding the mine.

Allied to the mine-life extension project capital

has also been approved for the construction of

R E G I O N A L R E V I E W S

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an owner- operated 39MW power plant, which

will secure the future power requirements of

the mine at lower power unit cost, and further

lower the unit costs for the mine.

The updated feasibility study for the mining

and treatment of sulphide ores at Sadiola,

expected to increase processing plant

throughput, lower costs and extend mine life,

has been completed with our joint venture

partner IAMGOLD. Further work on the project

is subject to requisite government approvals,

agreements and permits. Discussions are

currently underway with ministries of the

government of the Republic of Mali with a view

to expeditiously achieving these approvals.

Capital expenditure for this project is now

expected to be $410m, at 100%.

Geita has successfully transitioned to

underground mining the Star & Comet

mining area. The ﬁrst full year of underground

commercial production will be during 2017

and this will supplement production from

open-pit ore sources. Preparatory work to

access the Nyankanga underground Mineral

Resource has been completed and blasting

operations will begin in 2017. Permitting for

Nyankanga was obtained from the government

of Tanzania in early 2017. The long-term

strategy for Geita is to extend the mine’s life by

extracting the Mineral Resource utilising both

open-pit and underground mining methods.

In 2017, the plan is to also replace the mine’s

original 20-year-old power plant to ensure

reliable power supply.

At Iduapriem, plans are underway for an

extensive waste stripping campaign at the

Teberebie ore body to extend mine life,

increase production levels, and lower costs.

Major cutbacks commenced at blocks 7 and

8 pit in early 2017. In addition to the waste

mining plan, regulatory permits have been

obtained for exploratory work at the Nueng

pit and to explore for high-grade, low-strip

ratio ore bodies within the concession, with a

view to further drive costs down and improve

efﬁciencies and margins across the entire

operation. To improve plant recovery, the

current CIP leaching and adsorption circuit

conﬁguration is being modiﬁed to a hybrid

CIP circuit conﬁguration with commissioning

scheduled for the second quarter of 2017.

At Kibali, shaft sinking was completed to

a depth of 751.2m and the shaft has been

equipped. The focus over the latter part

of the year was on off-shaft underground

development. First ore from the shaft is

expected in the third quarter of 2017. At the

Ambarau hydropower plant, commissioning

commenced in early February 2017, with

ﬁrst power now rescheduled for the ﬁrst half

of 2017. The Azambi hydropower plant, the

third to be built at the mine, was about 10%

complete by the end of 2016 and on track

to be completed in 2018. This will provide

Kibali with 42MW hydropower capacity at

much reduced costs relative to thermal power.

Off shaft development of the crusher and

materials handling system was on track for

commissioning of ore in the latter part of 2017.

With the commissioning of ore production

from the shaft, this will bring an end to Kibali’s

initial project scope and capital. A new pit was

opened at Kombokolo, as mining progressed

at Pakaka and Mengu Hill. Plant modiﬁcations

to add four ﬁne- grinding mills and expand

the pump cell circuit are on schedule for

commissioning in the second quarter

of 2017.

CAPITAL EXPENDITURE

Capital expenditure for the region was lower

compared to 2015, with the reduction mainly

due to cessation of work on capital projects

at Obuasi and reduced spending at Kibali and

Geita as major projects approved in previous

years were completed and commissioned in

the current year. The year’s capital expenditure

at Geita included the purchase of a ﬂeet

of Caterpillar dump trucks for a scheduled

retirement of the existing ﬂeet which is nearing

the end of its useful economic life.

It is expected that capital expenditure in 2017

will increase as stripping of waste rock begins

from the Teberebie ore body to extend the

mine life at Iduapriem; construction of the

combination plant and associated power

plant at Siguiri; underground production is

ramped-up at Geita while the mine’s power

plant is replaced; and additional Ore Reserve

development is conducted ahead of a ramp-

up in underground production at Kibali.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

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R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

O B U A S I – A N U P D AT E

In early February 2016, the military contingent

that had provided security to Obuasi since March

2013, according to the terms of an agreement

between Ghana’s military and members of the

country’s Chamber of Mines, was withdrawn

from the site. No reason was given for the

withdrawal and Obuasi was the only operation

affected among dozens of other mines which

beneﬁt from this form of security. Shortly after the

withdrawal, the site was invaded by hundreds

of illegal miners who immediately began mining

activities in the northern part of the concession.

Police were unable to repel these miners, known

as Galamsey in Ghana.

Following the incursion of hundreds of illegal

miners inside the fenced area of the Obuasi

mine site, AngloGold Ashanti was forced to

declare force majeure and, in the interests

of safety, withdrew all employees performing

non-essential work on the site. However, we

continued with provision of critical services,

such as water pumping and treatment,

medical services and the provision of electricity

(including to some local communities).

During this incursion, AngloGold Ashanti

Ghana continued to lobby vigorously at all

levels of government for the authorities to

bring a peaceful end to the illegal occupation,

and restore the company’s rights as the lawful

and sole permit holder of the concession.

On 8 April 2016, AngloGold Ashanti

Ghana ﬁled a Request for Arbitration with

the International Centre for Settlement of

Investment Disputes (ICSID). The case was

registered on Monday, 2 May 2016. ICSID

is an international arbitration institution,

headquartered in Washington, D.C., which

facilitates dispute resolution between

international investors and host states. The

relevant authorities in Ghana, including the

Attorney General, were duly notiﬁed of the

commencement of proceedings.

In May 2016, the Ministry of Lands and

Natural Resources implemented the voluntary

process, which had commenced in November

2013, to surrender some 60% of the Obuasi

mine concession to the Government of

Ghana. It is anticipated that this relinquished

concession will provide an opportunity for

the Government/ Ministry of Lands and

Natural Resources to use the land as it sees

ﬁt, including to encourage a range of socio-

economic development activities in the Obuasi

region. The area covers about 273km

and

excludes the town of Obuasi, which lies on

land retained by AngloGold Ashanti Ghana.

A directive to clear the site of illegal mining

by 10 October 2016 was given by the

Minerals Commission which, along with a

multi-stakeholder committee it established,

prepared alternative sites – off the company

lease – for the miners to relocate to. At its

peak, an estimated 12,000 illegal miners

operated across the previously fenced-off

area of the site.

On 18 October 2016, the Security Task Force

took the ﬁrst concerted steps to restore safety

and security at the Obuasi concession. At

each step along the way, AngloGold Ashanti

Ghana petitioned authorities to ensure that the

process of clearing illegal mining activity from

the site should be done with the least amount

of force and with full deference to the Voluntary

Principles on Security and Human Rights.

As of 13 February 2017, all areas within the

fenced operational area had been cleared of

illegal miners, and all identiﬁed illegal mining

holes within the fence were closed. Following a

review of the safety, surface and underground

conditions, we notiﬁed the Ghanaian

authorities that the circumstances that led

to the declaration of force majeure no longer

existed and as such lifted the force majeure.

Work continues to completely remove illegal

mining activities within the Obuasi concession

area. Only once that process is complete, and

the feasibility study for the redevelopment of

the mine has been updated with the relevant

information, will the company be in a position

to outline its future plans for Obuasi. At the

time of publication, AngloGold Ashanti Ghana

was preparing a new Amendment to the

Programme of Mining Operations and a review

of all future options.

Picture:

Obuasi, Ghana

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R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

S U S TA I N A B I L I T Y P E R F O R M A N C E

SAFETY

The year in review saw a slight regression

in safety performance from the record

performance of 2015. The region equalled

its 2015 performance of 16 recordable

injuries during the year. However, due to a

4% reduction in the number of hours worked

across the region, there was a regression of

2% in the AIFR from 0.50 in 2015 to 0.51

in 2016. Notwithstanding this regression,

safety performance in the Continental Africa

region remains best-in-class with injury rates

improving approximately 80% since 2013.

Four of the 16 injuries were classiﬁed as LTIFR

of 0.13 injuries per million hours worked, which

compared favourably against the rate of 0.22

recorded for 2015.

Several safety initiatives aimed at continuous

improvement have been implemented

across the region. These include initiatives to

improve levels of engagement and our safety

conversations, training to build safety capacity

among our managers and workforce, and

actions aimed at better understanding the

hazards and risks in our workplaces. These

are augmented through the monitoring and

of corrective/preventive action (CAPA) closure

rates and focus on the management of

contractors working across the region.

Geita’s overall safety performance continued

to improve with the operation achieving an

AIFR of 0.39 injuries per million hours work

during 2016. This is an improvement of 17%

when compared to the rate of 0.47 recorded

at the end of 2015. Geita recorded zero lost-

time injuries during the year and has remained

fatality free since 2012. During April 2016,

Geita was declared the overall winner for the

mining sector of the Tanzanian Occupational

Safety and Health Authority (OHSA). This

award was in recognition of Geita’s high level

of safety and health in the workplace. During

2016, Geita successfully began underground

mining activities without any signiﬁcant

safety incidents.

During 2016, Siguiri in Guinea recorded only

a single recordable workplace incident ending

the year with an AIFR of 0.13 injuries per

million hours worked. This achievement equals

the operation’s record performance achieved

during 2015. In their efforts to entrench their

safety culture, Siguiri continues to focus on

delivery of their safety capacity building, and

workplace safety and health representative

training programmes.

Unfortunately, Iduapriem reﬂected a

regression in safety performance during

2016, recording two recordable occupational

injuries compared to the zero recorded

during the previous year. One of these

being a lost-time injury. Notwithstanding this

regression, safety performance at Iduapriem

remains in the 25th percentile across

AngloGold Ashanti and is among the best

performers in Ghana.

Iduapriem has remained fatality free for three

consecutive years, sustaining its focus on

the management of contractors and ensuring

that contractor activities conform to mine and

group safety requirements.

The safety culture at the operation is maintained

through regular safety stoppages during which

senior management facilitate a two-way safety

conversation with the workforce.

Obuasi in Ghana recorded only a single lost-

time injury during 2016. This performance

translates into an AIFR of 0.30, an

improvement of 77% when compared to 2015.

Sadiola in Mali recorded a marked regression

in the AIFR during 2016 recording six

workplace injuries during the year, compared

to two recorded during the previous year. This

translates into an AIFR of 1.56 injuries per

million hours worked, a regression of 206%

against the rate of 0.51 achieved for 2015. To

reverse this trend, various safety campaigns

and initiatives were implemented, including

a drive to eliminate vehicle-related incidents,

and initiatives to improve safety engagement

in the workplace.

At Yatela, two workplace injuries were

recorded during 2016. This compares

unfavourably with the single injury recorded

during the previous year. Given that Yatela

is currently in closure mode, the nature of

work has changed and management have

implemented campaigns to address the

changing risk proﬁle.

HEALTH

The region is challenged by both occupational

and community health issues ranging from

noise-induced hearing loss (NIHL) to endemic

and pandemic infectious diseases arising

in communities where AngloGold Ashanti

operates and include malaria, ebola and

cholera. Comprehensive programmes tailored

to reduce relevant potential occupational

hazard exposures are in place at all operational

sites to mitigate occupational and community

health risk accordingly.

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R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

There were no new cases of silicosis in the

region during 2016, while three NIHL cases

were diagnosed in the region during the

same period. Although signiﬁcant progress

has been made, the region continues with

integrated malaria control programmes, which

cover beyond our operational sites to include

local communities. These comprehensive

programmes, largely undertaken in partnership

with communities and local governments, have

illustrated beneﬁts for not only the company

but also for surrounding communities, and are

in support of the United Nations Sustainable

Development Goals. Some of the interventions

covered include awareness building, indoor

residual spraying of company and community

structures, chemoprophylaxis, early diagnosis

and effective disease management supported

by monitoring and evaluation. No new cases

of noise-induced hearing loss and silicosis

were reported at Geita, Iduapriem or Siguiri

during 2016.

While AngloGold Ashanti often plays a

lead role, these activities are undertaken in

close collaboration and in partnership with

communities, local government and health

authorities.

At Geita, site management continues to

manage the malaria risk through control

programmes that extend beyond our

operational sites to include local communities in

Geita town. Over and above these community-

based malaria programmes, Geita continues

to assist the local health authorities with

strengthening of generalised health systems.

These include building of an HIV/AIDS testing

centre in Geita, refurbishing parts of Geita

hospital as well as conducting awareness

programmes in cervical cancer and TB.

Although we continued to make progress,

malaria remains endemic. While our integrated

malaria control programmes, which include

our operational site and local communities in

and around Siguiri, continued to make good

progress; the recent Ebola outbreak took a toll

on the country’s health systems.

Guinea was thankfully declared Ebola-free

in June 2016 after an epidemic that lasted

over two years from 2014 to 2016. The risk

of resurgence in Guinea and its neighboring

countries however remains high requiring

heightened surveillance. Prevention and

control measures begun in 2014 continue

on site.

Picture:

Obuasi, Ghana

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R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

Although we continue to make progress,

malaria remains endemic in and around

Iduapriem in Ghana. Efforts to ﬁght malaria

have however ensured very low levels of

malaria. Incidences around or less than 1%

among employees and contractors were

observed in 2016.

In Mali, the principal occupational health

concern is NIHL with three cases reported

through 2016. Efforts to reduce occupational

exposure are underway to address causes of

this. AngloGold Ashanti continues to provide

an integrated malaria programme on the site

and to surrounding communities. This has

helped to keep malaria incidence under 1%

among employees and contractors.

ENVIRONMENT

For the ﬁrst time ever, there were no reportable

environmental incidents in the region in

2016. All the operating mines retained their

ISO 14001 certiﬁcation but Obuasi mine’s

ISO 14001 certiﬁcation has been suspended

as the certiﬁcation body could not conduct

the 2016 surveillance audit as a result of the

security situation at the mine. Geita Gold Mine

has been certiﬁed in full compliance with the

International Cyanide Management Code

meaning that all sites in CAR are now cyanide

code certiﬁed.

Geita: The mine received environmental

authorisation for the Star & Comet

underground mining project, from the

National Environmental Management

Council (NEMC). This was followed by the

submission of the environmental impact

statement for the Nyankanga and Geita

Hill underground project as well as the

new power plant which was subsequently

approved in January 2017. Approval was

received from Lake Victoria Basin Water

Board (LVBWB) for water pumping from

Matandani pit to Kukuluma pit as part of

the refractory ore project. The board also

approved the modiﬁcation of the Nyankanga

Diversion Channel and issued a water

discharge permit from dormant Lone Cone

pit as part of Nyankanga open-pit cut back.

Guinea: The environmental impact notice

for the Siguiri combination plant project was

approved by the national environmental

agency, and subsequently the environmental

permit for the project was issued, subject to

review in November 2017. The completion

of the construction of the return water dam

resulted in stoppage of water abstraction from

Tinkisso River, thus reducing the amount of

fresh water abstracted, maximizing recycling

and eliminating the risk of contaminated water

discharge to the environment.

Iduapriem: An environmental permit for

exploration activities in the Nueng Forest

Reserve adjacent to the mine was issued

by the Environmental Protection Authority

(EPA). The mine also received EPA exploration

permits for Block 1 and Mile 5 as well as

the mining operating permit for Iduapriem,

Teberebie and Ajopa concessions from

Minerals Commission.

Obuasi: The environmental applications and

scoping reports, ﬁrstly, on the redevelopment

of Obuasi and, secondly, on the tailings

and water infrastructure project were

completed and submitted to the EPA. The

EPA gave approval for the mine to begin the

environmental impact assessment process for

these two projects.

Sadiola and Yatela: The environmental

permit for the FN satellite pits was received

from the national environmental authorities.

The environmental and social impact

assessment (ESIA) work for the Sadiola

Sulphides Project (SSP) began at the

beginning of September and was completed

and submitted to the Malian Government as

part of the environmental permit application

in December.

SECURITY

During the reporting period Security focused

on an integrated approach with other

sustainability disciplines to enable effective

management of complex challenges and the

implementation of the security ﬁve-point plan

with active community involvement, which

focusses on strengthening and sustaining

relationships with communities, public security,

relevant governmental agencies and security at

sites, with the ultimate aim of removing people

from risk. The Voluntary Principles on Security

and Human Rights (VPSHR) remains a key

driver for our security management practices.

HUMAN RIGHTS

In 2015 we reported that our human rights due

diligence (HRDD) standard was in development

and scheduled for implementation in 2016.

The due diligence standard considers human

rights risks throughout the lifecycle of our

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operations. Assessments are done at the

prefeasibility stage, and risks are continuously

identiﬁed and mitigated throughout the

operation’s life. Assessments also consider a

number of aspects unique to each operation

such as the geographical location and country

risk; the risks which AngloGold Ashanti may

inadvertently cause or contribute to; and the

potential and actual impacts.

During the ﬁrst quarter of 2016, the HRDD

standard was approved by the executive

committee of AngloGold Ashanti and

implementation commenced. Much of the

implementation process was geared towards

building internal awareness and understanding

of where the company’s activities may have

the potential to intersect with or infringe upon

human rights. This also included preventing

or mitigating potential impacts, or remediating

impacts that have occurred.

At Geita in Tanzania, we initiated a pilot

for the HRDD process late in 2015. We

used a toolkit developed internally in the

organisation to assess compliance with

the various HRDD aspects of the standard.

The pilot was concluded during the ﬁrst

quarter of 2016 and, based on its ﬁndings,

was extended to all other operations in

the company. Operations are required to

conduct self-assessments by the ﬁrst half of

2017, which will be followed by veriﬁcation

of the results by our group internal audit and

corporate functions. Human Rights Working

Group (HRWG) was established to monitor

implementation of the human rights framework.

In 2015 we reported that human rights

ambassador training had been completed at

Geita and that we were in the development

phase of training. Human rights training

was prioritised for all operating sites in

2016, and processes have been initiated to

raise awareness through either induction,

refresher and or classroom based training.

Formal reporting of training statistics will

begin in 2017.

COMMUNITIES

The Geita Economic Development

Programme, which was launched in 2015,

has created over 950 direct and indirect

jobs for the communities surrounding Geita.

The Magogo SME Centre, housing some of

the small and medium enterprise projects,

namely brick-making, tailoring, embroidery,

fabrication and welding, was completed in

December 2016.

Furthermore, Geita continued its support of

the rice and sunﬂower agricultural projects

and secured approximately 310 acres of

arable land from Geita Town and the District

Council for the upscaling of the projects.

Entrepreneurial training and high-quality seeds

were provided to the beneﬁciaries which saw

the yield in rice (paddy) production increase

threefold. A rice storage facility and oil

processing plant will be constructed in 2017

once the value chain analysis and markets

have been secured to ensure sustainability of

the projects.

After extensive consultation with the local

and districts governments of Geita, Geita has

started construction of a 3.7km tarmac road

connecting the mine and Geita Town. The

tarring of the road will signiﬁcantly increase

the safety and health of the community by

eliminating dust.

Resettlement

As part of our social licence to operate, we

endeavour to uphold our company values

while ensuring that our land resettlement

standards and procedures are followed at

all our operations, prior to commencing and

during our mining activities.

In Guinea, the construction of replacement

houses for the affected community of Area

1 in Kintinian was initiated in the ﬁrst half of

2016 and all houses were completed and

ready for occupation by November 2016. The

new relocation site includes a Franco-Arab

and a French school which were completed

at the end of 2016, a stadium, a mosque,

taxi rank, health post, and a primary school,

all except for the stadium and a primary

school did not exist in the relocated Area 1.

As at end of February 2017, 80% of the 218

houses had been occupied by the owners.

The mine has received positive feedback on

the quality and standard of the houses from

both the community and government.

An economic development programme,

including among others rice farming, cashew

plantations and processing, fruit tree plantations

and processing, has been initiated for the

beneﬁt of people affected by the area 1 project

as well as the broader Siguiri community.

As at December 2016, 47 households had

taken occupation of their new houses at

Mankessim in the resettlement process

underway near Iduapriem. Engagement with

the remaining 21 households continues as they

require additional alterations to their houses.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

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Community water infrastructure

Sadiola, in partnership with the Sadiola

municipality and technical services in Kayes,

launched an initiative to supply potable water

to communities. The water-piping distribution

network in four villages surrounding Sadiola

and Yatela was completed in December 2016,

with a water reservoir, a borehole pumping

system with solar panels.

Artisanal and small-scale mining

Geita: In 2016, Geita continued to

experience a high number of intrusions by

trespassers and illegal miners, including

several from outside local communities.

As local authorities and traditional leaders

have no inﬂuence over these people, current

efforts to curb negative impacts have been

ineffective. Their presence has regrettably

led to incidents of community fatalities and

injuries during illegal mining activities, which

remain a concern for us.

Mine security personnel are monitoring

the concession while engaging with the

community and local and national authorities

to ﬁnd an amicable solution.

As a strategy to mitigate the impact of

Artisanal Small-scale Mining (ASM) activities on

particularly vulnerable groups, namely women

and children, Geita mine has designed two

projects comprising 15 formerly ASM women

who will undergo training to eventually run the

Magogo socio-economic center’s canteen

and a further 54 who will participate in a soap

making project.

Sadiola and Yatela: In Mali, mining

companies’ representatives hold weekly

meetings to discuss the impact of ASM and to

work closely with the Government to mitigate

the impact. There has been an increase in the

use of chemicals by ASMs operating next to

our Sadiola and Yatela operations. In addition

to the partnership approaches to manage

ASMs, the operations conduct joint community

and security site visits and sensitisation

campaigns regarding avoidance of mining

active zones.

Iduapriem: The site intensiﬁed its monitoring

programme, targeting areas that were

considered to be hotspots as a result

of which, there has been a noticeable

reduction in ASM activities within the

concession. Speciﬁcally, the number of

children in galamsey (illegal miners) activities

have reduced signiﬁcantly during the year.

Iduapriem also beneﬁted from the national

government’s efforts, through a special

task force, to remove alluvial illegal mining

activities across Ghana.

Siguiri: On the 6 February 2017, the

President of Guinea launched an ASM

formalisation programme in the country

which has seen thousands of artisanal

miners supporting the project. As the Siguiri

mine, we have pledged our support to the

Government and a pilot formalisation project

will be initiated at Siguiri once a framework

has been ﬁnalised by the Government.

Closure

Our approach to closure is focused on

strengthening integration from exploration stage

through to post-closure considerations, taking

into account the impact our mining could have.

Our Yatela mine in Mali is the only operation

that AngloGold Ashanti has under active

closure. During 2016 we speciﬁcally focused

on, amongst others, land use and rehabilitation

and the mine’s closure management. For more

information on this closure, refer to the

<SDR>

R E G I O N A L R E V I E W S

( C O N T I N U E D )

C o n t i n t e n t a l A f r i c a

Picture:

Artisanal mining in the vicinity of Geita, Tanzania

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A n g l o G o l d A s h a n t i ’s o p e r a t i o n s i n

t h e A u s t r a l a s i a n r e g i o n , S u n r i s e

D a m a n d Tr o p i c a n a , a r e l o c a t e d i n

t h e n o r t h e a s t e r n g o l d f i e l d s o f t h e

s t a t e o f We s t e r n A u s t r a l i a .

Sunrise Dam

, wholly-owned by AngloGold

Ashanti, is situated 220km north-east of

Kalgoorlie and 55km south of Laverton. Gold

production commenced at Sunrise Dam in

1997. Underground mining, carried out by a

contract mining company, is now the primary

source of ore for the operation, following

the completion of mining the Crown Pillar at

the base of the 490m deep pit in 2014. The

processing plant, comprising conventional

gravity and carbon-in-leach (CIL) circuits, is

owner-managed.

Tropicana

, a joint venture between

AngloGold Ashanti (70% and manager) and

Independence Group NL (30%), is located

200km east of Sunrise Dam and 330km

east-northeast of Kalgoorlie. The operation

began gold production in September 2013

following development approval in November

2010. The open-pit operation features a large-

scale, modern processing plant which uses

conventional CIL technology and includes

higher-pressure grinding rolls for energy-

efﬁcient comminution. Mining is carried out by

a contract mining company and the plant is

owner-managed.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

CONTRIBUTION TO
GROUP PRODUCTION

•

Australasia

•

Rest of AngloGold

Ashanti

CONTRIBUTION TO
REGIONAL PRODUCTION

•

Sunrise Dam

•

Tropicana

Picture:

Tropicana, Australia

I N T E G R AT E D R E P O RT

2 0 1 6

MAP

AUSTRALASIA
OPERATIONS

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

KEY STATISTICS

Units

2016

2015

2014

Operational performance

Tonnes treated/milled

8.9

8.2

7.8

Pay limit

oz/t

0.06

0.07

g/t

1.86

1.85

2.29

Recovered grade

oz/t

0.058

0.068

0.078

g/t

1.82

2.12

2.43

Gold production (attributable)

000oz

520

560

620

Total cash costs

$/oz

793

702

804

Total production costs

$/oz

1,056

919

1,070

All-in sustaining costs

(1)

$/oz

1,067

875

986

Capital expenditure (attributable)

109

Productivity

oz/TEC

46.81

55.84

62.00

Safety

Number of fatalities

AIFR

per million hours worked

9.49

8.56

10.73

People

Average no. of employees: total

925

836

832

– Permanent employees

211

195

194

– Contractors

714

641

638

Training and development expenditure

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

See footnotes overleaf

PRODUCTION

(000oz)

258

342

620

560

520

PRODUCTIVITY

(oz/TEC)

43.46

49.64

62.00

55.84

46.81

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Units

2016

2015

2014

Environment

Total water consumption

7,577

6,648

6,749

Total water use per tonne treated

kL/t

0.691

0.662

0.708

Total energy usage

5.62

5.14

5.52

Total energy usage per tonne treated

GJ/t

0.51

0.58

Total GHG emissions

000t CO

336

359

Total GHG emissions per tonne treated

t CO

e/t

0.031

0.034

0.037

Cyanide used

4,696

4,130

4,398

No. of reportable environmental incidents

Total rehabilitation liabilities:

– restoration

– decommissioning

Community and government

Community expenditure

0.6

0.3

0.2

Payments to government

– Taxation

– Withholding tax (royalties, etc.)

– Employee taxes and other contributions

(1)

Excludes stockpile write-offs.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

KEY STATISTICS

(continued)

AIFR

(per million hours worked)

6.33

7.91

10.73

8.56

9.49

TOTAL CASH COSTS AND
ALL-IN SUSTAINING COSTS

($/oz)

1,211

1,680

1,047

1,376

804

986

Total cash costs

All-in sustaining costs

702

875

793

1,067

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

O P E R AT I O N A L P E R F O R M A N C E

PRODUCTION

A planned decrease in head grades at

Tropicana impacted the region’s total

production for the year, which although

within plan, ended lower than the previous

year. Sunrise Dam however delivered a 5%

improvement in output year-on-year, largely

due to increased mill throughput and improved

head grades.

At Sunrise Dam, mining transitioned from

the GQ ore body into the Vogue ore body

during the year, with the Dolly and Cosmo ore

bodies also contributing signiﬁcant mill feed.

Underground ore was the primary source of

mill feed and underground ore mined of 2.8Mt

was higher than in 2015. Underground ore is

blended with intermediate grade of 1.45g/t

stockpiled ore (accumulated during open pit

mining) to meet the processing plant capacity,

which reached 4Mt in 2016.

Underground ore production continued

to improve, achieving a record annualised

rate of 3.3Mtpa in the last quarter of 2016

as the large 800,000t Dolly stope was

brought into full production. This reﬂects

the steady improvement in productivity in

the underground mine with the shift to bulk

mining methods.

Tropicana again achieved the annual plan

given at the start of the mine for 2016,

producing a total of 417,000oz, of which

292,000oz are attributable to AngloGold

Ashanti. As stated, gold production was lower

than in 2015 due to the planned decrease

in the average head grade for the year from

2.75g/t to 2.10g/t. This is consistent with

the grade streaming strategy that involved

preferential treatment of higher grades in the

ﬁrst years of the mine’s production, gradually

declining to the life-of-mine head grade of

approximately 2.0 g/t. During this period, low

and medium grade ore was stockpiled.

The lower grades mined in 2016 were partially

offset by an increase, to 6.9Mt (2015: 6.2Mt) of

throughput in the processing plant as the plant

optimisation project was completed towards

year end. This project, which was introduced

as a strategy to address the planned decline

in production following the end of grade

streaming, has successfully lifted design

throughput capacity of the processing plant

to 7.5Mtpa. Metallurgical recoveries remained

steady at approximately 89%, and mine-to-

mill reconciliation, for both tonnes and grades,

continued to align extremely well. Mining was

carried out in the Tropicana, Havana and

Boston Shaker pits during the year.

COSTS

The all-in sustaining cost for the region

increased due to a stronger Australian

dollar against the US dollar, planned lower

production at Tropicana and increased

mining spend at Sunrise Dam, where a

third jumbo was added to the ﬂeet to set

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

Picture:

Sunrise Dam, Australia

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

up new mining areas and carry out decline

development, as well as contributing to the

additional ore tonnes mined. ‘Operational

excellence’ initiatives resulted in signiﬁcant

productivity improvements and a reduction

in mining unit costs. This work will continue

in 2017. Additionally, in the last quarter of

2016, a Caterpillar 6060, 600t class shovel

was introduced to the open pit mining ﬂeet

at Tropicana to increase mining rates to an

annualised rate of 80Mtpa and to better match

the higher throughput requirements of the

processing plant.

GROWTH AND IMPROVEMENT

Throughout 2016 a study has been carried out

on a recovery enhancement project at Sunrise

Dam. The presence of moderate levels of

refractory sulphide ores has led to recoveries

averaging around 85% over the mine’s 19-year

life. To date, the study work indicates that a

signiﬁcant improvement in recovery can be

achieved through the addition of a ﬂotation/

ultra-ﬁne grind circuit. The study is scheduled

for completion in the ﬁrst quarter of 2017 when

approval for the project will be sought.

Work is also continuing on a materials handling

system to underpin the long-term viability of

the underground mine. This project involves

underground crushing and conveyor haulage

of ore to the surface run-of-mine pad. Should

it prove viable, it will reduce material rehandling

and truck haulage costs, enabling the full

potential of the ore body to be unlocked

by lowering cut-off grades and maximising

production rates.

At Tropicana the higher mining and throughput

rates, introduced in late 2016, will enable the

resumption of grade streaming from mid-2017 for

at least two years. This is expected to increase

production to between 450,000-490,000oz

(at 100%) from the second half of 2017.

Work is continuing on the Long Island study,

which is investigating large cutbacks to the

pits utilising low-cost mining options. These

include strip mining of the depth extensions to

the Tropicana mineralised system and using

the completed Tropicana pit as a void into

which waste will be backﬁlled. The proposed

backﬁlling of the Tropicana pit, in conjunction

with strip mining, is expected to reduce the

cost of mining waste signiﬁcantly by introducing

short horizontal hauls instead of the long uphill

hauls out of the pit to surface waste dumps that

would be required by conventional mining.

It is anticipated that the study will be

completed in mid-2017. If the mining method

is implemented, the initial Long Island cutback

would begin in 2019 when the Tropicana pit

has been mined to its full depth. An extensive

161,000m programme of reverse circulation

and diamond drilling was carried out in 2015

and 2016, resulting in a 45% increase in the

mine’s Ore Reserve and a 27%, or 1.73Moz,

increase in the Mineral Resource, as at 31

December 2016. The increase in the Mineral

Resource was achieved largely through

signiﬁcant additions in the Havana South and

Boston Shaker zones following application of

the Long Island mining methods and costs,

and through an increase to the underground

Mineral Resource along the entire strike length

of the Tropicana mineralised system. Further

increases are anticipated in 2017, depending

on the outcome of the Long Island study.

Towards the end of 2016, AngloGold Ashanti

entered into a farm-in agreement with Saracen

Mineral Holdings Ltd to earn up to 70% in

Saracen’s Carosue Dam North tenements.

The joint venture encompasses two tenement

packages, Butcher Well and Lake Carey,

covering 339.56km

, approximately 120km to

the north of Saracen’s Carosue Dam project.

Field work, including the ﬁrst phase of drilling

at Butcher Well, will begin in the ﬁrst quarter

of 2017.

CAPITAL EXPENDITURE

Overall, capital expenditure in the region

increased, primarily due to increased waste

stripping in the Tropicana 2 cutback. Also at

Tropicana, the processing plant optimisation

project was successfully completed during

the year.

At Sunrise Dam, capitalised mining spend

increased in 2016 with the addition of an

extra jumbo, which commenced operating on

site in June, increasing the mining ﬂeet from

two to three jumbos. The jumbo will open up

new mining areas and is focused initially on

capitalised decline development.

Stay-in-business capital spend at Sunrise

Dam is expected to rise in 2017 with the

construction of the ﬂotation and ultra-ﬁne grind

circuit to improve gold recovery.

S U S TA I N A B I L I T Y P E R F O R M A N C E

SAFETY

In line with AngloGold Ashanti’s prioritisation

of major hazard management, a set of major

hazard standards were developed. While

various critical control monitoring systems are

in place across the company, a system for

common application is being piloted at Sunrise

Dam. The region’s safety performance remains

strong. Again there were no fatalities during the

year, while the AIFR was 7.49 per million hours

worked. The severity rate, a measure of time

lost due to injury, is very low at both operations

indicating the minor nature of the injuries.

HEALTH

The Australasia region rolled out mental

health training for supervisors and managers

during 2016. This training was designed to

reduce stigma surrounding mental health and

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

to provide supervisors and managers with

knowledge and tools to help them proactively

address issues before they become signiﬁcant

problems. Further mental health training,

which is delivered by the company’s Employee

Assistance Programme provider, will be

delivered in 2017. The Australasian operations

were free of occupational disease for the year.

The company provides equitable medical

insurance cover for all employees.

EMPLOYEES AND LABOUR RELATIONS

By the end of 2016 more than 90% of

AngloGold Ashanti Australia (AGAA) employees

had completed a tailored training programme

entitled Fairness@AGAA, which uses the

company’s values as a guide to leadership

behaviour. This programme incorporates

hands-on exercises and real-life case studies

to help participants understand unlawful

discrimination, harassment and workplace

bullying. These concepts are explained in terms

of current legislation as well as AGAA’s Fairness

in Employment Policy and Grievance Process.

The programme is aligned with best practice

in relation to the Australian equal employment

opportunity legislation and it has been positively

received and continues to be rolled out for

new employees and the employees of the

company’s major contractors.

AngloGold Ashanti continues to support

the Women in Mining of Western Australia

mentoring programme, with employees

participating both as mentors and mentees.

COMMUNITIES

AngloGold Ashanti Australia’s community

engagement strategy is focused on the

communities that are considered local to

its operations in Western Australia’s North

Eastern Goldﬁelds, including the towns of

Laverton and Kalgoorlie-Boulder and the

remote Tjuntjuntjara Aboriginal Community

east of Tropicana.

A signiﬁcant portion of the community social

investment in the region is directed towards

education and youth and, in 2016, the

company built upon its long-standing support

for the youth academies that operate at

the high schools in the Goldﬁelds: Clontarf

Goldﬁelds Academy, the Girls Academy

run within Role Models and Young Leaders

Australia and the Graham (Polly) Farmer

Foundation’s Follow the Dream/Partnerships

for Success Programme.

A pilot Transition-from-School-to-Work

Programme developed in partnership with

the Clontarf Goldﬁelds Academy and Triodia

Tropicana, an Aboriginal-owned contractor at

the Tropicana mine, generated encouraging

results and will be expanded in 2017. The

programme provides a supportive environment

in which to experience ﬂy-in, ﬂy-out work away

from home at a mine site. Broader career

guidance and work experience is provided

to students from all three academies through

mine tours and interaction with AngloGold

Ashanti staff.

Picture:

Tropicana, Australia

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A u s t r a l a s i a

The company also supports and facilitates

programmes in Kalgoorlie-Boulder and

Laverton that are designed to remove

barriers to employment, including the Keys

for Life Driver Training Programme, which

helps young people to gain a driver’s licence

and a range of life skills. In Laverton this

programme is delivered by the Laverton

Leonora Cross Cultural Association (LLCCA) of

which the company is a founding member. A

collaborative partnership between local mining

companies, Aboriginal organisations and

government agencies, the LLCCA delivers a

range of programmes and activities for youth,

adults and children. It also provides community

meeting facilities along with an art gallery for

the sale of artwork produced by local people.

Other initiatives supported by AngloGold

Ashanti Australia in 2016 included the

Tjuntjuntjara Rangers Programme to train

women rangers from the Tjuntjuntjara

community in native ﬂora seed collection and

seed quality control. This training will enable

development of a seed collection business that

will provide seeds for rehabilitation purposes.

ENVIRONMENT

Energy management and

responsible stewardship

The gas pipeline project was completed

in December 2015. Electrical power at the

Australian operations is now generated by

on-site power stations using predominantly

natural gas delivered by the Eastern

Goldﬁelds Pipeline. Gas delivery during

2016 was uninterrupted and all performance

expectations were met. A small number of

diesel units remained at each site to provide

peak load capability and emergency back-

up power for critical systems should gas

supply be interrupted. A number of the

Operational Excellence initiatives launched in

the region have improved energy efﬁciency,

including optimisation of compressed air,

oxygen generation and distribution systems,

installation of LED lighting, use of solar

powered remote pumping equipment, and

the introduction of priority road rules (PRR) in

the open pit at Tropicana. Under PRR, stop

signs were removed from haulage circuits and

right-of-way authority assigned to different

classes of vehicles. Emergency vehicles take

priority followed by production equipment,

including haul trucks, then working machines

and ﬁnally light vehicles. This has enabled free

ﬂow of trafﬁc, signiﬁcantly reducing haul truck

fuel consumption and improving load and

haul productivity.

Climate change

In Australia, the government introduced the

carbon emissions safeguard mechanism,

aimed at limiting future growth in GHG

emissions. After setting baseline emission

thresholds, the safeguard mechanism requires

that companies submit carbon credits or

pay penalties for excess emissions. Sunrise

Dam applied using its baseline emissions in

accordance with the regulatory scheme’s

default mechanism. Tropicana will apply for a

baseline emission level using the alternative

calculated baseline method during 2017.

Water

At Tropicana in Australia, hypersaline water

mounding beneath the TSF caused the water

table to rise and posed a risk to deep-rooting

native ﬂora. Several water recovery boreholes

were installed to lower the water table,

successfully mitigating the risk.

Biodiversity

In Australia, the Great Victoria Desert

Biodiversity Trust (GVDBT) was established

by the Tropicana Joint Venture (AngloGold

Ashanti 70% and manager, Independence

Group NL 30%) as part of its offset strategy

for Tropicana under the Federal Environmental

Protection and Conservation Act 1999. The

Trust made good progress in 2016 with a

series of workshops in Kalgoorlie-Boulder

to progress the Adaptive Management

Partnership (AMP) and more clearly deﬁne

its role over time with the involvement of

the traditional owners of the area and other

parties. The AMP represents a coordinated

approach to implementing adaptive

management in the Great Victoria Desert

by combining the philosophies and tools

of landscape-scale management (Open

Standards for the Practice of Conservation)

and collective action (Collective Impact). The

workshops were designed to reach a shared

agreement on the key assets, threats and

strategies to guide work to deliver a healthy

Great Victoria Desert. This work included

a focus on achieving better outcomes for

endangered species, the Malleefowl and

Sandhill Dunnart; improving biodiversity;

reducing large destructive ﬁres across the

region; and empowering traditional owners

with the skills and training.

Integrated closure planning

Given the shorter life open pit operations in

Australasia region, as well as rising community

expectations and increased external scrutiny,

integrated closure planning and implementation

is a focus at our mines in Australia. Mine

closure plans at both mines will be updated

through 2017 and 2018 to meet regulatory

requirements. A gap analysis comparing these

plans to the group’s Closure Standard will be

carried out in 2017, and a total cost of closure

will be developed for each site for strategic

planning and for long-term scenarios.

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

A n g l o G o l d A s h a n t i h a s t h r e e

m i n i n g o p e r a t i o n s – f e a t u r i n g

o p e n p i t a n d u n d e r g r o u n d m i n i n g

– i n i t s A m e r i c a s r e g i o n . I n

a d d i t i o n , a n a c t i v e g r e e n f i e l d s

e x p l o r a t i o n p r o g r a m m e i s

u n d e r w a y i n C o l o m b i a .

A R G E N T I N A

Cerro Vanguardia

, in which AngloGold

Ashanti has a 92.5% stake, is the company’s

sole operation in Argentina. Fomicruz, a state

company operating in the province of Santa

Cruz, owns the remaining 7.5%. Located to

the northwest of Puerto San Julián, in the

province of Santa Cruz, Cerro Vanguardia

operates multiple small open pits with high

stripping ratios and multiple narrow vein

underground mines. The metallurgical plant

has a daily capacity of 3,000t and includes a

cyanide recovery facility.

B R A Z I L

AngloGold Ashanti Córrego do Sítio

Mineração

(AGA Mineração), which is wholly

owned, comprises two operational units

located in the state of Minas Gerais, close to

the city of Belo Horizonte:

•

The Cuiabá complex includes the Cuiabá

and Lamego mines and the Cuiabá and

Queiroz plant complexes. Cuiabá has been

in operation for over 30 years while Lamego,

an underground mine, has been in operation

for seven years. The Cuiabá complex has

changed from cut-and-ﬁll to sub-level

stoping, increasing the contribution from

narrow vein ore bodies from 15% to 40% of

the mine’s total production and improving

rock engineering controls (support, design

and monitoring). Ore from the Cuiabá and

Lamego mines is processed at the Cuiabá

gold plant. The concentrate produced is

transported 15km by aerial ropeway to the

Queiroz plant for processing and reﬁning.

Total annual capacity of the complete

Cuiabá circuit is 1.75Mt. The Queiroz

hydrometallurgical plant also produces

around 200,000t of sulphuric acid as a by-

product, which is sold commercially in local

Brazilian markets.

•

Córrego do Sítio, in operation since 1989,

consists of three operations, one oxide open

pit mine and two sulphide underground

mines, the ore from which is treated by

heap leach and at a pressure leaching

plant respectively. The sub-level stoping

mining method is used underground. The

distance from the main underground mine

(Mina I) to the metallurgical plant is around

15km. Annual plant capacity is 1.1Mt. Gold

production from both operations is reﬁned at

the Queiroz plant (141km from the plant).

Serra Grande

, wholly owned by AngloGold

Ashanti, is located in central Brazil in the state

of Goiás, about 5km from the city of Crixás.

It comprises two mechanised underground

mines: Mina III (ore body IV) and Mina Nova

(Pequizão ore body) – and an open pit (open

pit ore body V). One dedicated metallurgical

plant treats all ore mined. Annual plant

capacity is 1.3Mt. A new area, Palmeiras, is

undergoing drilling campaigns to enhance

production levels.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

CONTRIBUTION TO
GROUP PRODUCTION

•

Americas

•

Rest of AngloGold

Ashanti

CONTRIBUTION TO
REGIONAL PRODUCTION

•

Argentina

•

Brazil

Picture:

Cerro Vanguardia, Argentina

I N T E G R AT E D R E P O RT

2 0 1 6

MAP

AMERICAS
OPERATIONS

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

KEY STATISTICS

Units

2016

2015

2014

Operational performance

(1)

Tonnes treated/milled

7.0

6.8

Pay limit

oz/t

0.100

0.098

0.092

g/t

3.421

3.351

3.152

Recovered grade

oz/t

0.106

0.108

0.104

g/t

3.64

3.71

3.58

Gold production (attributable)

000oz

820

948

996

– Continuing operations

000oz

820

831

785

– Discontinued operations

000oz

–

117

211

Silver (attributable)

Moz

4.9

4.4

3.1

Total cash costs

$/oz

578

576

676

Total production costs

$/oz

909

845

918

All-in sustaining costs

(2)

$/oz

875

792

974

Capital expenditure (100% basis)

225

196

225

– Attributable (including Colombia)

221

191

221

– Attributable (excluding Colombia)

220

184

219

Productivity

oz/TEC

13.98

15.05

14.38

Safety

Number of fatalities

AIFR

per million hours worked

3.96

5.61

3.79

People

Average no. of employees: total

(3)

8,126

7,679

8,588

– Permanent employees

5,653

5,492

5,944

– Contractors

2,473

2,187

2,644

Training and development expenditure (excluding Colombia)

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

See footnotes overleaf

PRODUCTION FROM
CONTINUING AND
DISCONTINUED OPERATIONS

(000oz)

953

1,001

996

948

820

PRODUCTIVITY

(oz/TEC)

14.72

14.25

14.38

15.05

13.98

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Units

2016

2015

2014

Environment (excludes Colombia)

Total water consumption

8,067

10,839

12,170

Total water use per tonne treated

kL/t

1.115

0.588

0.462

Energy usage

3.94

4.86

6.05

Total energy usage per tonne treated

GJ/t

0.54

0.26

0.23

Total greenhouse gas (GHG) emissions

(4)

000t CO

180

172

168

Total GHG emissions per tonne treated

t CO

e/t

0.025

0.020

0.017

Cyanide used

2,333

5,044

6,428

No. of reportable environmental incidents

Total rehabilitation liabilities (includes Colombia):

149

138

273

– restoration

108

100

222

– decommissioning

Community and government (includes Colombia)

Community expenditure

Payments to government

237

235

261

– Dividends

–

– Taxation

– Withholding tax (royalties, etc.)

– Other indirect taxes and duties

– Employee taxes and other contributions

– Property tax

– Other

(1)

Operational performance data for the Americas region is for the continuing operations (excludes CC&V which was sold effective 3 August 2015), unless otherwise stated.

(2)

Excludes stockpile write-offs.

(3)

100% basis and excluding Colombia and Denver regional ofﬁce.

(4)

Reserved for 2014 and 2015 owing to error in source date.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

KEY STATISTICS

(continued)

AIFR

(per million hours worked)

5.20

4.74

3.79

5.61

3.96

TOTAL CASH COSTS AND
ALL-IN SUSTAINING COSTS

($/oz)

680

1,099

653

1,011

676

974

Total cash costs

All-in sustaining costs

576

792

578

875

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

O P E R AT I O N A L P E R F O R M A N C E

PRODUCTION

Production from the Americas region declined

in 2016, due to lower output from the

Brazilian operations.

AGA Mineração was affected by delayed

access to certain high-grade stopes early in

the year, a deﬁcit in secondary development,

ongoing geotechnical and support challenges,

licensing delays and geological modelling

issues. Production was also impacted by a

fatal accident in late September.

The strategic mine plan has been amended and is

expected to help the operations deliver improved

performance going forward. The revised mine plan

comprises the treatment of additional ore from

lower-grade zones, with higher tonnages helping

to offset the lower grades.

At Córrego do Sítio, despite a 2% increase

in tonnages treated from both the oxide and

sulphide operations, overall production was

impacted by reduced grades from the main

underground ore body, a deﬁcit in secondary

development and a longer-than-planned

stoping cycle.

At Serra Grande, delays in the award of

permits required for the Corpo Sul open pit,

along with geotechnical challenges affecting

the ramp to access high-grade areas at

underground Mina Nova in the Pequizão ore

body, had a negative impact on operations.

Cerro Vanguardia delivered an increase in

production, achieving the highest level in

17 years, due to an increase in tonnes treated

at the plant together with operational and

metallurgical improvements. This positive

performance was partially offset by lower

grades mined, owing to variability in the

mining model.

COSTS

As the region continued to focus on cost

management and production improvements

resulting from the Project 500 efﬁciency

programme, total cash costs remained

virtually unchanged. This was achieved

despite lower production and signiﬁcant

inﬂationary pressures, including annual salary

increases. In Brazil, all-in sustaining costs

were mainly affected by higher sustaining

capital expenditure.

In Argentina, total cash costs were 10%

lower, aided by higher by-product income

from silver production, higher volumes, and

the weaker local currency. Costs were also

favourably impacted by the reimbursement

by the government of Argentina relating to

exports through Patagonian ports. Cost

management initiatives at Cerro Vanguardia

resulted in savings derived from higher mill

throughput and silver recovery; reduced use

of consumables; negotiated price reductions

for key inputs such as ammonium nitrate,

grinding media; gold reﬁning services; cost

reductions in open pit mining; backﬁlling of

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

depleted pits and improved maintenance of

heavy mining equipment.

CAPITAL EXPENDITURE

Capital expenditure for the region increased by

15% over 2015 levels, and was mostly spent in

Brazil to increase Ore Reserve development in

order to improve mine ﬂexibility at all operations,

raise tailings dam at Cerro Vanguardia and

AGA Mineração, and convert the metallurgical

leaching process at Serra Grande.

At Cerro Vanguardia, capital expenditure

was lower compared to 2015 mainly related

to lower deferred stripping and the capital

expenditure for the underground expansion

project executed in the previous year; this

was partially offset by higher capitalised

Ore Reserve development related to higher

underground production. The depreciation

of the Argentinian peso against the US

dollar also aided the reduction in dollar-

denominated expenditure.

Picture:

Serra Grande, Brazil

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

The region’s capital expenditure is expected

to increase in 2017 as Cerro Vanguardia

focusses on site exploration to extend the

mine life; AGA Mineração accelerates Ore

Reserve development at the Cuiabá complex

and evaluates ore-sorting prototypes at the

Córrego do Sítio complex; and Serra Grande

develops the high-grade Palmeiras and Inga

ore bodies, to increase production and extend

mine life.

GROWTH AND IMPROVEMENT

At AGA Mineração, additional development

work is underway to improve mining ﬂexibility;

implementation of ore sorting prototypes is

planned; and a new pushback at the open pit

at Córrego do Sítio is being studied.

Work began at Cuiabá on the ventilation and

transportation systems, for operating at depths

between 1,500 to 2,500 metres from 2020

while doing the necessary work to ensure

stable production levels in the interim. The

drilling campaign at Córrego do Sítio aims to

conﬁrm the ore sources that will help improve

production in the medium term and extend the

life of mine from a new open pit (CdS III) and

new underground mines at the Mina II and São

Bento Deep ore bodies.

At Serra Grande, exploration work is

delivering positive results for future production

improvements while negotiations continue

with owners of Palmeiras Sul ahead of

accelerating exploration to conﬁrm the area’s

potential. Underground diamond directional

drilling has proved grade continuity of current

structures with the new Inga ore body to begin

production in 2017. A new open pit pipeline is

in place while drilling campaigns are underway

at the Pequizão ore body. Drilling below the

Pequizão area has identiﬁed a new exploration

target (Mangaba). The discovery conﬁrms

the depth exploration potential of Crixa’s

Greenstone Belt.

At Cerro Vanguardia, the underground

expansion continues according to schedule,

following the initiative launched in 2015

to accelerate open pit and underground

operations for optimisation of life-of-mine

economic performance and increase

production over the coming ﬁve years.

In Colombia, pre-feasibility evaluation work

continued throughout 2016 with Gramalote

and La Colosa projects and these studies are

expected to be completed by the end of 2017

and mid-2018 respectively. Nuevo Chaquiro

project successfully completed a conceptual

study and the approval to advance to pre-

feasibility phase will be sought during 2017.

Greenﬁelds exploration activities were slowed

down in 2016 although ﬁeld activity continued

all year at the Guintar prospect.

S U S TA I N A B I L I T Y P E R F O R M A N C E

SAFETY

At the Cuiabá complex, there was a fatal

accident in September when one of our

contractors’ employees, Mr Norbeto Rezende

da Silva Filho, was fatally injured in a heavy

mobile equipment accident. As a follow-up

and to avoid any repeat incidence, in line with

our group safety strategy, a bespoke plan

was launched at each operation in Brazil.

The plans, overseen by the mines’ general

managers, address 20 critical initiatives on

safety and health, reinforcing leadership

commitments and reviewing safety tools.

This is implemented through a structured

project charter, and addresses matters

related to critical controls, risk management,

safety standards, safety leadership and

occupational health.

At Cerro Vanguardia, an external consultant

was hired to analyse and assist in detecting

the roots of unsafe behaviour in the

organisation. The process has commenced

already, starting with visits and interviews at

all levels and a preliminary report is expected

in the ﬁrst quarter of 2017. Additionally, in

order to reinforce contractor safety behaviour,

the mine will standardise the safety practices

for all contractors to be aligned with

AngloGold Ashanti’s policies and practices.

As part of the change to our safety culture,

all managers have received additional training

observing and detecting unsafe practices.

HEALTH

AngloGold Ashanti’s health policy includes a

focus on employee wellness programmes. As

part of this programme at Cerro Vanguardia,

various activities were undertaken to promote

awareness of healthy living for all employees

as part of the “Healthy Life” campaign. This

included medical examinations for employees.

At our Brazilian operations, prevention and

immunisation campaigns were conducted

throughout the year, including Pink October

for breast cancer, Blue November for prostate

cancer and Red December for AIDS, as

well as inﬂuenza and H1N1 vaccination

campaigns. The 20 critical initiatives of

the safety and health programme include

occupational hygiene, ergonomics, and

alcohol and drug testing.

ENVIRONMENT

One environmental incident was reported in

the year (2015: 1). In Nova Lima, Minas Gerais,

a leak at the Queiroz metallurgical plant was

found to exceed allowed levels of efﬂuent

solution. The leak went into Rio das Velhas

River. However, there was no environmental

impact resulting from this.

The Cocoruto Dam serves as the ﬁnal

efﬂuent control point for the Queiroz Industrial

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Complex. Construction of a spillway on

this dam commenced in January 2016 as

its operating water level had to be lowered

by up to 4m, reducing its dilution capacity.

Although additional precautions had been

taken, several operational disruptions occurred

which included the theft of power cables from

a critical pump, resulting in the unintended

release of efﬂuent containing arsenic and

weak acid dissociable cyanide exceeding the

acceptable limits. There was no environmental

impact on the Velhas River. Actions were

undertaken to deal with the incident and to

avoid a recurrence. These mitigation actions

include: changing the cyanide alerts limits;

systematic efﬂuent treatment; downstream

monitoring of Cocoruto Dam’s special

receptor; and repairing the Calcinados dam

recirculation system.

All operations in the Americas region are

ISO 14001 compliant and were certiﬁed

compliant in terms of the cyanide code.

Additionally, in Brazil, all licences critical to

the operations were obtained during the year,

including the permit for a deforestation licence

for the open pit Corpo Sul at Serra Grande

which was granted in late November following

a ﬁve months delay that impacted on the

operation’s production.

Cerro Vanguardia conducted a review and

update of its closure plan, in line with the

three-yearly legal requirements. The results

were submitted to the environmental authority.

Studies have been carried out on the lithology

present in the deposit to prevent acid drainage

of rock and to manage the possible costs of

mine closure. The open pit operation aims to

ensure physical and chemical stability, develop

technologies to revegetate affected areas

where applicable, and implement dewatering

water injection programmes which do not

affect the operation or the environment, in

order to preserve the water resource.

At La Colosa, the sowing of plant and

tree seeds over an area of 8.39ha was

completed and monitoring and maintenance

is currently underway as part of the ecological

compensation programme approved by the

Ministry of Environment in 2014. The water

balance study of the Coello River basin,

where the La Colosa project is located,

undertaken in collaboration with Javeriana

University and IDEAM (the hydrology

and meteorology institute), is expected

to be completed and reviewed in 2017.

Environmental management certiﬁcation, in

terms of ISO 14001, was maintained and

occupational health and safety management

certiﬁcation, in terms of OHSAS 18001, was

extended for three years.

At Gramalote, the project’s environmental

licence was granted in November 2015,

and clariﬁcations to comments and

recommendations submitted by AngloGold

Ashanti (mainly associated with technical

aspects, project deﬁnition, artisanal miners

and resettlement) were received from the

Ministry of Environment in March 2016.

Mining authorisation for the project was

granted in December 2015 and clariﬁcations

to comments and recommendations from the

company (associated with the project schedule

and additional exploration activities) were

received from the Antioquia Secretary of Mines

in October 2016. As a legal requirement,

notiﬁcation of the start of activities contained

in the environmental license was submitted to

the National Environmental Licensing Authority

in November 2016. A response from the

authorities was awaited at year-end.

COMMUNITIES

Constructive community relations reﬂect the

community’s goodwill towards the company

and imply acceptance by the community

of operations and projects. It remains a key

strategic objective to maintain and strengthen

this social licence at all our operations.

In Brazil, social investment in communities

prioritise projects focused on job creation

and income generation, education,

culture and environment. Major projects

implemented include:

•

Communities at tailings dams: In

November 2015, a tailings dam breach at an

operation belonging to Samaro Mineração

S.A., resulted in the single most severe

environmental incident in Brazilian mining

history. AngloGold Ashanti promptly put

in place a plan to liaise with communities,

presenting and discussing the company’s

tailings dam management programme.

Among the various initiatives, highlighted in

public presentations by management, public

questions were addressed.

•

Public call for projects: Social projects

supported by the company are determined

by a committee comprising AngloGold

Ashanti, specialists in social projects and

representatives of communities in line

with open and transparent management

of social investments. The public call for

projects already supports 168 projects in

municipalities neighbouring our operations

and directly beneﬁts more than

22,000 people.

•

Tax incentives: In Brazil, speciﬁc laws

allow the company to invest part of the

income tax in projects approved by the

federal government in areas such as

culture, sport, children and youth, elderly

and disabled people, as well as health

(particularly oncology). In 2015, AngloGold

Ashanti invested around $2 million in these

initiatives, implemented in 2016, for the

beneﬁt of cities surrounding its operations.

•

Volunteering: The Holding Hands

Programme, established in 2004, has

beneﬁted around 28,000 people through

more than 120 activities (3,300 voluntary

participators) over the years. The

programme aims to encourage employees

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

to become involved in and to contribute

to social causes within local municipalities

where the company operates.

•

Good Neighbourhood Programme:

The purpose of the Good Neighbourhood

Programme is to strengthen AngloGold

Ashanti’s relationship and dialogue with

communities in Brazil, including regular

meetings and publication of a special

printed newspaper. A toll-free hotline (0800)

also receives grievances and complaints.

In Argentina, Cerro Vanguardia has engaged

with the community of San Julián since the

beginning of the operation more than 20 years

ago. The operation’s engagement strategy is

based on permanent and continuous dialogue

with all local institutions and organisations

as well as local and provincial authorities. In

2004, a development agency was established

in collaboration with the mine, local and

provincial authorities, the university, the rural

association and the Chamber of Commerce.

The work of this agency has been ﬁnanced

by the mine since its inception. In 2016, an

agreement signed in 2010 was renewed,

assigning funds contributed by the mine

annually, working with the development

agency and the city of San Julián. Projects

undertaken during the year included, among

others, completing the refurbishment of the

Racing Club of San Julián, and contributing to

projects approved by the development agency,

such as the Greenhouse orchards and farms,

a woven wire factory, the manufacture of work

clothes, and workshops to wash trucks.

In Colombia, a key aspect in developing

the business is the award of social and

environmental licences to build and operate

viable mineral discoveries. Continuous

engagement, or social political enablement

(SPE), is a business imperative. During 2016,

SPE engagement included projects and

activities to establish social infrastructure,

education, small and medium enterprise

support, and strengthening of public

institutions, among others. All of these projects

and activities were developed in

co-operation with communities.

At Gramalote, the company continues to

develop the co-existence programme with

artisanal miners, as part of the company’s

commitment to its license to operate in line

with the environmental licence granted for

the project, which will be implemented in

accordance with company standards, and

environmental licences and permits.

Another key programme at Gramalote is

support of sugar cane farming by investing

in improving farmers’ skills, developing better

business practices and increasing knowledge

of beneﬁts and duties resulting from

formalisation of business activities.

At La Colosa, social investment programmes

continued to advance according to plan.

The most relevant projects included

reintroducing regional youth to farming,

making livestock quality more competitive and

the establishment of an agricultural business

centre. The social investment strategy aims to

support productive regional vocations while

demonstrating that the project is responsible

by supporting water conservation.

At Nuevo Chaquiro, activities such as Mining

Wednesday, home visits and mining meetings

remained key to Project Raise Awareness,

promoting trust within the urban community

of Jerico. Efforts continued in the rural areas

of Jerico to educate local residents and,

ultimately, to achieve consensus around land

access for exploration and study work. With

the project advancing to prefeasibility in 2017,

these programmes are expected to accelerate

with community engagement and vocational

support, as at La Colosa and Gramalote.

R E G I O N A L R E V I E W S

( C O N T I N U E D )

A m e r i c a s

Picture:

Gramalote, Colombia

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

PRODUCTION METRICS

Attributable tonnes treated/milled (Mt)

2016

2015

2014

2013

2012

South Africa

39.6

36.8

38.4

39.2

22.2

Vaal River

Great Noligwa

(1)

0.4

0.5

Kopanang

0.6

0.7

0.8

1.0

0.9

Moab Khotsong

1.0

0.9

0.7

0.6

West Wits

Mponeng

1.1

0.8

1.1

1.6

1.3

Savuka

(2)

0.2

TauTona

(2)

0.6

0.8

0.9

1.0

0.8

Surface Operations

Surface Operations

(3)

36.4

33.6

34.5

17.9

Continental Africa

28.2

27.2

29.9

26.9

27.8

DRC

Kibali (45%)

(4)

3.9

3.1

2.5

0.4

Ghana

Iduapriem

5.1

4.7

4.9

4.8

4.6

Obuasi

(5)

–

1.0

2.2

1.7

2.1

Guinea

Siguiri (85%)

10.3

10.0

10.1

10.2

10.1

Mali

Morila (40%)

1.5

1.2

1.3

1.4

1.8

Sadiola (41%)

2.0

2.1

2.0

1.9

Yatela (40%)

(6)

0.9

1.0

1.1

Namibia

Navachab

(7)

0.7

1.4

Tanzania

Geita

5.4

5.2

4.0

4.8

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

Attributable tonnes treated/milled (Mt)

2016

2015

2014

2013

2012

Australasia

8.9

8.2

7.8

4.3

3.4

Australia

Sunrise Dam

4.0

3.9

3.8

3.4

Tropicana (70%)

(4)

4.8

4.3

4.0

0.9

Americas

7.0

6.8

5.9

4.8

Argentina

Cerro Vanguardia (92.5%)

2.9

3.1

3.0

2.3

1.7

Brazil

AGA Mineração

2.8

2.6

2.5

2.3

2.2

Serra Grande

(8)

1.3

0.9

CONTINUING OPERATIONS

83.7

79.1

82.9

76.3

58.2

Discontinued operations

Cripple Creek & Victor

(9)

11.3

19.3

20.8

20.9

Total

83.7

90.4

102.2

97.1

79.1

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(2)

In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit.

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Yatela mine in closure from 2015.

(7)

Sold effective 30 June 2014.

(8)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(9)

Sold effective 3 August 2015.

PRODUCTION METRICS

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

100

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

PRODUCTION METRICS

(continued)

Average grade recovered (g/t)

Attributable gold production (000oz)

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

South Africa

967

1,004

1,223

1,302

1,212

Vaal River

Great Noligwa

(1)

6.44

6.15

5.72

Kopanang

5.09

5.43

5.55

5.23

5.40

117

140

178

164

Moab Khotsong

9.05

8.50

11.04

9.47

8.16

280

254

234

212

162

West Wits

Mponeng

7.90

8.44

8.99

7.10

9.40

254

219

313

354

405

Savuka

(2)

6.09

TauTona

(2)

7.59

8.46

8.21

7.34

7.63

146

209

232

235

189

Surface Operations

Surface Operations

(3)

0.16

0.18

0.20

0.22

0.30

186

193

223

240

172

Technology

Technology

Continental Africa

1,321

1,435

1,597

1,460

1,521

DRC

Kibali (45%)

(4)

2.10

2.93

2.95

3.41

264

289

237

Ghana

Iduapriem

1.30

1.27

1.13

1.43

1.22

214

193

177

221

180

Obuasi

(5)

–

1.47

4.67

4.94

4.79

243

239

280

Guinea

Siguiri (85%)

0.79

0.80

0.89

0.82

0.76

259

255

290

268

247

Mali

Morila (40%)

0.45

1.24

1.06

1.23

1.41

Sadiola (41%)

1.09

1.04

1.28

1.34

1.64

100

Yatela (40%)

(6)

0.59

0.93

1.06

Namibia

Navachab

(7)

1.44

1.39

1.59

Tanzania

Geita

2.74

3.18

2.86

3.54

3.47

489

527

477

459

531

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

101

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

Average grade recovered (g/t)

Attributable gold production (000oz)

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

Australasia

520

560

620

342

258

Australia

Sunrise Dam

1.98

1.97

2.13

2.46

2.39

228

216

262

276

258

Tropicana (70%)

(4)

1.87

2.48

2.78

2.40

292

344

358

Americas

820

831

785

770

706

Argentina

Cerro Vanguardia (92.5%)

7.45

6.88

6.08

6.58

6.48

281

278

246

241

219

Brazil

AGA Mineração

5.31

5.63

5.65

5.70

6.07

407

421

403

391

388

Serra Grande

(8)

3.17

3.27

3.28

3.42

3.36

132

136

138

CONTINUING OPERATIONS

3,628

3,830

4,225

3,874

3,697

Discontinued operations

Cripple Creek & Victor

(9)

0.35

0.32

0.34

0.40

117

211

231

247

Total

3,628

3,947

4,436

4,105

3,944

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(2)

In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit.

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Yatela mine in closure from 2015.

(7)

Sold effective 30 June 2014.

(8)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(9)

Sold effective 3 August 2015.

PRODUCTION METRICS

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

102

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

PRODUCTIVITY (oz/TEC)

2016

2015

2014

2013

2012

South Africa

3.56

3.74

4.40

4.47

4.19

Vaal River

Great Noligwa

(1)

2.69

2.51

2.34

Kopanang

1.82

2.41

2.68

3.11

2.61

Moab Khotsong

3.82

3.44

4.74

4.22

3.05

West Wits

Mponeng

4.02

3.48

4.74

5.33

6.33

Savuka

(2)

3.98

TauTona

(2)

2.49

3.70

4.17

4.01

4.03

Surface Operations

Surface Operations

(3)

7.82

8.12

8.95

9.35

9.86

Continental Africa

20.70

20.61

14.36

9.97

10.97

DRC

Kibali (45%)

(4)

63.86

72.34

68.50

83.56

Ghana

Iduapriem

17.36

16.32

20.14

18.41

15.61

Obuasi

(5)

–

5.76

6.10

4.10

5.19

Guinea

Siguiri (85%)

15.40

14.59

15.64

12.88

12.10

Mali

Morila (40%)

10.19

15.98

10.13

17.88

35.72

Sadiola (41%)

13.97

13.46

14.23

10.56

12.27

Yatela (40%)

(6)

10.73

10.21

8.82

Namibia

Navachab

(7)

6.97

5.63

6.43

Tanzania

Geita

20.94

27.78

19.50

15.55

19.20

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

103

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

2016

2015

2014

2013

2012

Australasia

46.81

55.84

62.00

49.64

43.46

Australia

Sunrise Dam

44.96

45.09

58.29

50.22

43.46

Tropicana (70%)

(4)

48.36

65.69

65.03

47.37

Americas

13.98

15.05

14.38

14.25

14.72

Argentina

Cerro Vanguardia (92.5%)

22.05

22.82

21.14

20.89

18.21

Brazil

AGA Mineração

12.36

13.58

13.03

12.97

14.22

Serra Grande

(8)

10.13

10.97

11.32

11.19

11.45

CONTINUING OPERATIONS

8.97

9.50

9.30

7.77

7.66

Discontinued operations

Cripple Creek & Victor

(9)

29.63

33.33

37.45

37.46

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(2)

In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit.

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Yatela mine in closure from 2015.

(7)

Sold effective 30 June 2014.

(8)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(9)

Sold effective 3 August 2015.

PRODUCTIVITY (oz/TEC)

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

104

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

COSTS

Total cash costs

($/oz produced)

All-in sustaining costs

(10)

($/oz sold)

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

South Africa

896

881

849

850

873

1,081

1,088

1,064

1,120

1,189

Vaal River

Great Noligwa

(1)

1,074

1,100

1,226

1,185

1,305

1,530

Kopanang

1,324

1,014

1,023

918

1,015

1,555

1,226

1,256

1,255

1,497

Moab Khotsong

729

798

685

797

1,040

884

1,018

903

1,223

1,634

West Wits

Mponeng

779

874

746

719

639

1,011

1,170

981

1,016

883

Savuka

(2)

1,041

1,607

TauTona

(2)

1,148

883

882

920

924

1,345

1,044

1,059

1,149

1,316

Surface Operations

Surface Operations

(3)

899

912

941

883

943

1,004

1,006

1,153

969

754

Continental Africa

717

678

783

869

830

904

815

968

1,202

1,235

DRC

Kibali (45%)

(4)

740

609

578

471

893

642

588

529

Ghana

Iduapriem

908

995

865

861

955

950

1,020

1,025

1,437

Obuasi

(5)

167

966

1,086

1,406

1,187

440

1,185

1,374

2,214

2,201

Guinea

Siguiri (85%)

784

827

799

918

938

915

965

917

1,085

1,105

Mali

Morila (40%)

1,123

698

1,162

773

767

1,337

815

1,298

1,051

765

Sadiola (41%)

991

818

1,028

1,334

1,169

1,066

886

1,133

1,510

1,249

Yatela (40%)

(6)

1,438

1,530

1,758

1,795

1,653

1,888

Namibia

Navachab

(7)

752

691

1,036

719

781

1,329

Tanzania

Geita

530

480

599

515

427

844

717

890

833

816

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

105

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

Total cash costs

($/oz produced)

All-in sustaining costs

(10)

($/oz sold)

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

Australasia

793

702

804

1,047

1,211

1,067

875

986

1,376

1,680

Australia

Sunrise Dam

926

970

1,105

1,110

1,126

1,080

1,110

1,214

1,321

1,470

Tropicana (70%)

(4)

630

492

545

568

970

671

752

1,113

Americas

578

576

676

653

680

875

792

974

1,011

1,099

Argentina

Cerro Vanguardia (92.5%)

563

625

692

622

576

773

873

938

912

935

Brazil

AGA Mineração

562

518

644

646

696

893

712

966

1,023

1,114

Serra Grande

(8)

634

635

748

719

821

1,020

861

1,062

970

1,168

CONTINUING OPERATIONS

744

712

785

836

842

986

910

1,020

1,195

1,285

Discontinued operations

Cripple Creek & Victor

(9)

894

829

732

638

1,030

1,147

927

817

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(2)

In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit.

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Yatela mine in closure from 2015.

(7)

Sold effective 30 June 2014.

(8)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(9)

Sold effective 3 August 2015. Numbers included to the date of disposal.

(10)

Excludes stockpile write-offs.

COSTS

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

106

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

CAPITAL EXPENDITURE ($m)

2016

2015

2014

2013

2012

South Africa

182

206

264

451

583

Vaal River

Great Noligwa

(1)

Kopanang

Moab Khotsong

117

159

West Wits

Mponeng

171

195

Savuka

(2)

TauTona

(2)

Surface Operations

Surface Operations

(3)

Technology

Technology

Continental Africa

291

315

454

839

925

DRC

Kibali (45%)

(4)

124

179

341

263

Mongbwalu (86.22%)

Ghana

Iduapriem

Obuasi

(5)

196

185

Guinea

Siguiri (85%)

Mali

Morila (40%)

Sadiola (41%)

Yatela (40%)

Namibia

Navachab

(6)

Tanzania

Geita

119

116

129

154

216

Other and non-controlling interests

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

107

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

2016

2015

2014

2013

2012

Australasia

109

285

369

Australia

Sunrise Dam

Tropicana (70%)

(4)

241

315

Other

–

Americas

225

196

225

253

309

Argentina

Cerro Vanguardia (92.5%)

Brazil

AGA Mineração

122

127

123

162

Serra Grande

(7)

Other and non-controlling interests

Other

CONTINUING OPERATIONS

811

799

1,040

1,836

2,222

Discontinued operations

Cripple Creek & Victor

(8)

169

157

100

Sub-total

811

857

1,209

1,993

2,322

Equity-accounted investments

(100)

(131)

(191)

(411)

(303)

Total

711

726

1,018

1,582

2,019

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(2)

In 2013, Savuka and TauTona were combined under TauTona as one cash generating unit.

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash generating unit.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Sold effective 30 June 2014.

(7)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(8)

Sold effective 3 August 2015.

CAPITAL EXPENDITURE ($m)

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

108

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

AVERAGE NO. OF EMPLOYEES (PERMANENT AND CONTRACTOR EMPLOYEES)

2016

2015

2014

2013

2012

South Africa

28,507

28,325

29,511

32,406

34,186

Vaal River

Great Noligwa

(1)

2,207

2,731

3,063

Kopanang

4,055

4,052

4,424

5,365

6,014

Moab Khotsong

6,310

6,469

4,573

5,692

6,645

West Wits

Mponeng

6,105

6,249

6,737

6,516

6,262

Savuka

(2)

1,157

TauTona

(2)

4,723

4,656

4,712

5,256

4,472

Surface Operations

Surface Operations

(3)

3,140

2,929

3,058

2,142

1,874

Other

4,174

3,970

3,800

4,704

4,699

Continental Africa

12,691

11,942

16,070

16,625

16,621

DRC

Kibali (45%)

(4)

2,180

2,061

2,245

158

Ghana

Iduapriem

1,576

1,565

1,352

1,590

1,549

Obuasi

(5)

766

856

3,541

5,194

5,373

Guinea

Siguiri (85%)

3,509

3,445

3,494

3,673

3,643

Mali

Morila (40%)

324

389

500

390

319

Sadiola (41%)

588

585

654

810

783

Yatela (40%)

(6)

226

367

407

Namibia

Navachab

(7)

793

938

953

Tanzania

Geita

3,748

3,041

3,265

3,504

3,594

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

109

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

2016

2015

2014

2013

2012

Australasia

925

836

832

925

494

Australia

Sunrise Dam

422

400

374

457

494

Tropicana (70%)

(4)

503

436

458

468

Americas

8,126

7,679

7,441

7,542

7,204

Argentina

Cerro Vanguardia (92.5%)

1,877

1,687

1,640

1,696

1,884

Brazil

AGA Mineração

4,662

4,546

4,398

4,377

4,239

Serra Grande

(8)

1,587

1,446

1,403

1,469

1,081

Other, including corporate and non-gold producing subsidiaries

2,400

2,731

3,056

8,104

6,625

CONTINUING OPERATIONS

52,649

51,513

56,910

65,602

65,130

Discontinued operations

Cripple Creek & Victor

(9)

753

1,147

832

692

Total

52,649

52,266

58,057

66,434

65,822

(1)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(2)

In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit.

(3)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013. The 2014 number for Kibali includes 3,249 employees who were working on projects.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Yatela mine in closure from 2015.

(7)

Sold effective 30 June 2014.

(8)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(9)

Sold effective 3 August 2015. Employee numbers included to the date of disposal.

AVERAGE NO. OF EMPLOYEES (PERMANENT AND CONTRACTOR EMPLOYEES)

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

110

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

SAFETY

All injury frequency rate

(1)

Number of fatalities

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

South Africa

12.02

10.81

11.85

12.63

13.24

Vaal River

Great Noligwa

(2)

15.44

12.06

17.72

Kopanang

21.37

17.50

13.56

17.58

19.92

Moab Khotsong

12.58

13.54

18.62

16.35

17.14

West Wits

Mponeng

15.77

13.37

16.33

17.86

14.49

Savuka

(3)

21.23

TauTona

(3)

17.97

11.88

12.60

14.16

10.63

Surface Operations

Surface Operations

(4)

5.63

5.14

5.42

5.08

6.71

Other

Continental Africa

0.51

0.50

1.56

1.97

2.26

DRC

Mongbwalu

1.98

6.15

4.47

Ghana

Iduapriem

0.42

0.00

1.06

1.98

3.08

Obuasi

(5)

0.30

1.28

3.01

2.39

2.13

Guinea

Siguiri

0.13

0.39

0.64

1.09

Mali

Sadiola

1.56

0.51

0.50

1.28

2.21

Yatela

2.34

0.95

0.00

0.36

Namibia

Navachab

(6)

6.39

5.58

8.22

Tanzania

Geita

0.39

0.47

0.51

0.98

1.62

See footnotes overleaf

I N T E G R AT E D R E P O RT

2 0 1 6

111

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

All injury frequency rate

(1)

Number of fatalities

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

Australasia

9.49

8.56

10.73

7.91

6.33

Australia

Sunrise Dam

8.24

11.59

12.54

11.19

5.46

Tropicana

(7)

10.87

6.80

9.96

8.60

15.75

Americas

3.96

5.61

3.79

4.74

5.20

Argentina

Cerro Vanguardia

2.39

1.63

1.40

0.58

1.72

Brazil

AGA Mineração

3.46

5.51

4.22

5.94

5.82

Serra Grande

(8)

8.05

9.49

4.53

6.10

5.15

Colombia

2.56

1.64

0.32

2.51

4.43

United States

Cripple Creek & Victor

19.47

9.54

9.89

12.75

Greenﬁeld exploration

2.52

7.96

3.57

4.20

6.76

AngloGold Ashanti

7.71

7.18

(9)

7.36

7.48

7.83

(1)

Per million hours worked.

(2)

Great Noligwa and Moab Khotsong are treated as one cash-generating unit from 1 January 2015.

(3)

In 2013, Savuka and TauTona were combined under TauTona as one cash-generating unit.

(4)

For the purposes of this report, Surface Operations includes MWS, which is operated and managed as a separate cash-generating unit.

(5)

Obuasi was placed on limited operations at the end of 2014. In 2016, Obuasi was on care and maintenance.

(6)

Sold effective 30 June 2014.

(7)

Tropicana began production in the fourth quarter of 2013.

(8)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

(9)

All injury frequency rate for the group adjusted for the earthquake impact is 7.15.

SAFETY

(continued)

I N T E G R AT E D R E P O RT

2 0 1 6

112

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

ENVIRONMENTAL PERFORMANCE

(1)

Energy usage (PJ)

Water usage (ML)

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

South Africa

10.54

10.65

11.31

11.80

11.43

23,161

25,182

27,219

27,228

23,813

Vaal River

(2)

4.87

(6)

4.89

5.31

5.63

5.87

12,275

13,259

13,402

14,331

14,748

West Wits

(2)

4.93

5.03

5.24

5.55

5.57

4,411

3,949

2,626

3,160

4,501

Mine Waste Solutions

0.74

0.73

0.76

0.62

0.21

6,475

7,974

11,191

9,737

4,564

Continental Africa

8.46

(6)

8.41

(6)

9.47

12.01

12.13

11,911

16,931

17,582

21,031

19,132

Ghana

Iduapriem

1.02

0.89

0.62

1.25

1.00

936

750

342

795

582

Obuasi

(3)

0.30

0.56

1.46

1.77

1.74

–

3,129

3,696

3,685

3,820

Guinea

Siguiri

2.58

(6)

2.50

(6)

2.36

2.31

2.34

3,395

5,145

5,375

6,478

4,650

Mali

Sadiola

1.40

1.59

2.10

2.17

3,940

4,625

4,051

4,330

3,837

Yatela

0.10

0.12

0.24

0.52

0.70

254

1,578

Namibia

Navachab

(3)

0.74

0.75

1,005

990

Tanzania

Geita

3.07

2.93

3.21

3.32

3.43

3,637

3,249

4,101

4,484

3,675

Australasia

5.62

5.14

5.52

2.81

2.08

7,577

6,648

6,749

3,925

1,700

Australia

Sunrise Dam

2.03

1.97

2.29

2.07

2.08

1,779

1,771

1,866

1,829

1,700

Tropicana

(4,5)

3.59

3.17

3.23

0.74

5,798

4,877

4,883

(5)

2,097

See footnotes overleaf

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

Energy usage (PJ)

Water usage (ML)

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

Americas

3.94

4.86

6.04

6.06

5.91

8,067

10,839

12,170

11,732

7,456

Argentina

Cerro Vanguardia

1.76

1.69

1.71

1.72

1.59

1,152

1,121

1,079

964

923

Brazil

AGA Mineração

1.64

1.53

1.48

1.41

1.35

5,292

5,959

6,233

6,346

4,213

Serra Grande

0.54

0.48

0.51

0.48

1,623

1,506

1,921

1,380

459

United States

Cripple Creek & Victor

1.16

2.37

2.42

2.46

2,252

2,937

3,042

1,860

AngloGold Ashanti

28.55

(6)

29.06

(6)

32.34

32.68

31.74

50,716

59,601

63,720

63,916

52,101

(1)

Refer to the

<SDR>

for deﬁnitions of these environmental indicators.

(2)

These include consumption by Surface Operations’ facilities located in these areas.

(3)

Sold effective 30 June 2014.

(4)

Excludes pre-production water use at Tropicana.

(5)

Tropicana began production in the fourth quarter of 2013.

(6)

Restated due to error in source data for 2014 and 2015.

ENVIRONMENTAL PERFORMANCE

(1)

(continued)

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

GHG emissions (000t CO

No. of reportable environmental incidents

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

South Africa

2,864

2,756

2,981

3,025

3,009

Vaal River

(2)

1,282

(5)

1,232

1,360

1,415

1,482

West Wits

(2)

1,375

1,331

1,420

1,445

1,473

Mine Waste Solutions

207

193

201

165

Continental Africa

682

(5)

694

(5)

824

969

978

Ghana

Iduapriem

108

113

Obuasi

198

199

197

Guinea

Siguiri

194

(5)

189

(5)

178

175

177

Mali

Sadiola

104

118

156

161

Yatela

Namibia

Navachab

(3)

Tanzania

Geita

228

218

238

246

254

Australasia

336

359

174

125

Australia

Sunrise Dam

113

116

135

123

125

Tropicana

(4)

223

220

224

ENVIRONMENTAL PERFORMANCE

(1)

(continued)

See footnotes overleaf

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

GHG emissions (000t CO

No. of reportable environmental incidents

2016

2015

2014

2013

2012

2016

2015

2014

2013

2012

Americas

180

375

449

399

389

Argentina

Cerro Vanguardia

120

115

118

119

111

Brazil

AGA Mineração

Serra Grande

United States

Cripple Creek & Victor

204

281

233

235

AngloGold Ashanti

4,062

(5)

4,162

(5)

4,613

4,567

4,501

(1)

Refer to the

<SDR>

for deﬁnitions of these environmental indicators.

(2)

These include consumption by Surface Operations’ facilities located in these areas.

(3)

Sold effective 30 June 2014.

(4)

Tropicana began production in the fourth quarter of 2013.

(5)

Restated due to error in source data.

ENVIRONMENTAL PERFORMANCE

(1)

(continued)

I N T E G R AT E D R E P O RT

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116

Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

SOCIAL PERFORMANCE

(1)

Community investment ($000)

2016

2015

2014

2013

2012

South Africa

(2)

4,584

6,288

8,073

8,391

7,700

Continental Africa

7,562

6,008

3,933

13,279

13,341

Ghana

Iduapriem

202

134

148

302

465

Obuasi

204

208

1,197

2,007

Corporate ofﬁce

–

Guinea

Siguiri (85%)

1,706

501

220

1,326

1,083

Mali

Morila (40%)

198

Sadiola (41%) and Yatela (40%)

449

241

175

126

572

Namibia

Navachab

(3)

201

Tanzania

Geita

4,176

3,757

1,973

5,489

4,834

DRC

Kibali (45%)

(4)

959

1,129

654

4,140

976

Mongbwalu (86.22%)

430

584

2,935

Australasia

552

344

247

463

464

Australia

Sunrise Dam

552

344

247

301

464

Tropicana

(4)

–

125

See footnotes overleaf

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

F I V E - Y E A R S T A T I S T I C S B Y O P E R A T I O N

( C O N T I N U E D )

O p e r a t i o n a l , f i n a n c i a l a n d s u s t a i n a b i l i t y s t a t i s t i c s

Community investment ($000)

2016

2015

2014

2013

2012

Americas

9,016

4,159

3,659

5,761

5,148

Argentina

Cerro Vanguardia (92.5%)

5,814

712

1,223

1,096

1,520

Brazil

AGA Mineração

1,758

1,574

712

1,297

813

Serra Grande

(5)

383

142

153

472

719

Colombia

1,053

1,154

993

1,905

1,188

United States

Cripple Creek & Victor

577

578

991

908

Sub-total

21,715

16,799

15,912

27,894

26,653

Equity-accounted investments

(1,559)

(1,571)

(1,113)

(5,358)

(1,746)

AngloGold Ashanti

20,156

15,228

14,799

22,536

24,907

(1)

Refer to the

<SDR>

for the deﬁnition of this social indicator.

(2)

Community investment at the South African operations is aggregated and is overseen via the corporate entity and includes corporate community investment.

(3)

Sold effective 30 June 2014.

(4)

Kibali and Tropicana began production in the fourth quarter of 2013.

(5)

AngloGold Ashanti’s holding increased to 100% (from 50%) from 1 July 2012.

SOCIAL PERFORMANCE

(1)

(continued)

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

T h e M i n e r a l R e s o u r c e a n d O r e

R e s e r v e f o r A n g l o G o l d A s h a n t i

L i m i t e d ( A n g l o G o l d A s h a n t i ) a r e

r e p o r t e d i n a c c o r d a n c e w i t h t h e

m i n i m u m s t a n d a r d s d e s c r i b e d b y

t h e S o u t h A f r i c a n C o d e f o r t h e

R e p o r t i n g o f E x p l o r a t i o n R e s u l t s ,

M i n e r a l R e s o u r c e s a n d M i n e r a l

R e s e r v e s ( T h e S A M R E C C o d e ,

2 0 1 6 e d i t i o n ) , a n d a l s o c o n f o r m

t o t h e s t a n d a r d s s e t o u t i n t h e

A u s t r a l a s i a n C o d e f o r R e p o r t i n g

o f E x p l o r a t i o n R e s u l t s , M i n e r a l

R e s o u r c e s a n d O r e R e s e r v e s

( J O R C C o d e , 2 0 1 2 E d i t i o n ) .

The Mineral Resource is inclusive of the

Ore Reserve component unless otherwise

stated. In complying with revisions to the

SAMREC code the changes to AngloGold

Ashanti’s Mineral Resource and Ore Reserve

have been reviewed and it was concluded

that none of the changes are material to the

overall valuation of the company. AngloGold

Ashanti has therefore once again resolved not

to provide the detailed reporting as deﬁned in

Table 1 of the code. The company will, however,

continue to provide the high level of detail it has

in previous years in order to comply with the

transparency requirements of the code.

AngloGold Ashanti strives to actively create

value by growing its major asset – the Mineral

Resource and Ore Reserve. This drive is

based on active, well-deﬁned brownﬁelds

and greenﬁelds exploration programmes,

innovation in both geological modelling and

mine planning and continual optimisation of

the asset portfolio.

M I N E R A L R E S O U R C E A N D O R E R E S E R V E – S U M M A R Y

Local prices of gold

South Africa

Australia

Brazil

Argentina

ZAR/kg

AUD/oz

BRL/oz

ARS/oz

2016 Ore Reserve

530,000

1,500

4,041

14,969

2016 Mineral Resource

663,819

1,817

4,414

21,531

The SAMREC and JORC Codes require the use of reasonable economic assumptions.

These include long-range commodity price and exchange rate forecasts which are prepared

in-house using a range of techniques, including historic price averages.

G O L D P R I C E

The following local prices of gold were used as a basis for estimation in the December 2016

declaration:

2016 Ore Reserve – gold price

1,100

/oz

2016 Mineral Resource – gold price

1,400

/oz

Picture:

Kibali, DRC

I N T E G R AT E D R E P O RT

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

M I N E R A L R E S O U R C E A N D O R E R E S E R V E – S U M M A R Y

( C O N T I N U E D )

M I N E R A L R E S O U R C E

The total Mineral Resource increased

from 207.8Moz in December 2015 to

214.7Moz in December 2016. A gross

annual increase of 11.3Moz occurred

before depletion, while the net increase

after allowing for depletion is 6.9Moz.

Changes in economic assumptions

from December 2015 to December

2016 resulted in a 1.7Moz increase to

the Mineral Resource, while exploration

and modelling resulted in an increase

of 10.0Moz. Depletion from the Mineral

Resource for the year totalled 4.4Moz.

The Mineral Resource has been

estimated at a gold price of US$1,400/oz

(2015: US$1,400/oz).

MINERAL RESOURCE

Moz

Mineral Resource as at 31 December 2015

207.8

Depletions

(4.4)

Sub-total

203.4

Additions

Obuasi

A new geological model, the revalidated database and a revised

estimation methodology resulted in the signiﬁcant increase

5.5

Mponeng

Surface and underground exploration of the VCR horizon added
signiﬁcant Mineral Resource

2.2

Tropicana

Exploration additions in Havana South, Tropicana and Boston
Shaker and increases due to a drop in mining cost

1.5

Sunrise Dam

Increase due to successful exploration drilling, gold price
increase and methodology changes

1.3

AGA Mineracão

Mainly the result of open pit gains at Rosalino, some
underground additions at Cuiabá and Córrego do Sítio, the
positive results from surface drilling at Carvoaria and reduced
costs at Lamego

1.2

Siguiri

Attributed to cost reduction, inﬁll drilling at Seguelen, Bidini,
Tubani and Kami and the inclusion of mineralised waste

0.9

Geita

Gains due to updates of the underground Mineral Resource
models and a decrease in costs

0.9

Other

Additions less than 0.5Moz

0.9

Sub-total

217.8

Reductions

Moab Khotsong

Changes due to a Mineral Resource clean-up, a value drop and
a revised structural interpretation

(1.0)

Kibali

Change due to a revised geological model and the constraining
of the underground Mineral Resource into optimised stope
shapes

(0.8)

TauTona

Mainly due to value changes and transfers out of Mineral Resource

(0.6)

Kopanang

Resulting from movements out of Mineral Resource and a value
drop resulting from a revised estimation approach

(0.6)

Other

Reductions less than 0.5Moz

(0.1)

Mineral Resource as at 31 December 2016

214.7

Rounding of numbers may result in computational discrepancies.

Picture:

AGA Mineração, Brazil

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

O R E R E S E R V E

The AngloGold Ashanti Ore Reserve

reduced from 51.7Moz in December

2015 to 50.1Moz in December 2016. This

gross annual decrease of 1.6Moz includes

depletion of 3.9Moz. The balance of 2.3Moz

additions in Ore Reserve, results from

changes in economic assumptions between

2015 and 2016 of 0.2Moz, while exploration

and modelling changes resulted in further

additions of 2.3Moz. Other factors resulted

in a 0.3Moz decrease. The Ore Reserve

has been estimated using a gold price of

US$1,100/oz (2015: US$1,100/oz).

M I N E R A L R E S O U R C E A N D O R E R E S E R V E – S U M M A R Y

( C O N T I N U E D )

ORE RESERVE

Moz

Ore Reserve as at 31 December 2015

51.7

Depletions

(3.9)

Sub-total

47.8

Additions

Tropicana

Introduction of the Long Island project philosophy and costs
and the HA04 pit

1.1

AGA Mineração

Ore Reserve variation due to change in costs and revenue
factor as well as minor mining method and revised estimation
techniques changes

0.6

Siguiri

Mainly due to model changes

0.5

Sunrise Dam

Increase due to revised drill spacing requirements. Vogue ore
body had large increase due to the drill spacing change and
additional diamond drilling

0.4

Other

Additions less than 0.3Moz

0.9

Sub-total

51.3

Reductions

Kibali

Decrease is the result of a new geological model

(0.3)

Other

Reductions less than 0.3Moz

(0.9)

Ore Reserve as at 31 December 2016

50.1

Rounding of numbers may result in computational discrepancies.

ORE RESERVE reconciliation 2015 vs. 2016

Total (attributable)

Ounces (millions)

51.7

2015

-2.9

Depletion

1.3

Exploration

1.0

Methodology

0.1

Gold price

0.2

Cost

-0.1

Geotechnical

0.1

Metallurgical

-0.5

Other

50.1

2016

0.2

Revenue

factor

Picture:

Serra Grande, Brazil

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Strategy

Performance review

Accountability

Shareholder information

M I N E R A L R E S O U R C E A N D O R E R E S E R V E – S U M M A R Y

( C O N T I N U E D )

B Y- P R O D U C T S

Several by-products will be recovered as a result

of processing of the gold Ore Reserve. These

include 56.0kt of uranium oxide from the South

African operations, 0.42Mt of sulphur from Brazil

and 18.2Moz of silver from Argentina.

C O R P O R AT E G O V E R N A N C E

AngloGold Ashanti has established a

Mineral Resource and Ore Reserve Steering

Committee (RRSC), which is responsible for

setting and overseeing the company’s Mineral

Resource and Ore Reserve governance

framework and for ensuring that it meets

the company’s goals and objectives while

complying with all relevant regularity codes.

Its membership and terms of references are

mandated under a policy document signed off

by the Chief Executive Ofﬁcer.

Over more than a decade, the company has

developed and implemented a rigorous system

of internal and external reviews aimed at

providing assurance in respect of Ore Reserve

and Mineral Resource estimates. The following

operations were subject to an external review

in line with the policy that each operation

project will be reviewed by an independent

third party on average once every three years:

•

Mineral Resource and Ore Reserve at South

African Surface Operations

•

Mineral Resource and Ore Reserve at AGA

Mineração – Córrego do Sítio

•

Mineral Resource and Ore Reserve at Sadiola

The external reviews were conducted by AMEC,

Optiro and Snowden respectively. Certiﬁcates

of sign-off have been received for the ﬁrst

two audits from the companies conducting

the external reviews to state that the Mineral

Resource and/or Ore Reserve comply with the

SAMREC and JORC Codes. A signed NI 43-101

report was provided in the case of Sadiola.

In addition, numerous internal Mineral Resource

and Ore Reserve process reviews were

completed by suitably qualiﬁed Competent

Persons from within AngloGold Ashanti and

no signiﬁcant deﬁciencies were identiﬁed.

The Mineral Resource and Ore Reserve are

underpinned by appropriate Mineral Resource

Management processes and protocols that

ensure adequate corporate governance.

These procedures have been developed to

be compliant with the guiding principles of the

Sarbanes-Oxley Act of 2002 (SOX).

AngloGold Ashanti makes use of a web

based group reporting database called the

Resource and Reserve Reporting System

(R3) for the compilation and authorisation

of Mineral Resource and Ore Reserve

reporting. It is a fully integrated system for

the reporting and reconciliation of Mineral

Resource and Ore Reserve that supports

various regulatory reporting requirements

including the SEC and the JSE under

SAMREC. AngloGold Ashanti uses R3 to

ensure a documented chain of responsibility

exists from the Competent Persons at the

operations to the company’s RRSC.

AngloGold Ashanti has also developed an

enterprise-wide risk management tool that

provides consistent and reliable data that

allows for visibility of risks and actions across

the group. This tool is used to facilitate, control

and monitor material risks to the Mineral

Resource and Ore Reserve, thus ensuring

that the appropriate risk management and

mitigation plans are in place.

C O M P E T E N T P E R S O N S

The information in this report relating to

exploration results, Mineral Resources

and Ore Reserves is based on information

compiled by or under the supervision of

the Competent Persons as deﬁned in the

SAMREC or JORC Codes. All Competent

Persons are employed by AngloGold Ashanti,

except for Kibali and Morila, and have

sufﬁcient experience relevant to the style

of mineralisation and type of deposit under

consideration and to the activity which they

are undertaking. The Competent Persons

consent to the inclusion of Exploration

Results, Mineral Resource and Ore Reserve

information in this report, in the form and

context in which it appears. The legal tenure

of each operation and project has been

veriﬁed to the satisfaction of the accountable

Competent Person and all Ore Reserves have

been conﬁrmed to be covered by the required

mining permits or there exists a realistic

expectation that these permits will be issued.

This is detailed in the 2016 Mineral Resource

and Ore Reserve document.

Accordingly, the Chairman of the Mineral

Resource and Ore Reserve Steering

Committee, VA Chamberlain, MSc (Mining

Engineering), BSc (Hons) (Geology), MGSSA,

FAusIMM, assumes responsibility for the

Mineral Resource and Ore Reserve processes

for AngloGold Ashanti and is satisﬁed that

the Competent Persons have fulﬁlled their

responsibilities. VA Chamberlain has 29 years’

experience in exploration and mining and is

employed full-time by AngloGold Ashanti and

can be contacted at the following address:

76 Rahima Moosa Street, Newtown, 2001,

South Africa.

A detailed breakdown of Mineral Resource

and Ore Reserve and backup detail will be

provided on the AngloGold Ashanti website

www.anglogoldashanti.com and www.aga-

reports.com.

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Strategy

Performance review

Accountability

Shareholder information

M I N E R A L R E S O U R C E A N D O R E R E S E R V E – S U M M A R Y

( C O N T I N U E D )

MINERAL RESOURCE BY REGION (ATTRIBUTABLE) INCLUSIVE OF ORE RESERVE

Gold as at 31 December 2016

Tonnes

Grade

Contained gold

Category

million

g/t

tonnes

Moz

South Africa

Measured

151

1.99

301

Indicated

902

1.99

1,794

Inferred

15.04

436

Total

1,082

2.34

2,531

Continental Africa Measured

1.09

Indicated

504

2.77

1,399

Inferred

162

3.36

544

Total

702

2.82

1,983

Australasia

Measured

1.08

Indicated

113

2.02

230

Inferred

1.92

Total

193

1.85

357

Americas

Measured

3.41

168

Indicated

1,044

0.96

1,001

Inferred

908

0.70

638

Total

2,002

0.90

1,807

AngloGold

Ashanti total

Measured

267

2.03

542

Indicated

2,564

1.73

4,424

142

Inferred

1,148

1.49

1,713

Total

3,980

1.68

6,678

215

Rounding of numbers may result in computational discrepancies.

MINERAL RESOURCE BY REGION (ATTRIBUTABLE) EXCLUSIVE OF ORE RESERVE

Gold as at 31 December 2016

Tonnes

Grade

Contained gold

Category

million

g/t

tonnes

Moz

South Africa

Measured

14.24

204

Indicated

227

3.64

826

Inferred

14.58

175

Total

253

4.76

1,205

Continental Africa Measured

3.29

Indicated

283

3.07

869

Inferred

161

3.37

544

Total

446

3.18

1,417

Australasia

Measured

0.67

Indicated

1.85

133

Inferred

1.92

Total

129

1.80

233

Americas

Measured

3.38

121

Indicated

1,032

0.90

925

Inferred

907

0.70

631

Total

1,974

0.85

1,677

AngloGold

Ashanti total

Measured

5.64

335

Indicated

1,613

1.71

2,752

Inferred

1,130

1.28

1,444

Total

2,802

1.62

4,532

146

Rounding of numbers may result in computational discrepancies.

Mineral Resource (inclusive)
Contained gold

215

Moz

Mineral Resource (exclusive)
Contained gold

146

Moz

Mineral Resource
(inclusive) grade

1.68

g/t

Mineral Resource
(exclusive) grade

1.62

g/t

Mineral Resource (inclusive)
Contained gold

increase

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M I N E R A L R E S O U R C E A N D O R E R E S E R V E – S U M M A R Y

( C O N T I N U E D )

ORE RESERVE BY REGION (ATTRIBUTABLE)

Gold as at 31 December 2016

Tonnes

Grade

Contained gold

Category

million

g/t

tonnes

Moz

South Africa

Proved

139

0.57

Probable

689

1.02

703

Total

828

0.94

782

Continental Africa Proved

0.73

Probable

217

2.45

531

Total

247

2.24

553

Australasia

Proved

1.23

Probable

2.32

Total

1.94

124

Americas

Proved

2.67

Probable

4.54

Total

3.69

AngloGold

Ashanti total

Proved

204

0.79

161

Probable

962

1.45

1,396

Total

1,165

1.34

1,557

Rounding of numbers may result in computational discrepancies.

Ore Reserve contained gold

Moz

Ore Reserve grade

1.34

g/t

Picture:

Gramalote, Colombia

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E X P L O R AT I O N

A n g l o G o l d A s h a n t i ’s e x p l o r a t i o n

p r o g r a m m e c o v e r s G r e e n f i e l d s

a n d B r o w n f i e l d s p r o j e c t s , f o c u s e d

o n c r e a t i n g s i g n i f i c a n t v a l u e f o r

t h e c o m p a n y b y p r o v i d i n g l o n g -

t e r m o p t i o n a l i t y a n d i m p r o v i n g t h e

p o r t f o l i o q u a l i t y.

During 2016, the exploration expenditure

amounted to $144m (including equity

accounted investments), which included over

54km of diamond (DD), reverse circulation (RC)

and aircore (AC) drilling. Our exploration work

involves achieving the following objectives:

•

Greenﬁelds exploration, which aims to

discover large, high-value Mineral Resource

that will eventually lead to the development

of new gold mines. AngloGold Ashanti’s

Greenﬁelds exploration team is recognised

as the industry’s most successful in

Mineral Resource discovery by SNL

, a

leading industry research group. The team

has a proven track record that includes

the discovery of world-class ore bodies

In Colombia at La Colosa, Gramalote,

and Nuevo Chaquiro; and in Australia at

Tropicana. These discoveries are attributed

to our committed and professional team

of geoscientists working on a portfolio of

highly prospective and rigorously prioritised

Greenﬁelds ground holdings.

•

Brownﬁelds exploration which focuses

on delivering value through incremental

additions to Ore Reserves in existing mines

as well as new discoveries in deﬁned areas

around existing operations. Brownﬁelds

exploration actively drives the creation

of value by growing our major asset, the

Mineral Resource and Ore Reserve. The

brownﬁelds exploration programme is based

on innovation in geological modelling and

mine planning, and continual optimisation of

our asset portfolio.

SNL 2016 Strategies for Gold Reserves

Replacement, best for the period studied from

2001-2015, page 16.

GREENFIELDS EXPLORATION

Our greenﬁelds exploration covers more than

9,000km

of highly-prospective ground in three

countries; Australia, Colombia and Brazil, and

also has small ground positions in Tanzania,

the United States and Argentina. Greenﬁelds

also initiated focused generative activities in

countries with operational synergies.

In Australia, in the Laverton district, AC drilling

was completed over numerous AngloGold

Ashanti-held targets with 617 holes drilled for a

total of 40,719m. Drilling encountered strong

carbonate-sericite ± silica alteration with

minor pyrite or arsenopyrite in several holes

with brecciated quartz veins also observed.

Several encouraging results from both Ahab

and Pioneer were received. The positive AC

samples from Pioneer were followed-up by six

P L A N N I N G F O R T H E F U T U R E

O U R P L A N N I N G F O R
T H E F U T U R E E N C O M PA S S E S
T H E F O L L O W I N G :

EXPLORATION

This is aimed at ensuring that we have

available a pipeline of Mineral Resource

and Ore Reserve, both at our existing

operations and at new projects, with

the potential to be developed into future

mining operations to ensure the long-

term sustainability of our business.

TECHNOLOGY AND INNOVATION

We invest in the skills and technology

necessary to enable us to access and

exploit, safely and cost efﬁciently, the

extensive deep-level Mineral Resource

which will ensure the long-term future of

our South African operations.

CLOSURE AND REHABILITATION

Given that mining operations exploit a

non-renewable resource, we include

planning for mine closure right from

the start of a mining project. Our

closure planning takes into account

our environmental remediation and

our estimate of social obligations that

follow on from the cessation of mining

operations and closure. All our mining

operations and projects have closure

plans in place.

Picture:

Gramalote, Colombia

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P L A N N I N G F O R T H E F U T U R E

( C O N T I N U E D )

RC holes with three DD tails (702m/471m) and

results of this drilling will be available in early

in 2017.

In late 2016 the Butcher Well and Lake

Carey farm-in agreement was signed

between AngloGold Ashanti and Saracen

Mineral Holdings Limited. AngloGold Ashanti

has acquired earn-in rights for 340km

tenements on and along the western margin

of Lake Carey in the Laverton district of

Western Australia, including those hosting the

historically-mined Butcher Well gold deposits.

AngloGold Ashanti can earn up to 70% of the

joint venture by spending A$15m within 48

months from commencement date and get

51%, and a further A$10m within 24 months

thereafter. The conditions precedent for the

agreement were met on 22 December 2016,

and the ﬁrst phase of drilling at Butcher Well

is expected to commence in the ﬁrst quarter

of 2017.

At the Strawbridge Project in Western

Australia, the planned AC drilling programme

was completed with 257 AC holes drilled for a

total of 12,770m. Results at Strawbridge from

the AC drilling and geochemical sampling in

2016 returned no signiﬁcant results.

In Colombia, drilling was completed at the

Guintar project (AngloGold Ashanti 100%)

situated 40km west of Medellin. Three DD

holes for 1,219 m were drilled on epithermal

targets above a potential buried porphyry.

Several narrow (2-6m) intervals of anomalous

gold mineralisation >1g/t were intersected.

A re-evaluation of the regional geology

at Guintar, identiﬁed subtle multi-element

epithermal signatures in gravels associated

with N-S trending graben structures. Follow-up

exploration at this new target, Nuevo Guintar,

indicates a potentially preserved epithermal

target. Detailed mapping, soil sampling

and ground geophysics was completed to

delineate drill targets.

In Brazil, the greenﬁelds exploration team

signed a new farm-in and JV agreement with

Luna Gold to explore a ~2,000km

tenement

package, located in the Maranhão state of

Brazil. Under the terms of the agreement,

AngloGold Ashanti can spend $14m over four

years to earn a 70% interest in the tenements,

which includes a minimum commitment of $2m.

The JV ofﬁcially initiated in August and regional

mapping and soil sampling programmes were

completed.11 200km of a high resolution

aeromagnetic and radiometric survey were

ﬂown. In parallel, considerable effort has also

been placed on obtaining environmental permits

for planned drilling expected to start in the ﬁrst

quarter of 2017.

In Tanzania, Guinea, Argentina and the United

States, early stage grassroots evaluation and

reconnaissance programmes progressed.

BROWNFIELDS EXPLORATION

Brownﬁelds exploration was carried out in ten

countries, in and around AngloGold Ashanti

operations. A total of 656,350m of DD and RC

drilling was completed during the year.

South Africa: Exploration in the South Africa

region continued with three holes being drilling

at Mponeng’s Western Ultra Deep Levels

(WUDLs). Surface drill holes UD59, UD60 and

UD58A all intersected the VCR during the

year with only UD58A continuing to drill as it

completes its short deﬂection programme.

UD61 and UD63 will start in 2017.

Argentina: At Cerro Vanguardia, drilling

programmes for Mineral Resource creation

and delineation continued during the year

with focus on delineating vein extensions

along strike and at depth in the Cerro

Vanguardia tenements. Mapping, trenching

and channel sampling continued as part of the

reconnaissance programme to identify new

drilling targets. In 2016, a new exploration

earn-in project started in the Claudia

concessions located to the south of the mine.

Work completed at Claudia included mapping,

sampling, geophysics, and initial phase drilling

RC and DD drilling.

Brazil: In the Iron Quadrangle, the

underground drilling programmes for depth

extension related Mineral Resource conversion

continued at both the Cuiabá and Lamego

mines. At Cuiabá, additional drilling was

directed toward satellite mineralisation

bodies that may be accessible from existing

infrastructure. The surface drilling programmes

at the Córrego do Sítio mine continued to inﬁll

and expand oxide Mineral Resource while the

underground programme added extensions to

several ore bodies.

At Serra Grande, exploration drilling continued

to delineate the Inga mineralised structure.

A new mineralised structure called Mangaba

was discovered during the year through

underground drilling and will be followed

up. Geophysical surveys and soil sampling

campaigns continued as part of the target

generation program for the district.

Colombia: Exploration in the Gramalote

area continued with programmes in and

around the Gramalote Central deposit to

complete inﬁll drilling on the saprolite

horizon. Regionally, limited drilling

programmes were also conducted within

the joint venture area.

At La Colosa, the emphasis on other project

related drilling continued with support

to geotechnical, hydrological and site

infrastructure studies.

The Quebradona project work was directed

toward metallurgical and infrastructure drilling

studies during the year.

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P L A N N I N G F O R T H E F U T U R E

( C O N T I N U E D )

Tanzania: Drilling activities included inﬁll drilling

at Nyankanga Block 5 UG (Cut 9), Nyankanga

Cut 7 and 8, Star & Comet Cut 3, Geita Hill

East Cut 2, and Mineral Resource delineation

drilling at Star & Comet UG (Cut 2 and 3)

and Geita Hill East UG. A total of 28,573m

exploration drilling was completed, comprising

10,783m DD from surface, 10,407m

underground DD, and 7,383m RC drilling.

Routine geological pit mapping continued at

Nyankanga Cut 7 and 8, Geita Hill East and

West as well as Star & Comet Underground. In

addition, a review of the preliminary geological

interpretations of Kukuluma and Matandani

was conducted. Detailed mapping was also

conducted at Selous, ahead of planned drill-

testing of this target.

The 3D Seismic Survey data acquisition within

the central Geita area was successfully and an

interpretation session of the initial processed

data was conducted during December. A ﬁnal

interpretation and targeting session on site is

planned for the ﬁrst quarter of 2017.

Guinea: Exploration drilling focused on inﬁll

and reconnaissance drilling at Seguelen, Bidini,

Tubani, Kami, Silakoro, Soloni, Kalamagna

PB2, Boukaria West and Balato NE. A total

of 57,974m was drilled during the year,

comprising 3,336m DD, 7,894m RCDD,

43,714m RC, and 3,030m AC drilling. Other

exploration activities included geochemical

soil sampling, geometallurgical investigations,

and the completion of LIDAR and airborne

geophysical surveys.

Ghana: No exploration was conducted at

Obuasi. Exploration at Iduapriem focused

on inﬁll drilling at Block 7&8, Mineral

Resource delineation drilling at Block 4S and

reconnaissance drilling at the Bankyem (Block 1

East), Block 1 West, Mile 5 and Nueng targets.

A total of 11,316m was drilled, comprising

8,275m DD and 3,041m RC. Soil geochemical

surveys were also completed over various target

areas as part of a lease-scale programme.

Democratic Republic of the Congo: Drilling

at Kibali totalled 28,111m, of which 19,434m

was mine based drilling and 8,677m was on

regional targets. Of the 28,111m DD drilling

comprised 6,660m with the remaining being

RC drilling. The exploration aimed to fulﬁl

three main objectives: Mineral Resource-

Ore Reserve replacement, potential oxide

displacement ounces, and identify and

develop new targets.

Mine based exploration took place at the

Rhino-Agbarabo-Kombokolo area, Pakaka,

Pamao, Tete Bakangwe, Kanga Sud, Ndala

Village, Aerodrome and Sessenge Southwest,

regional exploration was focused on the

Kalimva-Ikamva targets in the north, Memekazi

Ridge, and the Aindi Watsa-Dilolo-Zambula

targets in the south.

Mali: A total of 21,383m of exploration drilling

was completed at Sadiola, comprising of

20,671m RC and 712m DD. Reconnaissance

drilling for oxides concentrated on FNa,

FNb-c and FN3 along the Sadiola North East

mineralisation trend, FE2S, Voyager East and

FE1W. While inﬁll and deeper Mineral Resource

delineation drilling targeted primarily SSP North

and Tambali in support of the Sadiola Sulphide

Project (SSP).

Australia: Underground Mineral Resource

development drilling continued at Sunrise

Dam throughout the year. Exploration DD

focused primarily on increasing Indicated

Mineral Resource (primarily in Vogue South),

Reconnaissance drilling in Vogue Deeps

and Mineral Resource creation drilling in

the Carey Shear. Underground RC drilling

continued to focus on converting the

Indicated Mineral Resource into a minable

Grade Control block model for use in stope

development designs. Key DD drilling

platforms have started being developed,

which will be utilised over the life of mine to

drill test exploration targets along the strike

length of the deposit.

At Tropicana, the Long Island 100m x 100m

drilling programme to test the strike extent and

down-dip extensions of the known mineralised

system at Tropicana was completed during

December, 2016. In the period, additional

closer spaced drilling was undertaken at

Boston Shaker to achieve Indicated Mineral

Resource classiﬁcation, and minor inﬁll drill

programmes were completed at Tropicana,

Havana and Havana South. A total of

35,618m of RC and 55,516m of DD drilling

were completed.

Regional brownﬁelds exploration based out

of TGM consisted of AC, RC and DD drilling

totalling 50,083m. In detail, this consisted of

29,927m of AC, 9,971m of RC and 3,852m

of DD drilling. A number of encouraging Au

assay results were intercepted from RC and

AC drilling at the Sanpan, Voodoo Child,

Madras, Angel Eyes, Paradise and New

Zebra prospects, with results at the newly

established New Zebra prospect particularly

signiﬁcant and drilling at Tumbleweed

producing disappointing results.

Data from the seismic survey completed over

the Crouching Tiger and Havana South areas

merged with the 2014 Tropicana-Havana

seismic survey. Currently work is focusing on

interpretation of the merged seismic survey

model to identify potential strike and down-

dip extensions to the Tropicana gold system.

A signiﬁcant re-interpretation of the structural

architecture of the belt was developed

and delivered a considerable pipeline of

exploration targets.

More detail on the company’s exploration

work for the year is included under the

Exploration updates on the website at

www.anglogoldashanti.com.

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T E C H N O L O G Y A N D I N N O VAT I O N

The Technology Innovation

Consortium has as its aim the

design of next generation mining

methods, equipment and processes.

This involves a step change in the technology

required to enable AngloGold Ashanti to mine

safely, at deeper levels of 5,000m and more

below surface, and to create a signiﬁcant

improvement in and extend the lives of

current operations.

The consortium’s long-term objective is to

safely extract all of the gold, only the gold, all

of the time, by boring out the high-grade reef

and leaving behind the waste.

Work to date has focused on clear stage-

gates for reef boring, ore body knowledge and

the ultra-high strength backﬁll project, with the

ultimate aim of achieving the desired machine

and system efﬁciencies. There was pleasing

progress in 2016 towards the overall objective

of enabling the mechanical extraction of gold-

bearing reefs where it is being tested in the

deep-level South African mines.

Progress made in 2016 and the highlights of

the project are set out below.

REEF BORING – SMALL RANGE

As planned, the Sandvik/Cubex machine was

commissioned in 2016 at the Savuka section

of the TauTona mine but due to technical

challenges faced during the stage gate reviews,

the programme had to be discontinued and the

machine will be decommissioned.

REEF BORING – MEDIUM RANGE:

MK IV Machine Test site

During 2016 the MK IV machine was

commissioned in the test site at TauTona and

has drilled 23 holes, with four holes drilled in

the fourth quarter of 2016. It was determined

that the quality of the holes regressed due

to the self-pinning cylinders failing during the

drilling cycle. This caused the machine to veer

off the planned trajectory. Several new designs

were investigated with the OEM Atlantis and

improvements are ongoing. The addition of

active sensors/pegs veriﬁed the potential of

the machine to orientate, locate and direct

itself to the next drilling position.

A decision was made to designate the MKIV

for all research and development trials and

to ensure that design targets are met on this

proto-type machine prior to any further reef

boring machine purchases taking place. These

trials will include the results from the integrity

test and furthermore improvements on the

active peg system, hydro-transport, self-pinning

cylinders and in hole cleaning. A structural

integrity test was conducted by a company

specialising in this ﬁeld of work to determine

the integrity of the machine with the report

scheduled for ﬁnalisation in the ﬁrst quarter in

2017, upon which decisions regards potential

alterations or design changes will be made.

MK III Machines

Carbon Leader Reef (CLR) prototype site

Drilling continued with three MK III machines

in the CLR block, machines drilled 33 holes

in the ﬁrst half of the year. At the end of the

second quarter, geotechnical concerns resulted

in a revised extraction strategy that resulted in

the loss of some current mining ground and

consequently the reduction of one machine.

Ventersdorp Contact Reef (VCR) prototype site

After a premature failure of the 980mm reamer,

a decision was made to continue drilling with

the 660mm reamer. Work will continue to

enhance the design of the 980mm reamer.

Seven holes were drilled in the fourth quarter

of 2016.

During the year, an MK III machine was

installed in the VCR site and drilling

commenced in third quarter after

commissioning. The usual teething problems

associated with a commissioning process

were resolved.

Work will continue at both sites in a stage

gate approach as more is learnt about the

machines from trials as well as from the

integrity test. The aim is to achieve consistent

performance to prove the economic viability of

the project.

ORE BODY KNOWLEDGE AND EXPLORATION

The year started with the ﬁnal accuracy trial

on the Sandvik/Cubex machine. The aim was

to improve the targeted accuracy. Analysis

of the holes drilled and results indicated that

they did follow a similar trend, implying that a

correction factor could be applied to ensure

an accurate end point is reached. Drilling

trials with the Bohrmeister ﬁt-for-purpose drill

rig commenced in the fourth quarter after its

commissioning at TauTona. The ﬁrst stage

gates were met when four holes had been

drilled at the set drilling target rate (8m/hr) and

hole depth (100m) at different inclinations. After

the compressor started losing pressure, the

trial was stopped for repairs to the unit. This

machine was replaced with the ﬁt-for-purpose

Bohrmeister drill rig during the fourth quarter.

Drilling for the next stage gate will begin in the

ﬁrst half of 2017. This stage gate will aim to

improve on the accuracy of the drilled holes.

In-hole surveying for data collection

remains a technical challenge and design

modiﬁcations on the deployment mechanism

are currently underway.

ULTRA-HIGH STRENGTH BACKFILL

To date, two ultra-high strength backﬁll

(UHSB) plants were successfully

commissioned; one plant at the CLR site and

the other at the VCR site at TauTona. These

plants are in full operation and have the

capability to mix the dry tailings underground

with other ingredients, thereafter pumping

the ﬁnal product at 4m³/hour over a distance

of 600m.

Engineering construction and equipping

of the Savuka CLR plant and the TauTona

P L A N N I N G F O R T H E F U T U R E

( C O N T I N U E D )

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P L A N N I N G F O R T H E F U T U R E

( C O N T I N U E D )

B120 plant will commence as soon as the

site excavation has been completed in the

ﬁrst half of 2017. Construction of the surface

solution plant was completed In the fourth

quarter of 2016. This plant is expected to

allow for pumping the UHSB solution (UHSB

product excluding cement) from surface to

the B120 plant underground.

Mponeng extraction ratio improvement

project product development is in progress.

A range of designs have been tested and the

characteristics modelled by rock engineering.

Final results are pending before a suitable

product can be identiﬁed.

R E H A B I L I TAT I O N A N D C L O S U R E

R e h a b i l i t a t i o n a n d c l o s u r e m a k e

u p t h e f i n a l s t a g e i n t h e m i n i n g

p r o c e s s , o n c e a l l t h e g o l d - b e a r i n g

o r e h a s b e e n d e p l e t e d a n d m i n e d

o u t , t h a t i s w h e n t h e l i f e o f m i n e

h a s e n d e d .

This happens as mines eventually exhaust

their economically viable resources and mining

operations cease. Although ﬁnalisation of this

stage comes at the end of the mine life, at

AngloGold Ashanti planning for mine closure

is incorporated into our mine plans at the start

of the exploration stage. We then continually

revise the processes and plans to adapt to

any relevant changes that may be applicable

during the life of mine. Once mining activities

cease, the ﬁnal closure plan is implemented.

Responsible closure planning follows a holistic

approach, taking into account all aspects of

pre-operational planning, operational activities

and post-closure activity.

The approach for many of our older mines is to

incorporate closure considerations into existing

operational plans as far as possible, to reduce

operating and ﬁnal closure costs and to mitigate

the socio-economic impacts of closure. To

support this goal, we apply a comprehensive

closure planning management standard and

guidelines that offer practical assistance to

operations on how to apply the standard.

The purpose of the closure management

standard is to facilitate the design and

implementation of closure plans to the extent

possible during the life of a mine.

In our newer operations, planning for

closure begins at mine conception and is

incorporated in mine design – in essence,

new mines are designed with closure in mind.

Social considerations are also addressed, as

communities close to the mine may be affected

by closure. The closure planning standard

provides for continuing community engagement

and the development, where possible, of

alternative livelihoods to mitigate the impact

of closure. The objectives for overall closure,

including social and workforce aspects, are

clearly identiﬁed in closure plans, as these guide

the deﬁnition of applicable options.

Our approach to the rehabilitation process

is governed by our land use and biodiversity

management standards and adapted for

site-speciﬁc requirements. These standards

include legal compliance as a minimum. We

have set out some speciﬁc examples of the

rehabilitation and closure processes and/or

plans under the regional reviews. Concurrent

rehabilitation is undertaken where feasible,

balanced against the need to avoid limiting

access to resources in the future.

REMEDIATION OBLIGATIONS AND PROVISIONS

The company’s long-term environmental

remediation obligations include

decommissioning and restoration liabilities

relating to past operations. These obligations

are based on an operation’s Environmental

Management Plan and the relevant

regulatory requirements. An assessment

of closure liabilities is undertaken annually

and these liabilities are presented in the

table overleaf.

Provisions for remediation costs are made

when there is a present obligation, when it

is probable that expenditure on remediation

work will be required and when the cost

can be estimated within a reasonable range

of possible outcomes. These costs are

based on information currently available,

the technology expected to be available

at the time of the clean-up, the expected

time-frame for remediation, laws and

regulations presently or virtually certain to

be enacted, and previous experience of

remediation. Provision for restoration and

decommissioning costs is made at the

present value of the expenditures expected

to settle the obligation using estimated cash

ﬂows based on current prices and discounted

at a pre-tax rate that reﬂects current market

assessments of the time value of money.

Picture:

Varkenslaagte, West Wits, South Africa

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P L A N N I N G F O R T H E F U T U R E

( C O N T I N U E D )

REHABILITATION LIABILITIES PER OPERATION ($ MILLION)

Operation

2016

2015

Restoration Decommissioning

Total

South Africa

14.8

80.4

95.2

95.3

Kopanang

1.1

12.1

13.2

13.6

Moab Khotsong

(1)

4.2

29.1

33.3

37.5

TauTona

(2)

3.6

11.9

15.5

14.0

Mponeng

2.6

5.5

8.1

5.9

Legacy projects

- Vaal River

–

4.2

4.7

- West Wits

–

0.3

- Other

0.2

–

0.2

0.3

First Uranium SA

3.1

16.4

19.5

18.2

Nufcor

–

0.9

0.8

Continental Africa

261.7

168.1

429.8

425.1

Ghana

Iduapriem

35.7

8.3

44.0

41.5

Obuasi

(3)

154.0

62.2

216.2

209.8

Guinea

Siguiri

28.1

27.9

56.0

61.2

Mali

(4)

Morila

–

7.0

8.6

Sadiola

14.7

12.5

27.2

26.6

Yatela

4.5

10.1

14.6

14.2

DRC

Kibali

(4)

–

9.5

7.0

Tanzania

Geita

24.7

30.6

55.3

56.2

Operation

2016

2015

Restoration Decommissioning

Total

Australasia

42.5

28.9

71.4

61.4

Australia

Sunrise Dam

19.7

10.0

29.7

30.3

Tropicana

22.8

18.9

41.7

31.1

Americas

108.1

41.0

149.1

137.5

Argentina

Cerro Vanguardia

45.8

17.5

63.3

60.3

Brazil

AGA Mineração

44.9

16.5

61.4

58.0

Serra Grande

9.6

7.0

16.6

14.1

United States of America

Cripple Creek & Victor & Other

0.5

–

0.5

Colombia

La Colosa

7.0

–

7.0

4.6

Gramalote

(4)

0.3

–

0.3

–

Other

3.7

–

3.7

6.0

430.8

318.4

749.2

725.3

Less equity-accounted

investments included above

(4)

(4.9)

(39.1)

(44.0)

(42.2)

425.9

279.3

705.2

683.1

(1)

Includes Great Noligwa.

(2)

Includes

Savuka.

(3)

Includes Mpasatia (Bibiani pit).

(4)

The equity-accounted investments refer to the Mali assets, Kibali in the DRC and Gramalote in Colombia.

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Shareholder information

Both production and cost estimates assume neither operational or labour interruptions or power disruptions, nor changes to asset portfolio and/or operating mines and have not been reviewed by our

external auditors. Other unknown or unpredictable factors could also have material adverse effects on our future results and no assurance can be given that any expectations expressed by AngloGold

Ashanti will prove to have been correct. Please refer to the Risk Factors section in AngloGold Ashanti’s annual report on Form 20-F for the year ended 31 December 2016, ﬁled with the United States

Securities and Exchange Commission.

T H E Y E A R A H E A D – O U T L O O K

GUIDANCE 2017

Guidance

Notes

Production

(000oz)

3,600 – 3,750

•

Obuasi on care and maintenance with no production anticipated in 2017.

•

Note that there is, as always, a strong negative impact expected in the ﬁrst

half of the year given the slow start-up in South Africa following the holiday

break, and interruptions around the Easter break.

Costs

All-in sustaining costs ($/oz)

1,050 – 1,100

Assumptions: R14.25/$, $/A$0.75, BRL3.40/$, APS16.50/$; Brent $58/bl

Total cash costs ($/oz)

750 – 800

Overheads

Corporate costs ($m)

80 – 90

Inﬂation and retention of critical skills and skills development

Expensed exploration and study costs ($m)

170 – 190

Including equity-accounted joint ventures

Capital expenditure

Total ($m)

950 – 1,050

Sustaining ($m)

830 – 900

Stay-in-business, Ore Reserve development and asset integrity. Increase in

sustaining capital expenditure at Geita, AGA Mineração and Sunrise Dam

Non-sustaining ($m)

120 – 150

Includes project capital for projects at Siguiri, Kibali, Sadiola and Mponeng

Depreciation and amortisation

($m)

850

Depreciation and amortisation – included in

equity-accounted earnings

($m)

125

Earnings of associates and joint ventures

Interest and ﬁnance costs – income statement

($m)

140

Interest and ﬁnance costs – cash ﬂow

($m)

135

Affected by timing of coupon payments

Other operating expenses

($m)

Primarily includes the costs of care and maintenance relating to Obuasi

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S E C T I O N 5

L E A D E R S H I P A N D A C C O U N T A B I L I T Y

The board /

133

Executive management /

134

Audit and Risk Committee:

chairman’s letter /

135

Corporate governance /

138

Remuneration and Human Resources

Committee: chairman’s letter /

145

Remuneration report /

147

Approvals and assurances /

170

In this section, we review our

performance and philosophy regarding

corporate governance, remuneration and

assurance of the information presented.

Picture: Mponeng, South Africa

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T H E B O A R D

LENGTH OF
SERVICE ON
THE BOARD

•

Less than three years

•

From three to eight years

•

More than eight years

HDSAs

•

HDSA

•

Other South Africans

•

Non-South Africans

INDEPENDENT NON-EXECUTIVE DIRECTORS

1. Sipho Pityana

(Chairman)

Wiseman Nkuhlu
(Deputy chairman)

Albert Garner

Rhidwaan Gasant

Dave Hodgson

Nozipho January-Bardill

Michael Kirkwood

Maria Richter

Rodney Ruston

EXECUTIVE DIRECTORS

10.

Srinivasan Venkatakrishnan
(Chief Executive Ofﬁcer)

11. Christine Ramon

(Chief Financial Ofﬁcer)

COMPANY SECRETARY

12. Maria Sanz Perez

T h e o v e r r i d i n g r o l e o f

A n g l o G o l d A s h a n t i ’s b o a r d

o f d i r e c t o r s i s t o e n s u r e

t h e l o n g - t e r m s u s t a i n a b i l i t y

a n d s u c c e s s o f t h e b u s i n e s s ,

f o r t h e m u t u a l b e n e f i t o f

a l l s t a k e h o l d e r s .

7 3 % 2 7 %

M a l e F e m a l e

G e n d e r b r e a k d o w n o f t h e b o a r d

Picture:

Geita, Tanzania

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E X E C U T I V E M A N A G E M E N T

LENGTH OF
SERVICE BY
EXECUTIVE
MANAGEMENT

•

Less than five years

•

From five to ten years

•

More than ten years

HDSAs

•

HDSA

•

Other South Africans

•

Non-South Africans

Srinivasan Venkatakrishnan
(Chief Executive Ofﬁcer)

Christine Ramon

(Chief Financial Ofﬁcer)

Chris Sheppard

Charles Carter

Graham Ehm

Ron Largent

David Noko

Maria Sanz Perez

Tirelo Sibisi

A n g l o G o l d A s h a n t i ’s e x e c u t i v e

m a n a g e m e n t t e a m ( E x e c u t i v e

C o m m i t t e e ) c o m p r i s e s n i n e

m e m b e r s o f w h o m t w o a r e

e x e c u t i v e d i r e c t o r s .

This committee oversees the day-to-day

management of the group’s activities

and is supported by country and regional

management teams as well as by group

corporate functions.

6 7 % 3 3 %

M a l e F e m a l e

G e n d e r b r e a k d o w n o f
e x e c u t i v e m a n a g e m e n t

Picture:

Mponeng, South Africa

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A U D I T A N D R I S K C O M M I T T E E – C H A I R M A N ’ S L E T T E R

Rhidwaan Gasant

Chairman: Audit and Risk Committee

othing has come to the attention

of the Audit and Risk Committee

to make it believe that the systems

of internal control and internal control over

ﬁnancial reporting are not adequate in its

design and effective in its operation to provide

management with a sound basis to prepare

ﬁnancial reports which are reliable and free

of material misstatement. The Audit and

Risk Committee has based its conclusion

in this regard on the reports received from

external audit, internal audit and executive

management through the combined

assurance process.

View CV

QUARTER ONE

•

Evaluated the performance of the external auditors and nominated the appointment of EY

as external auditors to the shareholders after considering the length of tenure as auditors

•

Assessed the expertise and experience of the Chief Financial Ofﬁcer and the ﬁnance function

•

Reviewed and recommended to the board the quarterly results for Quarter 4 2015

•

Reviewed and approved the 2015 integrated report for recommendation to the board

•

Reviewed and approved the annual ﬁnancial statements and Form 20-F for 2015

•

Reviewed and approved the internal audit charter and performance objectives for 2016

•

Reviewed and recommended for approval the annual Mineral Resource and Ore Reserve Report

•

Assessed management’s assessment of impairments of assets and goodwill

•

Considered the dividend proposal put forward by management

•

Considered the results of the self-assessment results of the committee

•

Considered and approved the move from quarterly to interim ﬁnancial reporting

•

Considered and approved the tax management strategy

D I S C H A R G E O F R E S P O N S I B I L I T I E S D U R I N G 2 0 1 6

(Quarters represent calendar quarters)

T h e A u d i t a n d R i s k C o m m i t t e e c a n

c o n f i r m t h a t t h e f i n a n c i a l a n d r i s k

m a n a g e m e n t i n f o r m a t i o n p r o v i d e d

i n t h e I n t e g r a t e d R e p o r t a c c u r a t e l y

r e f l e c t s t h e i n f o r m a t i o n t h a t h a s

b e e n r e p o r t e d t o t h e c o m m i t t e e

b y m a n a g e m e n t .

Picture:

Serra Grande, Brazil

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A U D I T A N D R I S K C O M M I T T E E – C H A I R M A N ’ S L E T T E R

( C O N T I N U E D )

QUARTER TWO

•

Received a technical update on

changes in ﬁnancial reporting standards

•

Received a detailed update from the

Compliance Ofﬁcer on compliance to

legislation and ongoing training

•

Reviewed the global insurance renewal

process and commented on potential

gaps, if any

•

Reviewed and approved the quarterly

market update

QUARTER THREE

•

Reviewed and approved the half-year

market update

•

Considered and approved the external

auditor’s integrated audit plan and

associated fee budget

•

Considered and discussed the company’s

approach in terms of cyber defence

•

Reviewed and approved the interim results

•

Considered the accounting and auditing

matters raised by management and the

external auditors respectively

•

Received a technical update on

changes in ﬁnancial reporting standards

•

Considered asset and other impairments

•

Assessed the basis on which the

company and group was determined to

be a going-concern

QUARTER FOUR

•

Received a detailed update from the

Compliance Ofﬁcer on compliance to

legislation and ongoing training

•

Considered for recommendation to the

board the Group Delegation of Authority

•

Assessed the performance of the SVP:

Group Internal Audit and the internal

audit function

•

Reviewed and approved the quarterly

market update

AT ALL MEETINGS

•

Received reports from:

• Internal audit on its activities

•

Sarbanes-Oxley Compliance on its

activities

•

The Risk Manager and had detailed

discussion on an agreed risk theme

•

The Chief Information Ofﬁcer on the

governance of IT

•

Management on the implementation

of SAP at Geita

• Subsidiary audit committees

•

Internal audit on whistleblowing

reports and outcomes

•

Group Legal Counsel on all material

litigations and the impact on ﬁnancial

reporting

•

The Group Tax Manager on tax

exposures for the group and

management of these

•

Approval of non-audit services

•

Held closed sessions with internal audit,

external audit and management

•

Received an update on JSE listing

requirements

•

Assessed the implementation of the

combined assurance model

Management has established and maintains

internal controls and procedures, which are

reviewed by the Audit and Risk Committee

and reported on through regular reports

to the board. These internal controls and

procedures are designed to identify and

manage, rather than eliminate, the risk of

control malfunction and aims to provide

reasonable but not absolute assurance

that these risks are well managed and that

material misstatements and/or loss will not

materialise. The Audit and Risk Committee

closely monitored the actions implemented

by management during 2016 to enhance

the AngloGold Ashanti combined assurance

model and to ensure integration between the

various in-house assurance providers.

E X T E R N A L A U D I T O R
I N D E P E N D E N C E

In order to safeguard auditor independence,

a formal policy on the approval of all non-

audit related services has been approved

and implemented. In terms of the policy the

Audit and Risk Committee has established

that the sum of the non-audit and tax fees in

a year must not exceed 40% of the sum of

the audit and audit related fees in the year.

The Audit and Risk Committee received a

quarterly update on the tax and non-audit

fees as a percentage of the total audit and

audit related fees and are comfortable that

the external auditor’s independence had not

been jeopardised. During 2016, external audit

Picture:

Geita, Tanzania

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A U D I T A N D R I S K C O M M I T T E E – C H A I R M A N ’ S L E T T E R

( C O N T I N U E D )

fees were made up of audit services ($5.2m),

audit related services ($0.69m), non-audit fees

($0.02m) and tax services ($0.2m).

T R A N S F O R M AT I O N O F T H E
E X T E R N A L A U D I T

In the spirit of AngloGold Ashanti’s

commitment to transformation, the Audit

and Risk Committee closely monitors and

guides the transformation within the context

of the external audit. The current auditors

Ernst & Young Inc. (EY) is a level 1 contributor

and, under the guidance of the Audit and

Risk Committee, certain AngloGold Ashanti

subsidiaries, such as MWS, an entity acquired

in July 2012 for $335m and the Rehabilitation

Trust with a gross asset value of R1.3bn, are

audited by Nexia SAB&T, a level 1 contributor.

In addition, Nexia SAB&T also performs certain

audit work of the South African operations

under the supervision of EY.

P R O C E E D I N G S A N D
P E R F O R M A N C E R E V I E W

During 2016, the Audit and Risk Committee

formally met ﬁve times and all members of the

committee attended the meetings. Details on

attendance can be found on page 141 of

this

<IR>

T H E Y E A R A H E A D

•

Continue to monitor the maturity of the

internal control and internal control over

ﬁnancial reporting environments

•

Continue to monitor key ﬁnancial accounting

and reporting requirements that can impact

on the group

•

Continue to monitor the reﬁnement of the

maturing combined assurance process

of the group, focusing on the successful

integration of the core technical engineering

and mining disciplines into the process

•

Monitor the implementation of SAP at Siguiri

in the Continental Africa region

•

Continue to monitor the management of

key strategic risks by the executive

management team

•

Continue to monitor the activities of internal

audit, external audit, compliance and

whistleblowing

•

Monitor the progress in aligning with the

requirements of King IV

•

Monitor the progress in embedding

new processes and controls to meet

the requirements of the new accounting

standards on Leases applicable from

1 January 2019.

C O N C L U S I O N

The Audit and Risk Committee is satisﬁed

that it has considered and discharged

its responsibilities in accordance with its

mandate and terms of reference during

the year under review. For a more detailed

report on the activities of the Audit and

Risk Committee, refer to the

<AFS>

pages

4 to 8.

Rhidwaan Gasant

Chairman: Audit and Risk Committee

22 March 2017

Picture:

Mponeng, South Africa

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G o o d c o r p o r a t e g o v e r n a n c e i s

a n i n t e g r a l p a r t o f t h e g r o u p ’s

s u s t a i n a b i l i t y. A d h e r e n c e t o t h e

s t a n d a r d s a n d r e c o m m e n d a t i o n s

s e t o u t i n t h e K i n g I I I R e p o r t

a n d o t h e r r e l e v a n t l a w s a n d

r e g u l a t i o n s i s v i t a l t o a c h i e v i n g

o u r s t r a t e g i c p r i o r i t i e s .

Corporate governance forms an overarching

framework in which the business operates and

AngloGold Ashanti is committed to promoting

good governance and ethics within all areas

of the business. To achieve this, the group

continues to enhance and align its governance

structures, policies and procedures to support

its operating environment and strategy.

APPLICATION OF KING III PRINCIPLES

Application of and adherence to the King

III principles continues to be a key focus.

AngloGold Ashanti reviewed its application of

the King III principles against the JSE Listings

Requirements through the Governance

Assessment Instrument tool of the Institute of

Directors in Southern Africa and is satisﬁed that

it has applied the King III principles. A detailed

analysis of the company’s compliance with the

King Code of Governance for South Africa,

dated March 2017, is available on the company’s

website, www.anglogoldashanti.com.

G O V E R N A N C E R E V I E W

The company is governed by a unitary

board of directors, the composition of

which promotes the balance of power and

of authority and precludes any one director

from dominating decision-making. The

board is supported by its committees and

has delegated certain functions to these

committees without abdicating any of its

own responsibilities. This process of formal

delegation involves approved and documented

terms of reference, which are reviewed when

required, or at least annually.

It is the responsibility of the board to

exercise oversight of governance throughout

the organisation. We acknowledge that

sound governance principles and practices

underpin the creation of value and the

sustainability of the business, and are

thus crucial to the achievement of the

business objectives. AngloGold Ashanti

also recognises that strategy, performance,

sustainability and risk are inseparable. Our

values-driven culture and code of ethics

underpins AngloGold Ashanti’s governance

structures and processes, committing the

company to high standards of business

integrity and ethics in all its activities.

The governance of the company is guided

by internal policies and external laws, rules,

regulations and best practice guidelines.

Governance structures and processes

are reviewed regularly and adapted to

accommodate internal developments and to

reﬂect national and international best practices.

T H E B O A R D O F D I R E C T O R S

ROLE OF THE BOARD

The overriding role of the board is to ensure

the long-term sustainability and success

of the business, for the mutual beneﬁt of

all stakeholders. Its overall role is one of

strategic leadership. This includes the setting,

monitoring and review of strategic targets and

objectives, the approval of capital expenditure,

acquisitions and disposals, and oversight

of governance, internal controls and risk

management. The duties, responsibilities

and powers of the board, the delegation of

authority and matters reserved for the board’s

authority are all set out in the board charter,

which is available on the company’s website,

www.anglogoldashanti.com.

COMPOSITION OF THE BOARD OF DIRECTORS

Board membership at year-end comprised

eleven directors, nine independent non-

executive directors and two executive

directors. The independence of non-executive

directors is contingent upon an evaluation as

prescribed by King III.

The board appointed Wiseman Nkuhlu as

Deputy Chairman in March 2014. The principal

role of the Deputy Chairman is to act when the

board Chairman is not present or is unable to

perform his duties for any other reason, and

to serve as liaison between the non-executive

directors and the board Chairman.

The group’s Chief Executive Ofﬁcer, Srinivasan

Venkatakrishnan, is responsible for the

execution of the company’s strategy and

reports to the board. He chairs the Executive

Committee that comprises nine members, and

is responsible for the day-to-day management

of the group’s affairs. The committee’s

work is supported by country and regional

management teams as well as by group

corporate functions.

The group has a Chief Financial Ofﬁcer.

This position is held by Christine Ramon. As

required by the JSE Listings Requirements,

the Audit and Risk Committee annually

considers and expresses its satisfaction at

the level of expertise and experience of the

Chief Financial Ofﬁcer.

The Audit and Risk Committee concluded

that Christine Ramon, together with other

members of the ﬁnancial management team,

had effectively and efﬁciently managed the

group’s ﬁnancial affairs during the period

under review as detailed in the Chief

Financial Ofﬁcer’s report, which is included

in the

<AFS>

C O R P O R A T E G O V E R N A N C E

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C O R P O R A T E G O V E R N A N C E

( C O N T I N U E D )

APPOINTMENT AND ROTATION OF DIRECTORS

New directors are appointed pursuant to

the recommendations of the Nominations

Committee, which conducts a rigorous

assessment of the credentials of each

candidate. Several factors including the

requirements of relevant legislation, best

practice recommendations, qualiﬁcations and

skills of prospective board members and the

requirements of the Directors’ Fit and Proper

Standards of the company, as well as regional

demographics are considered in appointing

board members.

During the year, the board approved a policy

on the promotion of gender diversity at board

level which aims to ensure that at least 30%

of the board comprises of women when the

composition of the board and succession

planning is considered. In line with the gender

diversity policy, the board announced the

appointment of Sindi Zilwa as an independent

non-executive director with effect from 1 April

2017, subject to shareholder approval at the

next annual general meeting (AGM).

In terms of the company’s Memorandum of

Incorporation (MOI), one third of the directors

are required to retire at each annual general

meeting and, if they are eligible and available

for re-election, will be put forward for re-

election by shareholders. Those directors

eligible for re-election at the forthcoming

AGM are, Sipho Pityana, Rodney Ruston and

Maria Richter. Professor Nkuhlu shall retire

from ofﬁce at the AGM in accordance with the

company’s MOI and does not offer himself for

re-election. See the

<NOM>

Following the abovementioned changes to

the board, 36% of the board will comprise of

women against the voluntary target of 30%.

DIRECTORS’ INTERESTS

Directors are required to declare their interests

annually and to disclose any conﬂicts of interest,

if and when they arise, to determine whether

there are any that conﬂict with their duties at

AngloGold Ashanti. Once a conﬂict has been

disclosed, it is managed appropriately by the

board. A Declaration of Interest form is updated

by the Company Secretary and any new

interest is declared at each meeting.

DIRECTORS’ DEALINGS IN SHARES AND

CLOSED PERIODS

The Company Secretary informs the board and

AngloGold Ashanti employees of its closed

periods, during which trade in AngloGold

Ashanti shares by directors, senior divisional

management and by restricted participants

in the company’s various share incentive

schemes is prohibited.

All directors’ dealings require the prior approval

of the Chairman and the Company Secretary

who retains a record of all such share dealings.

INDEPENDENCE OF DIRECTORS

Determination of director independence

is guided by King III, the Companies Act,

the requirements of the JSE and the NYSE

independence test, the company’s internal policy

on independence, as well as best practice. All

directors were found to be independent in terms

of character and judgement.

BOARD AND COMMITTEE EVALUATIONS

The performance of the board is evaluated

annually and includes:

•

an assessment of the performance and

effectiveness of the board as a whole and

that of individual directors

•

an evaluation of each committee by members

of the committee as well as an evaluation of

the chairperson of the committee

•

the Company Secretary

An external board evaluation is conducted

every third year and for the other two years,

the Company Secretary facilitates the process.

In 2016 an internal assessment was conducted,

the results of which were discussed by the

Nominations Committee and the board in

February 2017 and an action plan developed

for areas of reﬁnement.

COMPANY SECRETARY

The Company Secretary, Maria Sanz Perez,

is responsible for developing, implementing

and maintaining effective processes and

procedures to support the board and its

committees in the discharge of their duties and

responsibilities. She advises the board and

individual directors on their ﬁduciary duties and

on corporate governance requirements and

best practices.

In line with the JSE Listings Requirements,

the board evaluated the qualiﬁcations,

competence and experience of the Company

Secretary in December 2016 and was satisﬁed

that Maria Sanz Perez is qualiﬁed to serve as

Company Secretary. The board also conﬁrmed

the Company Secretary’s independence

and that the Company Secretary maintains

an arms-length relationship with the board

when carrying out her duties. The Company

Secretary is not a director of the company and

has no personal associations with any of the

directors. Maria Sanz Perez’s qualiﬁcations

and experience can be viewed in the sections

entitled The board and Executive Management

in this report and on the website,

www.anglogoldashanti.com.

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Business context

Strategy

Performance review

Accountability

Shareholder information

C O R P O R A T E G O V E R N A N C E

( C O N T I N U E D )

AUDIT AND RISK COMMITTEE

Brief summary of responsibilities:

The Audit and Risk Committee oversees the

integrity of ﬁnancial reporting, the existence

of proper internal controls, the integrity of

the

<IR>

and risk management processes

and assesses the company’s continuing

ability to operate as a going concern. The

committee assists the board with the oversight

of IT governance, risk management and

the implementation of a group ethics and

regulatory compliance programme. It ensures

the company has qualiﬁed external auditors

and internal auditors.

More detailed information on the committee’s

achievements is available in the committee

chairman’s report in the

<AFS>

The latest approved Audit and Risk
Committee Terms of Reference, containing
detailed information regarding the
committee’s responsibilities and mandate,
are available on the company’s website,
www.anglogoldashanti.com/en/About-Us/
corporategovernance/Pages/default.aspx

SOCIAL, ETHICS AND
SUSTAINABILITY COMMITTEE

Brief summary of responsibilities:

The key responsibility of the Social, Ethics

and Sustainability Committee is to assist the

board in monitoring matters relating to safety,

health, the environment and ethical conduct

and to ensure that the company develops and

behaves as a responsible corporate citizen.

The committee ensures that the sustainability

strategy positions the company as a leader in

mining and that sustainability objectives are

effectively integrated into the business.

The latest approved Social, Ethics and
Sustainability Committee Terms of
Reference, containing detailed information
regarding the committee’s responsibilities
and mandate, are available on the
company’s website, www.anglogoldashanti.
com/en/sustainability/policies/Pages/
default.aspx

REMUNERATION AND HUMAN
RESOURCES COMMITTEE

Brief summary of responsibilities:

This Remuneration and Human Resources

Committee assists the board in ensuring that

AngloGold Ashanti’s remuneration policies

are in its long-term interests. The committee

ensures that in terms of the decisions made,

non-executive directors, executive directors,

senior management and all other employees

are fairly and responsibly remunerated and that

shareholder value is delivered. It assists the

board in the development of the company’s

human resources environment.

More information on the achievements of

the committee is available in the

Remuneration Report.

The latest approved Remuneration and
Human Resources Committee Terms of
Reference, containing detailed information
regarding the committee’s responsibilities
and mandate, are available on the
company’s website, www.anglogoldashanti.
com/en/About-Us/corporate governance/
Pages/default.aspx

NOMINATIONS COMMITTEE

Brief summary of responsibilities:

The Nominations Committee consists of three

independent non-executive directors and is

chaired by the Chairman of the board. The

committee develops processes to identify,

assess and recommend board candidates for

appointment as executive and non-executive

directors, including the Chairman, Deputy

Chairman, Chief Executive Ofﬁcer and the

Company Secretary, and at the same time

gives full consideration to succession planning

and leadership in the group. It reviews

board composition, including the balance

of skills, experience and independence. The

committee develops and implements the

annual evaluation processes, whether internal

or external.

The latest approved Nominations
Committee Terms of Reference, containing
detailed information regarding the
committee’s responsibilities, mandate
and policy on appointments to the board
are available on the company’s website,
www.anglogoldashanti.com/en/About-Us/
corporategovernance/Pages/default.aspx

B O A R D C O M M I T T E E S

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C O R P O R A T E G O V E R N A N C E

( C O N T I N U E D )

B O A R D A N D C O M M I T T E E M E E T I N G AT T E N D A N C E

The board meets at least six times a year, with additional meetings arranged when necessary. AngloGold Ashanti’s corporate strategies are

discussed and agreed with executive management in an annual strategy session.

The directors’ attendance at the board and committee meetings during 2016 is disclosed in the table below:

Board

Audit and Risk

Committee

Investment

Committee

Remuneration

and Human

Resources

Committee

Social,

Ethics and

Sustainability

Committee

Nominations

Committee

Number of meetings in 2016

SM Pityana

n/a

LW Nkuhlu

n/a

R Gasant

n/a

DL Hodgson

n/a

NP January-Bardill

n/a

MJ Kirkwood

n/a

A Garner

n/a

RJ Ruston

n/a

M Richter

n/a

S Venkatakrishnan

n/a

KC Ramon

n/a

INVESTMENT COMMITTEE

Brief summary of responsibilities:

The Investment Committee assesses individual

capital projects and investment and divestment

opportunities to ensure that investments,

divestments and ﬁnancing proposals are in

accordance with AngloGold Ashanti’s primary

objective of creating shareholder value on a

sustainable long-term basis.

The latest approved Investment Committee
Terms of Reference, containing detailed
information regarding the committee’s
responsibilities and mandate, are available
on the company’s website, www.
anglogoldashanti.com/en/sustainability/
policies/Pages/default.aspx

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C O R P O R A T E G O V E R N A N C E

( C O N T I N U E D )

E T H I C A L L E A D E R S H I P
A N D R E S P O N S I B L E
C O R P O R AT E C I T I Z E N

The board ensures at all times that the

company is, and is seen to be, a responsible

corporate citizen. The board not only

considers the ﬁnancial performance of the

company, but also strives to enhance and

invest in the economic life of the communities

in which it operates, society in general and

the environment. The Executive Committee

is responsible for ensuring these values

are adhered to. The board’s Social, Ethics

and Sustainability Committee ensures the

application of these principles.

The Code of Business Principles and Ethics

(Our Code), launched in 2010, is the deﬁning

document on AngloGold Ashanti’s values and

ethics. The board and management recognise

the importance of ethical behaviour by all

employees, directors and related parties at

all times as we strive to generate competitive

shareholder returns and create value for all

stakeholders. The principles of King III facilitate

the monitoring of the company’s performance

from an ethical perspective.

Our Code provides a framework and sets

requirements for the implementation of key

corporate policies and guidelines. Among

other areas, it addresses fraud, bribery and

corruption, conﬂict of interests, gifts, hospitality

and sponsorships, use of company assets,

privacy and conﬁdentiality, disclosures and

insider trading.

Our Code has been translated into four

languages and is available on the corporate

website, www.anglogoldashanti.com, the

intranet and DVD.

AngloGold Ashanti holds all employees,

directors and ofﬁcers accountable for

complying with Our Code and policies, in

addition to applicable laws, regulations,

standards and contractual obligations in the

countries in which AngloGold Ashanti does

business. Failure to live up to Our Code may

result in disciplinary action being taken, up to

and including dismissal. No employee, director

or ofﬁcer will be disciplined or otherwise

victimised for raising a concern in good faith.

We have promoted our whistleblowing

communication channels that include hotlines,

text messaging, email and web facilities, which

are administered by a third party. Use of these

facilities is promoted by means of posters at

all locations. Employees, directors, ofﬁcers

and external parties may use the hotlines,

anonymously if they wish, to report concerns.

All concerns are carefully investigated and,

wherever possible, feedback is provided to the

person raising the concern upon request.

Sustainability is an integral part of how

AngloGold Ashanti does business. Our

commitment to achieving operational excellence

in a safe and responsible way beneﬁts all

our stakeholders, including our employees,

government and the communities in which we

operate. Our efﬁcient use of resources, together

with the provision of a safe and healthy working

environment, contributes to the sustainability of

our business and the environment.

L E G A L , E T H I C A L A N D
R E G U L AT O RY C O M P L I A N C E

The group’s geographical spread makes its

legal and regulatory environment diverse and

complex. Given the critical importance of

compliance in building a sustainable business,

group compliance plays an essential role in co-

ordinating compliance with laws and regulations,

standards and contractual obligations and

in assisting and advising the board and

management on designing and implementing

appropriate compliance policies and procedures.

During 2016, group compliance undertook

activities aimed at enhancing the company’s

governance. Key among these activities were:

•

the continued global roll-out of awareness

training on Our Code and anti-bribery and

anti-corruption measures by means of

both online training, DVD training for those

without computer access, and “in person”

training on key risk areas

Picture:

Mponeng, South Africa

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C O R P O R A T E G O V E R N A N C E

( C O N T I N U E D )

•

continued development of a compliance

programme aligned with “best practice”

principles identiﬁed by, among others,

bodies responsible for the prosecution of

violations of key extra-territorial legislation

such as the US Foreign Corrupt Practices

Act, and that are adaptable at an operational

level to enhance the effectiveness of the

compliance framework

•

investigations into high-risk issues,

including certain whistleblowing and related

investigations

•

continued implementation of a risk-based

third party due-diligence process for both

suppliers and agents/intermediaries

•

development and utilisation of a

methodology for continuous improvement

in compliance and a review of compliance

policies as well as the use of compliance

metrics as part of our combined assurance

audit programme

•

speciﬁc training on various anti-bribery and

anti-corruption issues, including conﬂicts of

interest and payments to government ofﬁcials

•

revision and issuance of new policies,

procedures and guidance, including a

revised anti-bribery and anti-corruption

policy, related guidance and a revised

conﬂicts of interest policy

•

regular assessment of the automated

registers for group gifts, hospitality and

sponsorship and conﬂicts of interest

•

enhanced communication on compliance

initiatives across the group through, among

other channels, bi-monthly newsletters and

other corporate communications

•

additional efforts to provide automated

access to track and monitor compliance

with laws and regulations, including self-

certiﬁcation processes and legal registers,

by country.

EXTERNAL AND INTERNAL STANDARDS
AND REGULATIONS

AngloGold Ashanti adheres strictly to

legislative and regulatory compliance, including

several external and voluntary standards which

are listed below.

The company is a member of and a signatory

to the:

•

International Council on Mining and Metals

•

Principles of the United Nations

Global Compact

•

Extractive Industries Transparency Initiative

(EITI)

•

United Nations Guiding Principles on

Business and Human Rights

•

Voluntary Principles on Security and

Human Rights

•

World Gold Council’s Conﬂict-Free

Gold Standard

The company is committed to complying with

the following standards:

•

Universal Declaration on Human Rights

•

International Bill of Human Rights

•

International Labour Organization (ILO)

standards

In addition, we have group policies and charters

to which we adhere. Increasingly, customers

and consumers want assurance that the

gold they are purchasing has not contributed

to conﬂict or human rights abuse. This has

resulted in a number of measures being

introduced by industry-related organisations

which we are part of, to prevent gold and other

commodities from being used to fund conﬂict

and other violations of human rights.

By virtue of its shares or depository receipts

being registered with the Securities and

Exchange Commission (SEC) in the United

States, AngloGold Ashanti is also subject to

the various laws regarding securities that are

applicable in that country. This in addition to

being subject to the various listing requirements

applicable in all the stock exchanges that the

company is listed on. These are the JSE, Ghana

and the Australia stock exchanges.

SOUTH AFRICAN EMPLOYMENT EQUITY
ACT 55 OF 1998

In compliance with Section 21 of the

Employment Equity Act 55 of 1998, the

company is obliged to ﬁle with the Department

of Labour, the employment equity statistics

for its South African workforce. A report was

ﬁled with the Department of Labour on 10

December 2015, covering the period 1 August

2013 to 31 July 2015. A copy of the report is

available on the AngloGold Ashanti website,

www.anglogoldashanti.com/sustainability, in the

section entitled “Employment Equity Reports”.

GOVERNANCE – SUPPLY CHAIN MANAGEMENT
AND PROCUREMENT POLICIES

Supply chain management is about more

than just procuring the right product, at the

right time and in the right quantities. Effective

supply chain management, undertaken

with integrity and in line with our values and

governance principles, can add value to our

business by improving efﬁciency, relationships

and reputation and, ultimately, can affect our

long-term sustainability. As a global company

operating on most of the world’s continents,

responsible management of the supply chain

is an increasingly important ethical and human

rights consideration for our business. External

ratings agencies and customers are ever more

aware of the implications and importance of

ethical conduct in the supply chain.

Responsible supply chain management has

the potential to add value to communities,

local governments and society as a whole,

and particularly so in developing countries.

We have adopted a cross-functional

approach to supply chain management

to ensure best practice while complying

with international human rights and labour

standards and ensuring the economic

participation of local stakeholders.

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O U R A P P R O A C H T O TA X

TAX STRATEGY AND TAX MANAGEMENT POLICY

Our tax strategy, which is aligned with

AngloGold Ashanti’s strategy and business

objectives, is to manage all our global taxes

in a transparent, responsible and sustainable

manner, within the governance framework

established by our Tax Management Policy,

respecting the differing interests of all

our stakeholders.

We recognise that AngloGold Ashanti must

earn and maintain its social licence to operate

through a partnership with government and

community stakeholders, thus contributing

towards their sustainable future in the countries

where we operate. Aligned with our vision,

mission and values, we acknowledge our

obligations as a responsible corporate citizen

and that our operations contribute material

tax revenues, in terms of both taxes borne

and taxes collected, to the economies of the

countries in which we conduct our business.

AngloGold Ashanti is a member of the

EITI, a global Standard to promote open

and accountable management of natural

resources. The group is committed to

reporting amounts paid to government in

respect of operations in countries that have

implemented the Standard.

The principles governing the tax strategy and

policy have been reviewed and approved by

the board of directors of AngloGold Ashanti

who, together with the Audit and Risk

Committee, monitor adherence to the policy.

Our tax policy governs the management

of tax throughout AngloGold Ashanti and

conﬁrms the deﬁned parameters within

which the board-approved tax strategy is

applied. This governance framework utilises

a combination of suitably skilled resources,

internal processes, together with internal and

external controls.

Our overall objective is to act responsibly

in ensuring efﬁciency in our tax affairs in

all countries in which AngloGold Ashanti

operates, always in full compliance with the

law, taking into account, however, that such

laws may be subject to regular amendment

and differing interpretations and practices

prevailing from time to time.

AngloGold Ashanti has adopted and is guided

by the following principles:

•

as ﬁscal considerations in all investment

decisions and commercial transactions are

taken into account, tax efﬁciency is always

aligned with a sound business purpose

•

any tax position adopted must be based

on the premise of full disclosure and

compliance with the tax laws of the

relevant countries

•

tax positions adopted must involve

an assessment of all risks, including

reputational risk, i.e. how our decision

might be viewed by stakeholders, including

governments and investors

•

tax risks, including uncertain tax positions,

are managed through the use of a

combination of skilled internal resources and

external tax advisors to enable AngloGold

Ashanti to exercise its judgement to arrive at

appropriate decisions and provisions

The Audit and Risk Committee considers

tax risks, which may arise as a result of our

business operations, on a quarterly basis:

•

in line with our values, we endeavour

to maintain respectful and co-operative

relationships of trust with the tax and other

ﬁscal authorities in all countries in which

we operate

•

we strive to furnish full and transparent

disclosure under global ﬁnancial reporting

standards and other applicable regulations.

Responsibility for ensuring effective

implementation of the tax management policy

and adherence to its principles rests with the

Chief Executive Ofﬁcer, who holds the Chief

Financial Ofﬁcer accountable for ensuring

compliance with the policy. The Chief Financial

Ofﬁcer, in turn, holds the Vice President: Global

Taxation accountable for ensuring that there

are adequate resources, internal structures,

policies, processes and controls in place

at group level. The Vice President: Global

Taxation is responsible for monitoring and

co-ordinating compliance with the tax policy.

The Chief Financial Ofﬁcer and Vice President:

Global Taxation report on AngloGold Ashanti’s

tax position to the Audit and Risk Committee

of the board, on a quarterly basis.

C O R P O R A T E G O V E R N A N C E

( C O N T I N U E D )

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D E A R S H A R E H O L D E R S

T h e R e m u n e r a t i o n a n d H u m a n

R e s o u r c e s C o m m i t t e e ( R e m c o )

i s o f t h e o p i n i o n t h a t A n g l o G o l d

A s h a n t i ’s l e a d e r s h i p t e a m

p e r f o r m e d w e l l i n a n o t h e r d i f f i c u l t

y e a r f o r t h e i n d u s t r y, m a r k e d b y

r e g u l a t o r y d i s r u p t i o n s t o s o m e

o p e r a t i o n s , t e c h n i c a l c h a l l e n g e s

a t o t h e r s , a n d i n c r e a s i n g l y v o l a t i l e

m a r k e t s f o r g o l d a n d c u r r e n c i e s .

Gold averaged $1,248/oz in 2016, a 7%

increase in the average price from the previous

year, arresting three consecutive years of

declines. Nonetheless, the gold price remained

34% below the peak of the cycle, achieved in

2011. Currencies, a major factor in determining

operating costs, also saw wide swings, with the

rand moving in a 28% range during 2016 and

the Brazilian real moving 33%.

As is custom, the management team set an

ambitious list of priorities to tackle during the

course of 2016, building on the achievements

of the two years since the launch of the

‘self-help’ strategy in 2014. To recap, this

strategy has at its core the desire to create

a self-sustaining gold business that is able

to maintain balance sheet ﬂexibility, deliver

returns above its cost of capital in the long

term, withstand price shocks in the short

term and fund its own reinvestment needs.

This must all be done safely and sustainably,

without diluting shareholder returns.

The team’s achievements include strides

made in safety during 2016, with the critically

important area of operating fatalities falling by

more than a third, from eleven in 2015 to seven

last year. Importantly, at the time of writing

this letter, the operating teams had shown the

potential for further signiﬁcant improvements,

logging more than 237 days since the last

South African fatality on 28 July 2016. To

be clear, this remains our single greatest

challenge and one that AngloGold Ashanti is

committed to improving upon. With respect

to environmental stewardship, the number

of reportable environmental incidents fell an

impressive 75%, to a single one in 2016.

In addition to these sustainability successes,

strong gains were made in the engine room

of the business. Adjusted earnings before

interest, tax, depreciation and amortisation

rose 5% to $1.55 billion, despite a 5% drop

in production (from continuing operations),

over 2015 levels, caused by weaker output

from the South African mines due to safety-

related stoppages, lower grades from Kibali,

a planned decrease in grades at Tropicana

and Geita, and the total cessation of output

from Obuasi. Disciplined liability management

helped reduce interest costs by 29% to

$158m, while free cash ﬂow rose 97% to

R E M U N E R A T I O N A N D H U M A N R E S O U R C E S
C O M M I T T E E : C H A I R M A N ’ S L E T T E R

Michael Kirkwood

Chairman: Remuneration and Human
Resources Committee

ACHIEVEMENTS

IN 2016

We actively sought shareholder views so

as to further develop our remuneration

approach and reporting.

We worked with our external consultant

to enhance our incentive structure, to

align with shareholder requirements

and better deliver on our company

strategy. This will be presented to the

shareholders at the 2017 AGM and

implemented in January 2018.

We retained key talent across the

business and strengthened our

succession pool cover ratio.

We successfully closed the South African

Deﬁned Beneﬁt Fund (closed fund).

View CV

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R E M U N E R A T I O N A N D H U M A N R E S O U R C E S
C O M M I T T E E : C H A I R M A N ’ S L E T T E R

( C O N T I N U E D )

$278 million. In response to the objective of

improving balance sheet ﬂexibility, net debt

was reduced by 13% to $1.9 billion, lowering

the important net debt: adjusted EBITDA

metric to 1.24 times, which is well below our

loan covenant limits of 3.5 times.

The aim of improving long-term optionality was

furthered by getting brownﬁelds projects ready

for reinvestment to increase mine life and

widen margins, a key objective in 2017, while

exploration teams added 10Moz to the Mineral

Resource and 2.3Moz to the Ore Reserve,

substantially offsetting depletion from last

year’s production.

While management delivered on the tasks

above, Chief Executive Ofﬁcer, Venkat, reﬂects

in his letter to shareholders in this report, that

his team has more work still to do in safely

improving the operational performance of the

South African portfolio, ﬁnding a sustainable

way forward for the Obuasi mine and unlocking

additional value – at a reduced cost – from the

Colombia portfolio. They will be working hard

on each of those areas through 2017.

In recognition of the work that remains to be

done in these critical areas, and in line with

the restraint he has shown in recent years,

Venkat has elected for the second year in

a row not to take the full 250% allocation

of performance shares under the long-

term incentive plan to which he is entitled,

capping his participation at 200%, in line

with the Executive Committee. These awards

remain subject to stringent performance

conditions prior to vesting in 2020. In 2016,

he requested that his allocation be capped

at 217% of performance shares. In addition,

the CEO Bursary Scheme (see page 165

for details) has helped 21 students to date.

The committee commends him, not only

for his sterling performance in delivering

on the lion’s share of AngloGold Ashanti’s

commitments, but also for the leadership he

has continued to show in the sensitive area

of compensation.

Aside from ensuring alignment of the

company’s remuneration and human resource

practices with the strategic direction of

the company, including King IV regulatory

requirements, the committee was involved in

the following additional activities:

•

Retention of key talent across the business

and a strengthened succession pool

cover ratio

•

Successful closure of the South African

Deﬁned Beneﬁt Fund (a closed fund)

•

Active engagement with our shareholders

and proxy advisory agencies so as to

develop our remuneration approach

and reporting

•

Working with an external consultant to

enhance our incentive structure, to align

with shareholder requirements and better

deliver our company strategy. This will be

presented to the shareholders at the 2017

annual general meeting and implemented in

January 2018.

As communicated to shareholders last year,

with the ongoing focus on the strategic

priorities, the committee spent 2016 addressing

a concern that current leadership share

incentives cannot be fully realised due to

not having the share pool available to meet

allocation requirements. This unsustainable

reward structure, along with evolving

shareholder preference, led the committee to

initiate a substantive review of the share-based

incentive and reward structures.

Following feedback from key stakeholders

and proxy advisory agencies, a redesign of

the incentive structures was ﬁnalised and will

be presented at the May 2017 annual general

meeting for approval and implementation in

January 2018. The approach of the redesign

includes a strong focus on simpliﬁcation,

transparency, increased alignment to

shareholder views and is underpinned by

regulatory compliance. Additionally, there

is greater focus on performance-related

measures which are used to assess and

drive the business. Shareholder interest in

sustainability and environmental focus has

increased and has resulted in the inclusion of

measurable metrics to address this feedback.

The committee believes that the new plan is

in the interest of shareholders as it is simple,

transparent and driven 100% by performance

against critical short- and medium-term

measures of performance. Detailed key

features of the plan are articulated on page

147 of the report.

In driving this change, the committee is

conscious that balance needs to be applied

between both the down cycles and the up

cycles in an industry where cycle duration

can be up to 10 years. The committee

therefore recommends to the shareholders

this journey of change to implement a

scheme that can appropriately weather the

cycles by balancing factors both within and

outside of management control.

I take this opportunity to express appreciation

to the members of the committee for their

support and efforts during the past year.

Michael Kirkwood

Chairman: Remuneration and Human
Resources Committee

22 March 2017

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S H O RT- A N D L O N G - T E R M
I N C E N T I V E R E V I E W A N D
R E D E S I G N

A s a d v i s e d i n t h e 2 0 1 5 a n n u a l

r e p o r t , t h e s h o r t - t e r m i n c e n t i v e

( S T I ) a n d l o n g - t e r m i n c e n t i v e ( LT I )

h a v e b e e n r e v i e w e d i n l i n e w i t h

i n t e r n a t i o n a l b e n c h m a r k s a n d

s h a r e h o l d e r f e e d b a c k .

Following an extensive benchmarking exercise

and shareholder engagements a revised STI

and LTI will be implemented on 1 January

2018, post shareholder approval which will

be requested at the May 2017 annual general

meeting. The proposed incentive structure will

replace all the current short- and long-term

components (cash, bonus share plan, long-

term incentive plan, and the co-investment

plan). The approach for the new incentive is to

ensure simpliﬁcation, transparency and create

a sustainable scheme with increased alignment

to shareholder views underpinned by regulatory

compliance. Participation in the new share

scheme has been reduced, ensuring that there

will be reduced share dilution.

The revised plan will consist of:

•

A single combined STI and LTI (“the

Incentive”), determined on the basis of

performance conditions that are either

one-year or three-year averages

•

A portion of the Incentive will be payable in cash

•

The balance of the Incentive will be awarded

as deferred shares, vesting equally over ﬁve

years for executive committee members.

Key features of the new scheme:

•

A single incentive scheme that covers both

short and long objectives and performance

•

The scheme will be cost neutral compared

to the previous scheme but with greater

scheme leverage

•

The issue of shares will be limited to 1% of

the issued share capital per annum

•

Reduced participation in the share incentive,

with consequently less dilution

•

Introduction of claw back and amended

leaver provisions

•

No more than 5% of issued shares to be

utilised in the scheme

•

Settlement rules provide for issue of new

shares, use of treasury shares, market

purchase and/or cash

•

Total shareholder return (TSR) adjusted but

peer group will remain unchanged

•

Minimum shareholding requirements will

continue to apply

•

Reduce the impact of uncontrollable factors

such as the gold price and currencies

R E M U N E R A T I O N R E P O R T

THE PROPOSED METRICS FOR THE SCHEME ARE AS FOLLOWS:

2018 performance measure

Target weight

Financial

measures

Relative TSR*

10%

NEW METRIC:

Absolute TSR*

10%

All-in sustaining costs

15%

NEW METRIC:

Normalised cash return on equity (nCROE)*

15%

Operational

measures

Production

12.5%

Ore Reserve additions pre-depletion and excluding asset sales

and M&A*

6.25%

Mineral Resource additions pre-depletion and excluding asset

sales and M&A*

6.25%

Sustainability

measures

Safety, health, environment, community*

20%

People:

– Strategic coverage ratio

– Retention of top talent pool

100%

These measures will be on a trailing three-year basis or a combination of annual and three year measures.
The safety metrics will be broadly similar to the 2017 metrics as outlined in the remuneration policy of the

<NOM>

. The Remuneration Committee may re-assess these metrics based on 2017 performance and the

2018 sustainable development strategic priorities.

The shareholder roadshows held to discuss the proposed new scheme and scorecard were

constructive with positive dialogue and feedback in all instances. More detail on the proposed

scheme is provided in the

<NOM>

, for the May annual general meeting.

The rest of this Remco report relates to the existing remuneration design and structure for the

period 1 January 2016 to 31 December 2016.

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Strategy

Performance review

Accountability

Shareholder information

O V E R V I E W O F
R E M U N E R AT I O N P O L I C Y

AngloGold Ashanti’s remuneration

approach aims to create a sustainable

executive remuneration structure for

greater alignment with shareholder

views and interests, underpinned by our

strategic objectives and values.

At AngloGold Ashanti, our remuneration

policy is robust and aims to align with

our strategic objectives while working

to deliver on both internal and external

stakeholder requirements, in a manner

that responds to both market lows and

highs. This is accomplished by means of

a governance and application framework

that primarily aims to retain and attract a

skilled workforce through fair, transparent

and competitive remuneration.

KEY PRINCIPLES OF OUR

REMUNERATION POLICY

In order to continue to support our

remuneration approach, we have a

remuneration policy that is based on the

following key principles:

•

Remunerate to drive and reward the

right behaviour and performance of our

employees and executives

•

Alignment with our strategic objectives and

shareholder interests

•

Ensure that performance metrics are

challenging, sustainable and cover all

aspects of the business including critical

ﬁnancial and non-ﬁnancial drivers

•

Ensure that our remuneration structure

is aligned with our values and that the

correct governance frameworks are

applied across our remuneration decisions

and practices

•

Apply the appropriate global remuneration

benchmarks

•

Provide competitive rewards to attract,

motivate and retain highly skilled executives

and staff vital to the success of the

organisation.

R E M U N E R AT I O N D E S I G N

When determining appropriate remuneration, the

Remuneration Committee (Remco) considers:

1. The potential maximum total remuneration

that each member of the executive

management team could earn related to

their performance

2. External inﬂuences, primarily being:

•

shareholder views and recommendations

associated with executive remuneration

•

economic trends

•

competitive pressure

•

the labour market and the pay gap

between the executive management team

and the rest of the employee population in

the company

3. Market benchmarks, choosing appropriate

benchmarks in a market with similar

attributes including complexity, size and

geographic spread

Our remuneration practices are designed to be

fair, transparent and compliant with legislative

requirements within all the jurisdictions in

which we operate.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Picture:

Cerro Vanguardia, Argentina

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Shareholder information

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Base salary

A competitive salary is paid to executives to

ensure that their experience, contribution

and appropriate market comparisons are

fairly reﬂected

•

Base salaries are reviewed annually and are

effective from 1 January each year

•

Executive base salaries are determined

by considering their performance; market

conditions against companies with a similar

geographic spread; market complexity, size

and industry, and internal peer comparisons

•

The CEO makes recommendations on the

team’s remuneration but does not make

recommendations on his own base salary,

which is reviewed by Remco and approved by

the board

Executive base salary increases and increases

for all non-bargaining unit employees are

closely aligned where practical. This is informed

by inﬂation, which can be matched directly

or above/below consumer price index (CPI)

adjustments can be applied

Individual performance, on a scale of 1 to 5,

measured against speciﬁc key performance

indicators (KPIs), are reviewed by Remco.

A CPI increase pool is approved annually by

Remco. In high-inﬂation countries, individual

increases may be differentiated according to

each individual’s performance rating. In low-

inﬂation countries, a ﬂat CPI is applied to all

executives and employees

Pension

Provides post-retirement beneﬁt aligned with

the schemes in the respective country in which

the team member operates

•

Funds vary depending on jurisdiction and

legislation

•

Deﬁned beneﬁt funds are not available for

new employees, in line with company policy

24.75% of base salary for the CEO and

lower contributions for others, depending on

the scheme

Not applicable

Medical insurance

Provides medical aid assistance aligned with

schemes in the respective country in which the

team member operates

•

Provided to all executives through

either a percentage of fee contribution,

reimbursement or company provided

healthcare providers

In line with approved policy

Not applicable

2 0 1 7 R E M U N E R AT I O N P O L I C Y A N D S T R U C T U R E

The table below sets out the summary of the remuneration policy that applies to the executive management team in 2017, to be approved by shareholders at the 2017 annual general meeting.

The table details each component’s link to the company strategy, objectives, performance measurements and the maximum opportunity associated with each component.

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R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Beneﬁts

Provided to ensure broad competitiveness in

the respective markets

Beneﬁts are provided based on local market

trends and can include items such as life

assurance, disability and accidental death

insurance, assistance with tax ﬁling, cash in lieu

of untaken leave (above legislated minimum

leave requirements) and occasional spousal

travel as per the executive travel guidelines

In line with approved policy

Not applicable

Short-term incentives

The short-term incentive plan (STIP) is also

known as the Bonus Share Plan (BSP) and is

designed to focus executives on delivering key

priorities for the year by achieving the deﬁned

company objectives

Performance objectives are reviewed and

selected annually, based on their short to

medium-term impact on the company

STIP metrics are deﬁned annually and weightings

are applied to each measure. The metrics are

deﬁned against the objectives that most strongly

drive company performance and are heavily

weighted to production, cost and safety

Each metric is weighted and has a threshold,

target and stretch deﬁnition based on the

company budget and the desired stretch

targets for the year

At the end of each ﬁnancial year, company and

CEO’s performances are assessed by Remco

and the board against the deﬁned metrics to

determine the award to be granted

CEO: Maximum award – 200% of base salary

(cash 80% + deferred equity/cash award 120%)

Target award – 100%

(cash 40% + deferred equity/ cash award 60%)

Threshold award – 50%

(cash 20% + deferred equity/ cash award 30%)

Below threshold achievement results in no

payment.

CEO: Performance measures:

70% of company objectives

30% individual KPIs (as reviewed by the board)

Both company and individual performance

assessed over the ﬁnancial year

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R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Short-term incentives (continued)

Stratum III employees and above, who

are not on production bonuses, qualify for

participation

Participation in the STIP is at the discretion

of Remco

The STIP is delivered as a cash element and a

deferred equity element, which is fully realised

after 24 months

The deferral is intended to be delivered in

equity but Remco retains the discretion to

deliver in cash should there be a requirement,

for example, where the shares available for

issue are below the required amount to satisfy

employee allocation needs

Where applicable these attract a cash

equivalent dividend payment settled at vesting

CFO: Maximum award – 175%

(cash 70% + deferred equity/cash award 105%)

Target award is 87.5%

(cash 35% + deferred equity/cash award 52.5%)

Threshold award is 43.75%

(cash 17.5% + deferred equity/cash award

26.25%)

Below threshold achievement results in 0%

payment

Exco: Maximum award – 150%

(cash 60% + deferred equity/cash award 90%)

Target award is 75%

(cash 30% + deferred equity/cash award 45%)

Threshold award is 37.5%

(cash 15% + deferred equity/cash award 22.5%)

Below threshold achievement results in 0%

payment

CFO and Exco: Performance measures:

60% of company objectives

40% individual KPIs (as reviewed by the CEO,

Remco and the board)

Both company and individual performances

assessed over the ﬁnancial year

Company metrics measured are:

•

Production

•

All-in sustaining costs

•

Adjusted free cash ﬂow

•

Safety, health and environment

•

Ore Reserve pre-depletion

•

Project delivery/capital expenditure

Full details of the BSP metrics are provided in

the remuneration policy, and are included in

the

<NOM>

for the May annual general meeting

Co-Investment Plan

The Co-Investment Plan (CIP) is a retention

plan designed to assist executives to achieve

their minimum shareholding requirements.

This is accomplished by encouraging them

to invest their cash bonus in equity, which will

be matched by the company in the short to

medium term

The CIP is offered annually to create

shareholdings held by executives to meet their

minimum shareholding requirements (introduced

in 2013). These were implemented to achieve

alignment of shareholder and executive interests)

Executives invest up to 50% of their net cash

bonuses in company shares. After 12- and

24-month periods, the company offers an

equity match of shares purchased on market,

provided the executive remains in employment

and retains the original investment

150% of the equity originally invested over a

deferred 24-month period

The quantum is based on STIP achievement

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R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Long Term Incentive Plan

The primary intention of the Long Term

Incentive Plan (LTIP) is to ensure that the

medium to long-term interests of the executive

and shareholders are aligned, providing

reward to the executive and wealth creation to

shareholders when the strategic performance

drivers are achieved

The strategic drivers used to deﬁne the LTIP

metrics are depicted in the strategy diagram

on page 155

The LTIP metrics are reviewed and deﬁned
annually in accordance with the strategy. (It is
important to note that any amendment would
be applied on a go-forward basis to newly
allocated awards with no retrospective metric
changes to existing awards)

Weightings are provided to the metrics which
must be achieved over a three-year period

The TSR is measured against a carefully
selected peer group of 10 comparators
recommended by Remco and approved by
the board. The comparator group is retained
for measurement for the full three-year
review period

The score against all relevant measures
contributes towards the percentage of total
awards that will vest at the end of the three-
year period

Only senior management from Stratum IV and
above are eligible to participate in the LTIP

A share under the LTIP is a fully paid ordinary
share in the capital of the company, subject to
performance vesting restrictions. The dilution
may not exceed 5% of the company’s ordinary
share capital

Where applicable these attract a cash
equivalent dividend payment settled at vesting

Participation in the LTIP is at the discretion of
Remco

CEO: Range of award: 160-250% of base salary

CFO: Range of award: 140-200% of base salary

Exco: Range of award: 140-200% of base salary

The performance measures for 2017 have

been updated to introduce metrics to be used

for the 2018 proposed incentive scheme and

shareholder requested performance metrics

As a result two new metrics have been

included:

•

Absolute TSR against the existing relative

TSR comparator group deﬁned below

•

Normalised cash return on equity (nCROE),

which will be measured based on the free

cash ﬂow generated by the group (company

plus subsidiaries) and the group’s share

of joint ventures and associates cash

ﬂows, adjusted for non-sustaining capital

expenditure and exploration costs (growth

investment items) and for Remco-approved

once-off abnormal items (adjusted for

corresponding production and cost levels,

as well as associated tax at average group

rate), expressed as a percentage of the

AngloGold Ashanti’s average equity

Average equity is calculated as the average

opening and closing shareholders’ equity

as per the Audited Financial Statements,

adjusted for material impairments of

the carrying value of assets and share

issuances (excluding those related to the

share incentive schemes)

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Shareholder information

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Remuneration element and link to strategy

Operation and objective

Maximum opportunity

Performance measures

Long Term Incentive Plan (continued)

The additional 2017 metrics are:

•

Relative TSR – this is calculated by the

growth in capital from purchasing a share in

the company, assuming that the dividends

are reinvested each time they are paid. The

TSR is then used to rank the performance

of the company against its competitors

(Barrick, Goldﬁelds, Harmony, Kinross,

Goldcorp, Newmont, Gold ETF (World Gold

Council SPDR classiﬁcation), Randgold,

Newcrest and Sibanye)

•

Operational performance (measured

through all-in sustaining cost, project

delivery and asset optimisation)

•

Future optionality (measured by Mineral

Resource, Ore Reserve and the delivery of

the Colombian Ore Reserve)

•

Development and attraction and retention of

people (measured by the succession cover

ratio and talent retention)

•

A safety multiplier applied to the total score

which can either enhance or detract from

the ﬁnal score by 20%. The safety multiplier

cannot however increase the maximum pay-

out above the deﬁned caps

Full details of the LTIP company metrics are

provided in the remuneration policy, included in

the

<NOM>

for the May annual general meeting

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R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

E X E C U T I V E PAY M I X

The 2016 average executive pay mix, graphs for the CEO, CFO and Executive Committee are

detailed below:

CHIEF EXECUTIVE OFFICER

(Rm)

Maximum

Target

Threshold

Below threshold

Base salary

Benefits

BSP Cash bonus

BSP shares

LTIP

Note: For below threshold performance there are no performance rewards.

CHIEF FINANCIAL OFFICER

(Rm)

1 1

Maximum

Target

Threshold

Below threshold

Base salary

Benefits

BSP Cash bonus

BSP shares

LTIP

Note: For below threshold performance there are no performance rewards.

EXECUTIVE COMMITTEE

(Rm)

1 2

Maximum

Target

Threshold

Below threshold

Base salary

Benefits

BSP Cash bonus

BSP shares

LTIP

Note: For below threshold performance there are no performance rewards.

Note: the graphs do not include co-investment plan participation.

Picture:

Geita, Tanzania

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A L I G N M E N T O F S T R AT E G Y, PAY
A N D P E R F O R M A N C E

In line with AngloGold Ashanti’s strategic

objectives, the BSP and LTIP metrics were

designed to deliver on these key focus areas:

•

Maintain the strong foundation – People

are the foundation of our business. Our

business must operate according to our

values if it is to remain sustainable in the

long term. This includes a drive to improve

safety performance, reduce fatalities and

retain key skills.

•

Improve ﬁnancial ﬂexibility – Ensuring that

our balance sheet remains able to meet our

funding needs.

•

Optimise our cost base – Ensure that all

spend is optimally structured and necessary

to fulﬁl the core business objectives.

•

Improve portfolio quality – Focus on a

portfolio of assets that must be actively

managed to improve the overall mix of

our production base as we strive for a

competitive valuation as a business.

•

Maintain long-term optionality, albeit at a

reasonable cost – Creating a competitive

pipeline of long-term opportunities.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Optimise overhead, costs and

capital expenditure

Maintain long-term optionality

Focus on people, safety and sustainability

Ensure financial flexibility

Improve portfolio quality

Supporting

our strategy for

sustainable

cash flow

improvements

and returns

RATEGIC FOCU

S A

BSP metrics:

•

Production

•

All-in sustaining costs

•

Adjusted free cash ﬂow

•

Project delivery/capital expenditure

LTIP metrics:

•

Total shareholder return
(absolute and relative)

•

Asset optimisation

•

Safety

•

Normalised cash return on equity

BSP metrics:

•

Production

•

All-in sustaining costs

•

Adjusted free cash ﬂow

•

Project delivery/capital expenditure

LTIP metrics:

•

Total shareholder return

(absolute and relative)

•

Asset optimisation

•

Normalised cash return

on equity

BSP metrics:

•

Project delivery/capital expenditure

•

Ore Reserve pre-depletion

LTIP metrics:

•

Total shareholder return

(absolute and relative)

•

Future optionality

BSP metrics:

•

Production

•

Adjusted free cash ﬂow

•

Safety

•

Environment, health

and community

BSP metrics:

•

Production

•

All-in sustaining costs

•

Adjusted free cash ﬂow

•

Project delivery/capital expenditure

•

Ore Reserve pre-depletion

LTIP metrics:

•

Total shareholder return
(absolute and relative)

•

Asset optimisation

•

Future optionality

•

Normalised cash return on equity

LTIP metrics:

•

Total shareholder

return (absolute

and relative)

•

People

•

Safety

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R E C R U I T M E N T P O L I C Y

When recruiting executives, a comparative

benchmarking exercise is done to determine

the size, nature and complexity of the role

as well as skills availability in the market prior

to presenting a competitive offer. For new

appointments, the Remco may compensate

for remuneration forfeited from the previous

employer. The intention is to not grant more

than the executive would have received in a

12-month period. However, Remco does have

the discretion to compensate higher values if,

through a fair valuation, it can be demonstrated

that the amount forfeited exceeds that granted.

Remco will compensate the amount forfeited

through variable pay that can be a combination

of equity and cash.

T E R M I N AT I O N P O L I C Y

The executive management team has open

ended contracts (except where prescribed

retirement ages apply) with termination periods

deﬁned in their contracts. In addition, incentive

scheme rules clearly specify termination

provisions by termination category. In the event

of termination, the company has the discretion

to allow the executive to either work out their

notice or to pay the base pay for the stipulated

notice period in lieu of notice.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

REASONS FOR TERMINATION

Voluntary resignation

Dismissal/ termination

for cause

Normal and early retirement,

retrenchment and death

Mutual separation

Base salary

Paid over the notice period

or as a lump sum

No payment

Base pay is paid for a

deﬁned period based on

cause and local policy as

executives have different

employment entities

Paid over the notice period

or as a lump sum

Pension

Pension contributions for the

notice period will be paid; the

lump sum would not include

pension contributions unless

contractually agreed

Pension will be paid until time

that employment ceases

Pension will be paid until

employment ceases

Pension contributions for the

notice period will be paid; the

lump sum would not include

pension contributions unless

contractually agreed

Medical

provisions

Where applicable, medical

provision for the notice

period will be paid; the

lump sum would not

include contributions unless

contractually agreed

Medical provision/payment

will be provided until such

time that employment ceases

Medical provision/payment

will be provided until

employment ceases

Where applicable, medical

provision for the notice

period will be paid; the

lump sum would not

include contributions unless

contractually agreed

Beneﬁts

Applicable beneﬁts may

continue to be paid during

the notice period but will

not be paid on a lump

sum basis

Beneﬁts will fall away at such

time that employment ceases

Beneﬁts will fall away when

employment ceases

Applicable beneﬁts may

continue to be paid during

the notice period but will not

be paid on a lump sum basis

STIP share

awards

Unvested shares lapse

Lapse all awards (vested,

unexercised and unvested)

Pro rata unvested shares are

awarded based on the length

of employment from the date

of offer

Remco determines whether

or not a pro rata portion may

be granted

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R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Voluntary resignation

Dismissal/ termination

for cause

Normal and early retirement,

retrenchment and death

Mutual separation

BSP cash

bonus

Forfeit, no bonus

No bonus

Discretion to pro-rate for the

period worked

Discretion to pro-rate for the

period worked

LTIP

Unvested awards lapse

Lapse all awards (vested,

unexercised and unvested)

Pro-rata unvested awards,

based on the length of

employment from the date of

offer by applying the last two

years’ average performance

results (has no performance

criteria applied)

Remco determines whether

a pro-rata portion may be

granted (or the board in

the case of the executive

directors)

CIP

Unallocated matching

portion lapses

Forfeit matching portion

of shares

Matching shares are granted

based on the length of

employment from the date of

purchase

Remco determines whether

a pro rata portion may be

granted (or board in the case

of the executive directors)

REASONS FOR TERMINATION (CONTINUED)

M I N I M U M S H A R E H O L D I N G R E Q U I R E M E N T S

With effect from March 2013, a minimum shareholding requirement (MSR) was introduced for the executive management team. Remco is still of the

opinion that share ownership by executive management demonstrates their commitment to the success of the company, and serves to reinforce

alignment between executive and shareholder interests.

The MSRs are outlined in the table below:

Within three years of

appointment/from

introduction of MSR

Within six years of

appointment/from

introduction of MSR

Holding requirement

CEO and CFO

100% of net annual base salary

200% of net annual base salary

Indeﬁnite

Exco

75% of net annual base salary

150% of net base salary

Indeﬁnite

For the purpose of the MSR calculation, only
fully owned and vested awards will count
towards the determination of the MSR.

The following count towards an individual
MSR:

1. JSE shares purchased on the market,

either directly or indirectly, for personal
reasons including shares purchased by
an executive under CIP

2. Vested matching shares purchased by

the company under the CIP

3. Vested shares from the company’s

share incentive schemes (BSP and LTIP
and any historic schemes)

SERVICE CONTRACTS

All members of the executive
management team have permanent
employment contracts, which entitle them
to standard group beneﬁts as deﬁned by
speciﬁc region and participation in the
company’s BSP and the LTIP. All recently
updated executive contracts include
details of participation in the CIP.

South African-based executives are paid
a portion of their remuneration offshore,
which is detailed under a separate
contract. This reﬂects global roles and
responsibilities and takes account of
offshore business requirements. All such
earnings are subject to tax in South Africa.

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R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

CHANGE OF CONTROL AND NOTICE PERIODS

Executive management team contracts are

reviewed annually and currently continue

to include a change of control provision.

The change of control is subject to the

following triggers:

•

Acquisition of all or part of AngloGold Ashanti

•

A number of shareholders holding less than

35% of the company’s issued share capital

consorting to gain a majority of the board

and make management decisions

•

Executive management contracts either

terminated or roles and employment

conditions are curtailed

In the event of a change in control becoming

effective, the executive will, under certain

circumstances, be subject to the notice period

and the change of control contract terms.

REMUNERATION CONSULTANTS

Where appropriate, Remco obtains advice

from independent remuneration consultants.

The consultants are employed directly by

Remco and engage directly with them to

ensure independence.

Following a tender process, Remco

appointed PricewaterhouseCoopers

(PwC) to provide specialist independent

remuneration advice on all forms of

executive and non-executive pay.

Key focus areas for 2016 with which PwC

assisted were:

•

Share scheme design

•

Gini co-efﬁcient calculations and

benchmarking

•

Market trends, updates and best practice

guidance

•

Committee training where required

In line with best common practice, the

Remuneration Committee of the board, which

is comprised solely of independent non-

executive directors, engages independent

consultants in relation to remuneration

related matters. The current advisor is PwC

whose appointment, terms of reference and

fees payable are determined solely by the

Remuneration Committee. PwC is invited to

attend all meetings of the committee and have

regular access to the chairman and members

of the committee. PwC informs and assists

the committee’s deliberations by drawing

on their global reach and perspective on

compensation matters and trends. They brief

the remuneration committee on regulatory

developments in South Africa and major

international markets. They comment on

technical matters, and generally opine on the

committee’s work. Each year, the committee

evaluates the performance of PwC as the

independent adviser and sets their fees to

reﬂect time commitment, value added and

market norms. For the year ended on 31

December 2016, the fees payable to PwC

amounted to ~R260,000 (2015: ~R310,000).

During 2016/2017, PwC were also engaged

by the committee on a project basis to

assist with a comprehensive redesign of the

executive incentive and retention scheme to

be presented for Shareholder approval at the

2017 annual general meeting. For this project

work, the committee agreed an estimated fee

of R700,000 payable to PwC. Additionally,

the committee avails itself of the services and

output of Mercer, who provide global survey

data and analysis. Mercer’s charges amounted

to ~R440,000 (2015: ~R565,000).

Mercer performs an independent bespoke

executive survey and their advice is primarily

around salary benchmarking for executive and

non-executive director pay.

NON-EXECUTIVE DIRECTORS’

REMUNERATION POLICY

The company’s non-executive directors are

paid on the basis of role and there is no

differentiation in terms of nationality. The policy

is applied using the following principles:

•

A fee is paid for the six annual board meetings

and board committee members receive

annual committee fees for participation

•

Fees are reviewed annually and increases

are implemented in July. They are set using

a global comparator group derived from

companies of similar size, complexity and

geographic spread

•

Non-executive directors receive an

allowance for travel outside of their home

countries for site visits and board meetings

•

Non-executive directors are not eligible to

receive any short- or long-term incentives

For the third successive year, no increase to

non-executive director fees will be requested

at the 2017 annual general meeting.

The full remuneration policy, upon which

the non-binding advisory vote is requested,

is published in the notice of annual

general meeting.

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

In 2016, the January annual increases resulted

in each member of the executive management

team receiving an increase in line with the CPI in

their jurisdiction with the exception of the CFO

who received an additional adjustment of 2%.

During the year, the following changes to

the executive management team occurred.

Italia Boninelli, the Executive Vice President:

People and Organisational Development

retired effective the end of March 2016, and

Tirelo Sibisi was appointed as Executive Vice

President: Group Human Resources on

18 January 2016. The remuneration impact

for Italia and Tirelo is as follows:

•

Italia Boninelli received the standard

payments as per policies currently in place

for retirement at AngloGold Ashanti. She

therefore received the following:

•

pro rata BSP shares for all unvested awards

•

pro rata LTIP shares for all unvested awards

•

2015 short-term incentive for the full

12 months

•

Tirelo Sibisi was appointed on an initial

basic salary of R4,500,000 and received an

adjustment in June, resulting in an increase

of 22.2%, bringing her basic salary to

R5,500,000.

In June 2016, Chris Sheppard’s salary was

reviewed in terms of the complexity of his role

and the challenges currently facing him in terms

of delivery. His pay was increased by 7.42%,

bringing his basic salary to R6,800,000.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

2016 COMPARATOR BENCHMARK RANKING

2016*

Comparitor group

Market capital

USDm

Lonmin plc

743

Harmony Gold Mining

Company Limited

1,327

Impala Platinum Holdings

Limited

2,699

Sibanye Gold Limited

2,724

Gold Fields Limited

3,561

Yamana Gold incorporated

3,620

Kinross Gold Corporation

4,889

AngloGold Ashanti Limited

5,688

Anglo American Platinum

Limited

5,998

Randgold Resources

Limited

6,707

South32 Limited

10,229

Mondi Limited

11,290

Goldcorp Inc.

13,328

Sasol Limited

17,580

Newmont Mining

Corporation

19,287

Barrick Gold Corporation

19,717

* Data as at October 2016.

R E M U N E R AT I O N
I M P L E M E N TAT I O N R E P O RT:
J A N U A RY T O D E C E M B E R 2 0 1 6

This section of the Remuneration Report

explains the implementation of our

remuneration policy by providing details

of the remuneration paid to executive and

non-executive directors for the ﬁnancial year

ended 31 December 2016.

EXECUTIVE PAY

In 2016, the gold price remained relatively

low while the share price remained volatile.

Cost control remains a key imperative and the

external market reﬂected similar challenges.

On behalf of AngloGold Ashanti, Mercer

conducts an annual bespoke survey of

executive remuneration. For 2016, Remco

reviewed the comparator group against

AngloGold Ashanti to ensure that changes

in the market had not led to variances that

made the current matches inappropriate.

The review consisted of a detailed analysis of

companies who it was felt were appropriate

for inclusion in the benchmark. The

companies included in the comparator group

were ranked in terms of a number of criteria

selected in a number of areas which were

aligned with AngloGold Ashanti. The table

alongside summarises the ﬁnal comparator

group. In the 2016 survey, an additional

participant, South32, was included.

The table overleaf summarises remuneration

of our executive director and prescribed

ofﬁcers remuneration for 2016. It comprises

an overview of all the pay elements available

to the executive management team in the 12

month period ended 31 December 2016.

Picture:

Gramalote, Colombia

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Overview

Business context

Strategy

Performance review

Accountability

Shareholder information

Figures in thousand

Appointed

with effect

from

Resigned/

retired with
effect from

Salary

(1)

Perfor-

mance-

related

payments

(STIP)

(2)

Pension

Other

beneﬁts

and

encashed

leave

(3)

Sub total

Exercised

BSP share

award

value

Exercised

LTIP share

award

value

Total

SA rands

Total

US dollars

(4)

Executive directors

S Venkatakrishnan

2016

Full year

12,660

7,323

3,133

3,785

26,901

–

26,901

1,832

2015

Full year

12,000

7,635

2,970

1,728

24,333

–

24,333

1,905

KC Ramon

2016

Full year

8,007

4,354

800

743

13,904

–

13,904

947

2015

Full year

7,448

4,634

931

13,081

–

13,081

1,024

Prescribed ofﬁcers

I Boninelli

2016

31 Mar

1,607

–

161

10,124

11,892

12,704

12,291

36,887

2,513

2015

Full year

6,092

3,066

647

799

10,604

–

10,604

830

CE Carter

(5)

2016

Full year

10,180

4,439

1,523

2,058

18,200

4,342

–

22,542

1,535

2015

Full year

8,640

4,608

254

5,849

19,351

2,641

2,352

24,344

1,906

GJ Ehm

(6)

2016

Full year

9,466

3,740

381

3,781

17,368

4,910

2,570

24,848

1,693

2015

Full year

7,877

5,639

335

2,627

16,478

644

806

17,928

1,404

RW Largent

2016

Full year

17,722

7,728

3,314

5,810

34,574

13,107

3,184

50,865

3,465

2015

Full year

15,166

8,021

2,814

6,439

32,440

3,422

837

36,699

2,873

DC Noko

(7)

2016

Full year

6,432

2,805

643

4,227

14,107

–

14,107

961

2015

Full year

6,097

4,213

648

1,505

12,463

–

12,463

976

ME Sanz Perez

2016

Full year

6,404

2,985

641

2,389

12,419

9,349

2,315

24,083

1,640

2015

Full year

6,071

3,055

645

743

10,514

–

10,514

823

CB Sheppard

(8)

2016

Full year

6,604

2,965

674

339

10,582

–

10,582

721

2015

1 June

3,500

1,552

438

1,028

6,518

–

6,518

511

TR Sibisi

(9)

2016

18 Jan

4,887

2,398

497

166

7,948

–

7,948

541

2015

–

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

The table below summarises our executive director and prescribed ofﬁcer remuneration for 2016. It comprises an overview of all the pay elements

available to the executive management team in the 12-month period ended 31 December 2016.

(1)

Salaries are disclosed only for the period from or

to which ofﬁce is held, and include car allowances

where applicable.

(2)

The performance related payments are calculated on

the year’s ﬁnancial results.

(3)

Includes health care, pension allowance, cash in lieu

of dividends, vested CIP match awards, secondment/

relocation allowances, group personal accident,

disability and funeral cover. Surplus leave days

accrued are automatically encashed unless work

requirements allow for carry over. The primary reason

for the increase in other beneﬁts year on year is the

vesting of CIP match awards:

– I Boninelli: R4.5m – S Venkatakrishnan: R2.5m

– DC Noko: R2.2m – RW Largent: R3.8m

– ME Sanz Perez: R2m

(4)

For illustrative purposes only, values have been

converted using the average annual exchange rate for

2016: R14.6812:$1 (2015: R12.7719:$1) to arrive at

the US dollar equivalent.

(5)

Beneﬁts for 2016 for C Carter include a dependant’s

scholarship award of $2,500.

(6)

GJ Ehm’s 2015 increase was delivered as a lump sum

payment (2.5% adjustment) of R196,927 in January

2016. He received a project bonus in terms of delivering

against the Obuasi Project Charter. The bonus was

based on 60% of pay, of which 40% was paid in 2015

and the balance in February 2016, based on meeting

of performance requirements. Other beneﬁts included a

secondment allowance for time spent in Ghana.

(7)

DC Noko received a project bonus in terms of delivering

against the Obuasi Project Charter. The bonus was

based on 60% of pay, of which 40% was paid in

2015 and the balance in 2016, based on meeting of

performance requirements. Other beneﬁts included a

secondment allowance for time spent in Ghana.

(8)

CB Sheppard commenced employment on 1 June

2015 and as such his pay reﬂects 7 months of the year.

A sign-on bonus was paid and is reﬂected under other

beneﬁts. The annual performance bonus was pro-rated.

(9)

TR Sibisi commenced employment on 18 January

2016 and as such her pay reﬂects just over 11

months of the year.

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Strategy

Performance review

Accountability

Shareholder information

M I N I M U M S H A R E H O L D I N G A C H I E V E M E N T S

For the purposes of the MSR calculation, only fully owned and vested awards will count towards

the determination of the MSR.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Executive

Three-year

target

achievement

date

Three-year

MSR target

achievement

percentage

MSR holding as

at 31 Dec 2016

as % of net

base pay

Six-year

MSR target

percentage

achievement

Executive directors

S Venkatakrishnan

(1)

March 2016

100%

1,046%

200%

KC Ramon

(2)

March 2018

100%

68%

200%

Prescribed ofﬁcers

CE Carter

March 2016

75%

188%

150%

GJ Ehm

March 2016

75%

277%

150%

RW Largent

(3)

March 2016

75%

122%

150%

DC Noko

March 2016

75%

364%

150%

ME Sanz Perez

March 2016

75%

200%

150%

CB Sheppard

(4)

March 2019

75%

150%

TR Sibisi

(5)

March 2020

75%

150%

(1)

The executive director has retained all of his share exposure in the company (net of tax) since he joined AngloGold

Ashanti during 2000.

(2)

The executive director joined the company 1 October 2014 and the three-year MSR achievement is only due in

March 2018.

(3)

The prescribed ofﬁcer was required to sell shares in order to pay for tax on vesting in the US, resulting in a reduced

share holding.

(4)

The prescribed ofﬁcer joined the company 1 June 2015 and the three-year MSR achievement is only due in March 2019.

(5)

The prescribed ofﬁcer joined the company 18 January 2016 and the three-year MSR achievement is only due in March 2020.

Picture:

Moab Khotsong, South Africa

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Strategy

Performance review

Accountability

Shareholder information

S H O RT- T E R M I N C E N T I V E P E R F O R M A N C E O U T C O M E S ( B S P )

Safety was once again an important issue for AngloGold Ashanti in 2016. Of the 22% allocated to safety, health and environment, 15% of the measure

is directly apportioned to safety. 2016 however provided a lower result with a 71.14% achievement out of 100%, compared to 81.47% in 2015.

The table below summarises AngloGold Ashanti’s remuneration metrics, their weightings, and performance against these metrics applicable to the BSP

during 2016:

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

BSP company performance measure 2016

Target

weighting

Achievement

Actual

achievement

against

measures

Threshold

measures

Target

measures

Stretch

measures

Production (000oz)

20%

10.95%

3,628

3,600

3,745

3,831

All-in sustaining costs ($/oz)

20%

13.15%

986

1,011

972

930

Adjusted free cash ﬂow ($m)

20%

394

102

Project delivery/capex

7.36%

Measured against a detailed project plan

2016 Ore Reserve pre-depletion (Moz)

10%

2.3

Plus 0.74

Plus 1.19

Plus 1.48

SAFETY, HEALTH AND ENVIRONMENT

AIFR – three-year rolling average

(7.36 per million hours worked)

7.71

performance

improvement

(6.99)

10%

performance

improvement

(6.62)

20%

performance

improvement

(5.89)

FIFR – three-year rolling average

(0.043 per million hours worked)

0.056

performance

improvement

(0.04)

10%

performance

improvement

(0.038)

20%

performance

improvement

(0.034)

Major hazard management – identify, access

and analyse major safety hazards (target for

2016 – 65), deﬁne controls and institute critical

control regiments

90% of major

hazards

identiﬁed,

accessed and

controlled

95% of major

hazards

identiﬁed,

accessed and

controlled

100% of

major hazards

identiﬁed,

accessed and

controlled

High major or extreme environmental incidents

as deﬁned in the company incidents classiﬁcation

and reporting management standard

1.25%

Target achievement is zero incidents

Picture:

AGA Mineração, Brazil

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Accountability

Shareholder information

BSP company performance measure 2016

Target

weighting

Achievement

Actual

achievement

against

measures

Threshold

measures

Target

measures

Stretch

measures

Environment: Three-year rolling average moderate

environmental incidents

1.25%

0.5%

18 10% reduction

in three-year

rolling average

moderate

environmental

incidents

20% reduction

in three-year

rolling average

moderate

environmental

incidents

30% reduction

in three-year

rolling average

moderate

environmental

incidents

Environment: site speciﬁc bow-tie analysis of

generic environmental risks

0.68%

bow-tie

analyses

completed

bow-tie

analyses

completed

bow-tie

analyses

completed

Health: site compliance with the global safety

standards on occupational environment and

health, well-being and ﬁtness for work

2.50%

91%

85%

compliance

90%

compliance

95%

compliance

Community: number of human rights violations

0.5%

2 human

rights

violations

2 human

rights

violations

1 human

rights

violations

0 human

rights

violations

Production loss events as a result of

community unrest

0.5% of

annual

budged

production

0.3% of

annual

budged

production

0.15% of

annual

budged

production

Total % for company performance

100%

71.14%

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

BSP PERCENTAGE ACHIEVED

6.44

46.10

81.01

81.47

71.14

(%)

The BSP company performance over

the past ﬁve years is illustrated below.

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Accountability

Shareholder information

V E S T I N G O U T C O M E S O F T H E 2 0 1 4 LT I P AWA R D S

The LTIP reﬂects ongoing poor TSR performance over the three-year period. The table below summarises AngloGold Ashanti’s 2014 LTIP metrics,

weightings and performance against metrics. The LTIP awards will vest in 2017.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

LTIP PERCENTAGE ACHIEVED

41.0

37.2

37.4

32.4

26.1

(%)

The LTIP performance over the past ﬁve

years is illustrated below:

2014 LTIP performance measure

Target

weighting

Achievement

Threshold

measures

Target

measures

Stretch

measures

Total shareholder return

Three-year relative ranking with
the selected comparator group.
The comparators are: Barrick,
Gold Fields, Harmony, Newmont,
Kinross, Goldcorp, Gold ETF (World
Gold Council SPDR classiﬁcation),
Randgold, Newcrest and Sibanye

50%

0.0%

Sliding scale:
50% - 60%

Sliding scale:
60% - 80%

Sliding scale:
80% - 100%

Portfolio optimisation

Project delivery
Kibali (4%); CC&V (3%); Mponeng (3%)

20%

13.6%

As per the project delivery matrix

Asset optimisation
As deﬁned by the management
action plan

As deﬁned by the management action plan

Future optionality

Innovation South African technology

20%

5.4%

Measured against budget

Mineral Resource

Plus 7Moz

Plus 13Moz

Plus 16.5Moz

Ore Reserve

Plus 2Moz

Plus 3.5Moz

Plus 5Moz

Core value: people

Strategic coverage ratio

10%

10.0%

1:0.50

1:0.60

1:0.75

Retention of top talent pool

12% turnover
pa

8% turnover
pa

5% turnover
pa

Sub-total

100%

29.0%

Safety multiplier

Core value: safety

Injury severity rate improvement

20%

-2.9%

>10%
performance
improvement

>15%
performance
improvement

>20%
performance
improvement

Major hazard management

70%
programme
completion

85%
programme
completion*

Full
programme
completion*

Total

100%

26.1%

Programme covering all major safety risks identiﬁed through the fatal risk protocol.

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Shareholder information

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

S R I N I VA S A N V E N K ATA K R I S H N A N

CHIEF EXECUTIVE OFFICER

Start date:

1 July 2000

Notice period:

12 months

Change of control:

(as described in the

Remuneration Policy

section “Change of control

and notice periods” on

page 158)

12 months

PERSONAL PERFORMANCE ACHIEVEMENT

Maximum bonus opportunity:

(as % of base pay)

Final bonus result:

(as % of base pay)

CHIEF EXECUTIVE OFFICER

(Rm)

Maximum

Target

Actual

Base salary

Benefits

BSP Cash bonus

BSP shares

LTIP

CIP

Note: For below threshold performance there are no performance rewards.

Key achievements in the year

•

Delivery across all ﬁve strategic pillars of

the group strategy consistently for four

years, and in particular during 2016

•

Marked improvements in safety and

environmental performance in the business

as evidenced by a 36% reduction in fatal

accidents and reduction in environmental

incidents, by 75% to one in 2016, both as

compared to 2015

•

Strong free cash generation of $278m for

the year thereby reducing net debt further

by 13% without recourse to dilution, and

creating the ﬂexibility to return to dividend

paying status after a three year hiatus

•

Strong turnaround in the second half of the

year to deliver full year gold production of

3.628Mozs at an all-in sustaining cost of

$986/oz

•

Brought forward a strong organic pipeline

of lower-capital, high-return brownﬁelds

projects to enhance margins, extend mine

lives and improve production mix

•

Developed internal succession capability to

key roles, improved succession cover ratio

and retention of key talent

•

Met certain other strategic priorities set by

the board for 2016

80%

57.84%

In 2014, the CEO started a bursary scheme in

conjuction with University of Witwatersrand,

South Africa. It is aimed at supporting

the education of deserving historically

disadvantaged South African students from

our operating areas, with a strong bias in

favour of female students. To date, the CEO

has contributed R2.25m, which has been

matched equally by the company.

So far the bursary has beneﬁted eleven

undergraduate students and ten post-

graduate students who have completed

their honours. Of the eleven undergraduate

students, four graduated in 2016 and are

currently enrolled for their honours degrees.

The total actual pay for Venkat in 2016 that could result from the remuneration policy as stated

above is shown in relation to target and maximum earning potential. As Venkat did not exercise

shares in 2016, his actual pay only shows CIP matching.

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Accountability

Shareholder information

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

CEO’S PERFORMANCE BONUS OUTCOME – 2016

2016 performance year bonus outcome

Weighting

Outcome

Financial performance targets

Production (000oz)

20%

10.95%

All-in sustaining costs ($m)

20%

13.15%

Adjusted free cash ﬂow ($m)

20%

20.00%

Project delivery/capital expenditure

7.36%

2016 Ore Reserve pre depletion

10%

10.00%

Safety, health and environment

22%

9.68%

Total % for company performance

100%

71.14%

Organisational performance weighting

70.00%

A – Organisational performance weighted outcome

49.80%

Individual performance results

Actual individual targets and strategic individual

performance weighting:

30.00%

Maximum performance rating bonus correlation:

75.00%

B – Maximum bonus opportunity based on individual

performance

22.50%

Total % of maximum bonus pay opportunity (A + B)

72.30%

Maximum bonus opportunity (as % of base pay)

80.00%

Final bonus result (as % of base pay)

57.84%

Base pay during the year

R12,660,000

Annual bonus

R7,322,544

2014 LTIP performance measures

Weighting

Outcome

Total shareholder return

50%

0.00%

Portfolio optimisation

20%

13.60%

Future optionality

20%

5.40%

Core value: People

10%

10.00%

Sub-total 100%

29.00%

Core value: safety multiplier

+-20%

-2.90%

A – LTIP performance measures:

26.10%

B – Number of shares allocated in 2014

121,181

2014 number of shares allocated based

on 200% of annual basic

C – Share price as at 24 February 2017

R153.20

Value of 2017 vesting

R4,845,447

Note: The above value is an estimate and the actual value can only be determined based on the

share price as at the date when the award is exercised.

Picture:

Cerro Vanguardia, Argentina

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Shareholder information

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

CHIEF FINANCIAL OFFICER

(Rm)

1 3

Maximum

Target

Actual

Base salary

Benefits

BSP Cash bonus

BSP shares

LTIP

CIP

Note: For below threshold performance there are no performance rewards.

C H R I S T I N E R A M O N

CHIEF FINANCIAL OFFICER

Start date:

1 October 2014

Notice period:

6 months

Change of control:

(as described in the

Remuneration Policy

section “Change of control

and notice periods” on

page 158)

6 months

PERSONAL PERFORMANCE ACHIEVEMENT

Maximum bonus opportunity:

(as % of base pay)

Final bonus result:

(as % of base pay)

Key achievements in the year

•

Strong leadership in managing capital investment and operating expenses, leading to cash

ﬂows exceeding target in spite of the depreciating rand

•

Further debt reduction and savings delivered for the 2016 year

•

Information technology execution with successful SAP results in Geita and Iduapriem

70%

54.38%

Total actual pay for Christine in 2016 that could result from the remuneration policy as stated

above is shown in relation to target and maximum earning potential. As Christine did not exercise

shares in 2016 and as she joined the company in October 2014, pay only shows CIP matching

for 2015.

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Accountability

Shareholder information

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

CFO’S PERFORMANCE BONUS OUTCOME – 2016

2016 performance year bonus outcome

Weighting

Outcome

Financial performance targets

Production (000oz)

20%

10.95%

All-in sustaining costs ($m)

20%

13.15%

Adjusted free cash ﬂow ($m)

20%

20.00%

Project delivery/capital expenditure

7.36%

2016 Ore Reserve pre-depletion

10%

10.00%

Safety, health and environment

22%

9.68%

Total % for company performance

100%

71.14%

Organisational performance weighting

60.00%

A – Organisational performance weighted outcome

42.68 %

Individual performance results

Actual individual targets and strategic individual

performance weighting:

40.00%

Maximum performance rating bonus correlation:

87.50%

B – Maximum bonus opportunity based on individual

performance

35.00%

Total % of maximum bonus pay opportunity (A + B)

77.68%

Maximum bonus opportunity (as % of base pay)

70.00%

Final bonus result (as % of base pay)

54.38%

Base pay during the year

8,006,600

Annual bonus

4,353,669

The 2014 LTIP was allocated to Christine Ramon in October 2014 and as such has not yet

vested. This will be reﬂected in the 2017 Integrated Report.

Picture:

Gramalote, Colombia

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Accountability

Shareholder information

N O N - E X E C U T I V E D I R E C T O R S ’ F E E S A N D A L L O WA N C E S

The table below summarises directors’ fees for the period as well as the comparative totals for 2015 and 2014.

R E M U N E R A T I O N R E P O R T

( C O N T I N U E D )

Director

fees

Committee

fees

Travel

allowance

Total

US dollars

2016

2015

2014

SM Pityana (chairman)

293,500

76,000

8,750

378,250

411,250

430,714

AH Garner

123,500

43,500

32,500

199,500

203,750

–

LW Nkuhlu

163,500

83,500

8,750

255,750

260,250

245,074

MJ Kirkwood

123,500

78,500

47,500

249,500

241,750

262,762

NP Janaury-Bardill

123,500

56,000

10,000

189,500

189,250

187,355

R Gasant

123,500

58,500

11,250

193,250

195,250

187,635

RJ Ruston

123,500

56,000

51,250

230,750

226,250

240,226

MDC Richter

123,500

43,500

32,500

199,500

204,250

–

DL Hodgson

123,500

43,500

8,750

175,750

180,250

125,015

Total

1,321,500

539,000

211,250

2,071,750

2,112,250

1,678,781

WA G E G A P A N D G I N I
C O - E F F I C I E N T

Senior management remuneration continues

to be a sensitive topic. Scarce skills and

talent retention remain a challenge and this is

compounded by the need to remain globally

competitive in countries where labour rates

are generally cheaper. Balancing these

two elements has become challenging,

particularly given the global requirement to

disclose senior management earnings and

Remco’s requirement that executive earnings

are not out of line with those of their peers.

AngloGold Ashanti tracks the Gini co-efﬁcient

from a South African perspective to ensure that

the income dispersion between high- and low-

income earners is not outside market norms.

The analysis is done by PwC as an independent

third party. Based on January 2017 analysis,

PwC concluded that AngloGold Ashanti had

a slightly lower level of income dispersion than

that of South African companies in general as

well as a lower Gini co-efﬁcient when compared

with the South African mining industry, which is

a positive outcome.

N O N - B I N D I N G S H A R E H O L D E R V O T E O N R E M U N E R AT I O N P O L I C Y A N D P R A C T I C E

The table below sets out the results of the votes on the director’s remuneration policy, as well as the vote on the annual report on remuneration at the

2016, 2015 and 2104 annual general meetings.

Vote for

Votes against

Abstained

Remuneration policy

4 May 2016

87.17

12.83

0.30

6 May 2015

84.98

15.02

7.15

14 May 2014

84.08

15.92

3.99

Remuneration of non-executive directors

4 May 2016

91.24

8.76

0.12

6 May 2015

89.21

10.79

0.77

14 May 2014

85.90

14.10

3.10

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A n g l o G o l d A s h a n t i ’s a n n u a l

r e p o r t s f o r t h e 2 0 1 6 f i n a n c i a l

y e a r h a v e b e e n a p p r o v e d a n d

a s s u r e d a s f o l l o w s :

<IR>

I N T E G R AT E D
R E P O RT 2 0 1 6

The Integrated Report for the year ended

31 December 2016 was recommended by

the Audit and Risk Committee for approval by

the board, and was approved by the board of

directors on 22 March 2017.

<AFS>

A N N U A L F I N A N C I A L
S TAT E M E N T S 2 0 1 6

The Annual Financial Statements for the year

ended 31 December 2016 were approved by

the board of directors on 22 March 2017. The

ﬁnancial statements were prepared by the

corporate reporting staff of AngloGold Ashanti

Limited, headed by Meroonisha Kerber, the

group’s Senior Vice President: Finance. This

process was supervised by Christine Ramon,

the group’s Chief Financial Ofﬁcer, and

Srinivasan Venkatakrishnan, the group’s Chief

Executive Ofﬁcer.

In accordance with the Companies Act, No.

71 of 2008, as amended, the Annual Financial

Statements for AngloGold Ashanti Limited,

for the year ended 31 December 2016, were

audited by Ernst & Young Inc., the company’s

independent external auditors, whose

unqualiﬁed audit report can be found in

the

<AFS>

<R&R>

M I N E R A L R E S O U R C E
A N D O R E R E S E R V E
R E P O RT 2 0 1 6

The Mineral Resource and Ore Reserve

information as included in the Integrated

Report was approved by the board of directors

on 22 March 2017.

The chairman of the Mineral Resource

and Ore Reserve Steering Committee is

responsible for AngloGold Ashanti’s Mineral

Resource and Ore Reserve processes and

systems and is satisﬁed that, as reported in

the

<R&R>

, the Competent Persons have

fulﬁlled their responsibilities.

<SDR>

S U S TA I N A B L E
D E V E L O P M E N T
R E P O RT 2 0 1 6

The

<SDR>

was approved by the board of

directors on 22 March 2017. Independent

combined reasonable and limited assurance of

this report was provided by Ernst & Young Inc.

A P P R O V A L S A N D A S S U R A N C E S

Picture:

Geita, Tanzania

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S E C T I O N 6

S H A R E H O L D E R I N F O R M A T I O N

Shareholder information /

172

Forward-looking statements /

174

Administration /

175

In this section, we provide information

relating to our shareholders and useful

administrative details about

the company.

Picture: Cerro Vanguardia, Argentina

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A n g l o G o l d A s h a n t i L i m i t e d

( R e g i s t r a t i o n n u m b e r

1 9 4 4 / 0 1 7 3 5 4 / 0 6 ) w a s i n c o r p o r a t e d

i n t h e R e p u b l i c o f S o u t h A f r i c a i n

1 9 4 4 a n d o p e r a t e s u n d e r t h e S o u t h

A f r i c a n C o m p a n i e s A c t N o . 7 1 o f

2 0 0 8 , a s a m e n d e d , w i t h a p r i m a r y

l i s t i n g o n t h e J S E i n S o u t h A f r i c a .

C O M PA N Y H I S T O RY – I N B R I E F

AngloGold Limited was founded in June 1998

with the consolidation of the gold mining interests

of Anglo American. The company, AngloGold

Ashanti in its current form, was formed in April

2004 following the business combination of

AngloGold Limited (AngloGold) with Ashanti

Goldﬁelds Company Limited (Ashanti).

S T O C K E X C H A N G E L I S T I N G S

AngloGold Ashanti is an independent

gold producer with a diverse spread of

shareholders comprising the world’s largest

ﬁnancial institutions.

At the end of December 2016, AngloGold

Ashanti had 408,223,760 ordinary shares in

issue and a market capitalisation of $ 4,29bn

(2015: $2.88bn). As at 22 March 2017, the

date of this report, the market capitalisation

was $4.53bn.

The primary listing of the company’s ordinary

shares is on the JSE in South Africa. Its ordinary

shares are also listed on stock exchanges in

New York (NYSE), in the form of American

Depositary Shares (ADSs), in Australia, in

the form of Clearing House Electronic Sub-

(CDIs) and in Ghana, in the form of Ghanaian

Depositary Shares (GhDSs).

S H A R E H O L D E R D I A RY

•

Financial year end: 31 December

•

Suite of 2016 annual reports published:

31 March 2017

•

Annual general meeting: 16 May 2017

C H A N G E O F D E TA I L S

Shareholders are reminded that the onus is

on them to keep the company, through their

nominated share registrars, apprised of any

change in their postal address and personal

particulars. Similarly, where shareholders

receive dividend payments electronically (EFT),

they should ensure that the banking details

which the share registrars and/or CSDPs have

on ﬁle are correct.

A N N U A L R E P O RT S

The 2016 suite of annual reports is available

on the corporate reporting website,

www.aga-reports.com.

S H A R E H O L D E R I N F O R M A T I O N

S H A R E H O L D I N G S

The top 10 shareholders together own

43.47% of the shares in issue. There are three

shareholders, each with a holding exceeding

5% of the total ordinary issued share capital.

A comparison of the top 10 shareholders and

their holdings is as follows:

The Bank of New York Mellon holds

176,085,993 shares, being a holding of

43% (2015: 198,617,090 shares, a holding

of 49.01%), through various custodians in

respect of AngloGold Ashanti’s American

Depositary Share Programme on the NYSE.

AS AT 31 DECEMBER 2016, THE TOP 10 SHAREHOLDERS IN ANGLOGOLD ASHANTI WERE:

Rank

Shareholder

No. of shares

% of issued

share capital

BlackRock Inc

42,966,540

10.53

Public Investment Corporation

25,580,542

6.27

VanEck Global

24,485,374

6.00

Investec Group

19,090,074

4.68

Vanguard Group

13,930,513

3.41

Paulson & Co

12,782,400

3.13

Dimensional Fund Advisors

11,804,066

2.89

GIC

11,155,778

2.73

Old Mutual

8,799,883

2.16

Franklin Templeton Investments

6,802,127

1.67

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D I V I D E N D P O L I C Y

Dividends are proposed by, and approved by

the board of directors of AngloGold Ashanti,

based on the company’s ﬁnancial performance.

For the year ended 31 December 2016, the

directors of AngloGold Ashanti declared a gross

cash dividend per ordinary share of 130 South

African cents (assuming an exchange rate of

R13.10/$, the gross dividend payable per ADS

is equivalent to 10 US cents). The dividend

policy now provides for an annual dividend

payment to be based on 10% of the free cash

ﬂow generated by the business for that ﬁnancial

year, before growth capital expenditure. The

Board will exercise its discretion on an annual

basis, taking into consideration the prevailing

market conditions, balance sheet ﬂexibility and

future capital commitments of the group.

WITHHOLDING TAX

On 1 April 2012, the South African government

imposed a withholding tax on dividends and

other distributions payable to shareholders. The

withholding tax rate has been increased from

15% to 20% with effect from 1 March 2017.

A N N U A L G E N E R A L M E E T I N G

Shareholders on the South African register

who have dematerialised their shares in the

company (other than those shareholders

whose shareholding is recorded in their own

names in the sub-register maintained by their

CSDP) and who wish to attend the annual

general meeting to be held on 16 May 2017

in person, will need to request their CSDP or

broker to provide them with the necessary

letter of representation in terms of the custody

agreement entered into between them and the

CSDP or broker.

VOTING RIGHTS

The Companies Act provides that if voting is

by a show of hands, any person present and

entitled to exercise voting rights has one vote,

irrespective of the number of voting rights that

person would otherwise be entitled to. If voting

is taken by way of poll, any shareholder who is

present at the meeting, whether in person or

by duly appointed proxy, shall have one vote

for every share held.

There are no limitations on the right of non-South

African shareholders to hold or exercise voting

rights attaching to any shares of the company.

CDI holders are not entitled to vote in person at

meetings, but may vote by way of proxy.

Options granted in terms of the share incentive

scheme do not carry rights to vote.

S H A R E H O L D E R I N F O R M A T I O N

( C O N T I N U E D )

SHAREHOLDER SPREAD AS AT 31 DECEMBER 2016:

Class of shareholder

Number of

shares held

% of total

shares in issue

Number of

shareholders

% of total

shareholders

Public shareholders

401,593,563

98.38

13,951

99.93

Non-public

Directors

256,547

0.06

Strategic holdings

(Government of Ghana)

6,373,650

1.56

0.01

Total 408,223,760

100.00

13,960

100.00

STOCK EXCHANGE DATA

High

(R or $/share)

Low

(R or $/share)

Average

(R or $/share)

Volume

traded

(000)

Ave monthly

volume traded

(000)

JSE

2016

317.00

114.80

209.18

507,000

1,772

2015

144.92

73.76

113.12

384,307

32,027

NYSE

2016

22.65

7.33

14.35

3,762

4,190

2015

12.99

5.68

8.95

950,850

79,238

Source: Bloomberg

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Certain statements contained in this

document, other than statements of historical

fact, including, without limitation, those

concerning the economic outlook for the gold

mining industry, expectations regarding gold

prices, production, total cash costs, all-in

sustaining costs, all-in costs, cost savings

and other operating results, productivity

improvements, growth prospects and outlook

of AngloGold Ashanti’s operations, individually

or in the aggregate, including the achievement

of project milestones, commencement and

completion of commercial operations of

certain of AngloGold Ashanti’s exploration

and production projects and the completion

of acquisitions, dispositions or joint venture

transactions, AngloGold Ashanti’s liquidity and

capital resources and capital expenditures

and the outcome and consequence of any

potential or pending litigation or regulatory

proceedings or environmental health and

safety issues, are forward looking statements

regarding AngloGold Ashanti’s operations,

economic performance and ﬁnancial condition.

These forward-looking statements or

forecasts involve known and unknown

risks, uncertainties and other factors that

may cause AngloGold Ashanti’s actual

results, performance or achievements to

differ materially from the anticipated results,

performance or achievements expressed or

implied in these forward-looking statements.

Although AngloGold Ashanti believes that the

expectations reﬂected in such forward-looking

statements are reasonable, no assurance can

be given that such expectations will prove

to have been correct. Accordingly, results

could differ materially from those set out in

the forward-looking statements as a result of,

among other factors, changes in economic,

social and political and market conditions, the

success of business and operating initiatives,

changes in the regulatory environment

and other government actions, including

environmental approvals, ﬂuctuations in gold

prices and exchange rates, the outcome of

pending or future litigation proceedings, and

business and operational risk management.

For a discussion of such risk factors, refer to

AngloGold Ashanti’s annual reports on Form

20-F ﬁled with the United States Securities

and Exchange Commission. These factors

are not necessarily all of the important

factors that could cause AngloGold Ashanti’s

actual results to differ materially from those

expressed in any forward-looking statements.

Other unknown or unpredictable factors could

also have material adverse effects on future

results. Consequently, readers are cautioned

not to place undue reliance on forward looking

statements. AngloGold Ashanti undertakes

no obligation to update publicly or release any

revisions to these forward-looking statements

to reﬂect events or circumstances after the

date hereof or to reﬂect the occurrence of

unanticipated events, except to the extent

required by applicable law. All subsequent

written or oral forward-looking statements

attributable to AngloGold Ashanti or any

person acting on its behalf are qualiﬁed by the

cautionary statements herein.

This communication may contain certain “Non-

GAAP” ﬁnancial measures. AngloGold Ashanti

utilises certain Non-GAAP performance

measures and ratios in managing its business.

Non- GAAP ﬁnancial measures should be

viewed in addition to, and not as an alternative

for, the reported operating results or cash

ﬂow from operations or any other measures

of performance prepared in accordance with

IFRS. In addition, the presentation of these

measures may not be comparable to similarly

titled measures other companies may use.

AngloGold Ashanti posts information that is

important to investors on the main page of its

website at www.anglogoldashanti.com.

F O R W A R D - L O O K I N G S T A T E M E N T S

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A D M I N I S T R A T I O N

A N G L O G O L D A S H A N T I L I M I T E D

Registration No. 1944/017354/06
Incorporated in the Republic of South Africa

SHARE CODES:

ISIN: ZAE000043485
JSE: ANG
NYSE: AU
ASX: AGG
GhSE (Shares): AGA
GhSE (GhDS): AAD
JSE Sponsor: Deutsche Securities (SA)
Proprietary Limited
Auditors: Ernst & Young Inc.

OFFICES:

Registered and Corporate
76 Rahima Moosa Street, Newtown 2001,
South Africa
(PO Box 62117, Marshalltown 2107,
South Africa)
Telephone: +27 11 637 6000
Fax: +27 11 637 6624

Australia
Level 13,
St Martins Tower
44 St George’s Terrace
Perth, WA 6000
(PO Box Z5046, Perth WA 6831)
Australia
Telephone: +61 8 9425 4600
Fax: +61 8 9425 4650

Ghana
Gold House
1 Patrice Lumumba Road
(PO Box 2665)
Accra, Ghana
Telephone: +233 302 773400
Fax:+233 302 778155

D I R E C T O R S

Executive
S Venkatakrishnan (Chief Executive Ofﬁcer)

KC Ramon (Chief Financial Ofﬁcer)

Non-executive
SM Pityana (Chairman)

Prof LW Nkuhlu (Deputy Chairman)

AH Garner

R Gasant

DL Hodgson

NP January-Bardill

MJ Kirkwood *
MDC Richter

RJ Ruston ~

British

Indian

American

Australian

South African

Ofﬁcers
Executive Vice President – Legal, Commercial
and Governance and Company Secretary:
ME Sanz Perez

INVESTOR RELATIONS CONTACTS:

Stewart Bailey
Telephone: +27 11 637 6031
Mobile: +27 81 032 2563
E-mail: sbailey@anglogoldashanti.com

Fundisa Mgidi
Telephone: +27 11 637 6763
Mobile: +27 82 821 5322
E-mail: fmgidi@anglogoldashanti.com

Sabrina Brockman
Telephone: +1 646 880 4526
Mobile: +1 646 379 2555
E-mail: sbrockman@anglogoldashanti.com

GENERAL E-MAIL ENQUIRIES:

Investors@anglogoldashanti.com

ANGLOGOLD ASHANTI WEBSITE:

www.anglogoldashanti.com

COMPANY SECRETARIAL E-MAIL:

Companysecretary@anglogoldashanti.com

AngloGold Ashanti posts information that is
important to investors on the main page of its
website at www.anglogoldashanti.com and
under the “Investors” tab on the main page.
This information is updated regularly. Investors
should visit this website to obtain important
information about AngloGold Ashanti.

S H A R E R E G I S T R A R S

SOUTH AFRICA

Computershare Investor Services
(Proprietary) Limited
Rosebank Towers, 15 Biermann Avenue
Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
South Africa
Telephone: 0861 100 950 (in SA)
Fax: +27 11 688 5218
Email: Web.Queries@Computershare.co.za
Website: www.computershare.co.za

AUSTRALIA

Computershare Investor Services Pty Limited
Level 11, 172 St George’s Terrace
Perth, WA 6000
(GPO Box D182 Perth, WA 6840)
Australia
Telephone: +61 8 9323 2000
Telephone: 1300 55 2949 (in Australia)
Fax: +61 8 9323 2033

GHANA

NTHC Limited
Martco House
Off Kwame Nkrumah Avenue
PO Box K1A 9563 Airport
Accra
Ghana
Telephone: +233 302 229664
Fax: +233 302 229975

ADR DEPOSITARY

BNY Mellon (BoNY)
BNY Mellon Shareowner Services
PO Box 30170
College Station, TX 77842-3170
United States of America
Telephone: +1 866 244 4140 (Toll free in USA)
or +1 201 680 6825 (outside USA)
Email: shrrelations@cpushareownerservices.com
Website: www.mybnymdr.com

GLOBAL BUYDIRECT

BoNY maintains a direct share purchase and
dividend reinvestment plan for AngloGold Ashanti.
Telephone: +1-888-BNY-ADRS

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AngloGold Ashanti Limited
Date: May 11, 2017

By:

/s/ M E SANZ PEREZ________

Name: M E Sanz Perez
Title:

EVP: Group Legal, Commercial & Governance