AngloGold Ashanti 2017 earnings hit by costs and provisions

Johannesburg

AFRICA'S top bullion producer AngloGold Ashanti posted lower annual earnings on Tuesday, hit by restructuring costs and US$46 million in provisions for an expected settlement in a class-action suit related to a fatal lung disease.

"Adjusted headline earnings for 2017 include the impact of retrenchment provisions in the South Africa region of US$71 million (post-tax) and the provision for the settlement of the silicosis class action claims and related expenditure of US$46 million (post-tax)," the company said.

As a result, adjusted headline earnings amounted to US$9 million versus US$143 million last year.

A class action suit brought against gold producers in South Africa is likely to be settled "within months" with nine billion rand (S$1 billion) going to miners suffering from fatal lung disease, the chair of an industry group said earlier this month.

The suit was launched almost six years ago on behalf of miners suffering from silicosis, a fatal lung disease contacted by inhaling silica dust in gold mines.

Almost all of the claimants are black miners from South Africa and neighbouring countries such as Lesotho who, critics said, were not provided with adequate protection during and even after apartheid rule ended in 1994.

Gold mining companies have made provisions amounting to about five billion rand while close to four billion rand is available from a compensation fund which bullion producers have been contributing to for years.

AngloGold also said that it had signed an agreement with the government of Ghana to "provide the framework for the redevelopment of the Obuasi Gold Mine into a modern, productive mining operation". AngloGold Ashanti last year lifted a force majeure on the Obuasi mine after the removal of thousands of illegal miners who had invaded the operation.

The company declared a dividend of 70 South African cents per share. REUTERS