AngloGold capex at record, eyes Russia

By Eric Onstad

JOHANNESBURG (Reuters) - South Africa's AngloGold Ashanti (ANGJ.J: Quote, Profile, Research, Stock Buzz) will spend around a record $1 billion a year on capital expenditure in the near term as it builds new mines and deepens others, its chief executive said.

"We are at the highest level in our history of capital expenditure and of organic growth," Bobby Godsell told the Reuters Global Mining and Steel Summit in London by telephone from Johannesburg.

"Our capex this year is going to be somewhat in excess of $1 billion, and we certainly have a period of time ... when our expansion capital will be of that nature."

The firm's expansion projects will add 13 million ounces over the life of the projects, he added.

Exploration spending was also increasing as AngloGold, the world's third-biggest gold producer, hunts for new deposits across the globe in Australia, Congo, Colombia, Russia, China and the Philippines.

In Russia, Godsell declined to comment on whether AngloGold might jointly bid for the huge Sukhoi Log deposit there with its Russian partner Polymetal.

Polymetal's CEO Vitaly Nesis was quoted as saying last week that his company was the best contender for Sukhoi Log and could bid for it together with AngloGold.

"I can't comment specifically on Sukhoi Log since this is something we will be discussing with Polymetal at our next joint venture meeting," Godsell said.

Russia has not said when it would tender for Sukhoi Log, which is located in the Siberian region of Irkutsk.

Last September, AngloGold agreed a 50-50 joint venture with Russia's second-ranked gold miner Polymetal to explore and develop new mines.

"This is a vast piece of territory ... We would be very unwise to operate in this territory alone ... We're very happy to have them as our partners," Godsell said.

CONGO REVIEW

AngloGold was neither surprised nor worried that the Congo was soon to launch a review of mining contracts since it had encountered similar situations in other countries, Godsell said.

The firm successfully renegotiated its contract with the government of Ghana when it acquired that country's Ashanti Goldfields in 2004 and was currently in talks with Tanzania, he said.

Officials in the Democratic Republic of Congo have said they plan to review mining contracts to make sure they conform to international norms.  Continued...