NewsAngloGold Ashanti Ltd., exit the index, Johannesburg Stock Exchanges, gold producer
Dec 06, 2015 03:55 AM EST
The world's third-biggest gold producer, AngloGold Ashanti Ltd. will be excluded from the Johannesburg Stock Exchange index top 40 companies.
Bloomberg News has reported that the giant gold producer will be out of the FTSE/JSE index from December 21 after a 74 percent drop in stock value since 2012. The only mining stocks left in the gauge would be Anglo American Plc, and BHP Billiton Ltd., which does not operate in South Africa.
The output of Gold in South Africa dropped at the fastest rate among the rest of the biggest gold producing countries in the last ten years. One third of the region's gold are mined from the Witwatersrand Basin. Its gold production went down 50 percent into only 145 metric tons in 2014 as grades went down and operating cost became more expensive.
OCTA Finance reported that AngloGold Ashanti Ltd decreased its price target to $12,500 as of December 1. AngloGold Ashanti Ltd.'s stock dropped -33.2 percent in the last 200 days. It has underperformed in the S&P500, which declined -0.79 percent in the same period.
Storm Investor wrote that AngloGold Ashanti Limited, besides being a gold mining and exploration firm, also produces sulfuric acid, uranium, and silver as by-products. It runs 20 operations in 10 different countries and has operations in South Africa's West Wits and Vaal River. It also runs First Uranium SA, which operates Mine Waste Solutions.
The company also has operations in Continental Africa's Tanzania, Mali, Guinea, Ghana, and DRC. It also runs gold mining and exploration operations in Australasia, specifically in Brazil, Argentina, and the United States.
According to Cape Town Cadiz Specialized Asset Management mining analyst Peter Major said that the South African gold mining industry has been "permanently impaired."
He said, "We were the Silicon Valley of gold mining and took the rest of the world out of business -- that is history now."
Other mining stock that got excluded from the Top 40 Index in 2015 are Impala Platinum Holdings Ltd and Kumba Iron Ore Ltd.