South Africa’s AngloGold Ashanti (NYSE:AU) (JSE:ANG), the world’s third-largest producer of the metal, said Wednesday it had received environmental permits to reopen its idled Obuasi mine in Ghana.
The operation, which for years battled incursions by illegal miners, is expected to start gold production by the third quarter of 2019, at an initial cost estimated between $450 million to $500 million over the first two and a half years.
“With the key permitting and regulatory process complete, we will continue to progress the redevelopment of the Obuasi mine as a modern, productive, operation that will benefit a range of key stakeholders for at least two decades,” AngloGold Ashanti Chief Executive Officer, Srinivasan Venkatakrishnan, said in the statement.
AngloGold halted operations at its aging Obuasi mine at the end of 2014 after suffering from substantial financial losses. The gold miner was working on plans to redesign the mine when it was overrun by informal miners in 2016, which forced it to evacuate employees.
The Johannesburg-based company was able to clear the site and has signed a raft of agreements with the government of Ghana that led to today’s permits delivery.
Obuasi has reserves of 5.8 million ounces and will operate at costs lower than AngloGold’s current average, the company said in February. Annual gold output will average 350,000 ounces to 450,000 ounces during the first ten years.