Citing costs as the main driving force behind their decision, two South African gold miners have abandoned their memberships to the World Gold Council (WGC).
Mining companies AngloGold Ashanti and Gold Fields, both of which have been slashing costs in the past year, have relinquished their role in the World Gold Council as they seek to adjust to falling gold price.
“We have left the WGC, which is part of our broader focus on costs,” AngloGold Ashanti senior VP for investor relations and group communications Stewart Bailey confirmed.
“The reason for Gold Fields' departure from the WGC was purely a cost decision,” Gold Fields spokesperson Willie Jacobsz said in an email.
“Members pay per ounce of metal produced and with all the cost-cutting we’ve seen, especially here at Gold Fields, we’ve had a look very carefully at our membership of all sorts of organizations around the world.”
Jacobsz was quick to dismiss the notion that Gold Fields was leaving due to WGC’s ‘all-in sustaining cost’ which CEO Nick Holland played a critical role in developing. The program was initiated to give investors a better understanding of producers’ profit margins and help them compare performance.
AngloGold produces close to one-third of its gold output in South Africa, while Gold Fields produces a mere 13 percent.
The World Gold Council comprises of the world’s largest gold producers, which includes Barrick Gold Corp., Newmont Mining and Goldcorp. The organization’s goal is to develop gold-backed solutions, services and markets based on true market insight, creating structural shifts in demand for gold across market sectors.