Anglogold will sell its newest mine to Harmony Gold for US$300 million and another mine for 100 million rand (US$7.4 million) to China's Heaven-Sent SA Sunshine Investment Company, the companies said last Thursday.

Anglogold, after suffering heavy losses in its home market, had said in June it would restructure its South African mines which could lead to 8,500 workers or around 30 per cent of its workforce, being laid off.

Yet Harmony, which agreed to buy the Moab Khotsong mine where operations started in 2006 for US$300 million in cash, said it was committed to boosting production at the mine. "We may even increase the workforce," Harmony Chief Executive Peter Steenkamp told Reuters.

Harmony shares fell more than five per cent after it said it might consider a rights issue of new stock to repay a loan it will use to finance the transaction, a rare acquisition in South Africa's gold industry which has been impacted by a range of political and geological issues.

After over a century of mining, shafts are plunging to depths of up to four kilometres, costs have been soaring and government policy is shrouded in uncertainty, curtailing investment.

"US$200 million will be funded through a fully underwritten US$200 million bridge loan facility. Harmony is assessing various alternatives to optimally repay the bridge, including a potential rights issue," the company said.

AngloGold Ashanti Chief Executive Srinivasan Venkatakrishnan said the sale was in line with the company's capital allocation strategy and its aim to improve its portfolio, which includes 17 operations in nine countries.

Harmony said the mine would add 250,000 ounces of gold to its annual production and increase its underground resource base by 38 per cent.

Anglogold will also sell its Kopanang mine, a gold plant and related infrastructure to Heaven-Sent SA Sunshine.

"The purchase consideration will be settled by a payment of 100 million rand in cash and the transfer of certain gold-bearing rock dumps from VMR to AngloGold Ashanti," Anglogold said. — Reuters/GB