London - AngloGold Ashanti [JSE:ANG] plans to focus on extracting more metal out of its existing mines, rather than using deals to expand.
"We have a lot on our portfolio that we can draw from to increase production," said chairperson Sipho Pityana at the World Economic Forum in Davos, Switzerland.
"That’s what the priority is going to be, and in the overall rankings, mergers and acquisitions would therefore be lower down on our list."
That contrasts with a recent spate of deals in the gold industry as producers benefit from rising metal prices and rebounding profits.
Shares of AngloGold, the world’s third-largest miner of the metal, rallied 44% last year, the biggest increase in a decade.
Deals in the gold industry include Sibanye Gold [JSE:SGL] agreeing in December to pay $2.2bn for Stillwater Mining Company, a Montana-based platinum and palladium producer.
Acacia Mining, which mines in Tanzania, confirmed earlier this month that it’s in talks with Endeavour Mining Corporation about a possible merger.
AngloGold will aim to increase production at operations in Australia, Pityana said. He also cited operations in Brazil and Guinea as targets for expansion, and brownfield projects, meaning growth at existing mine sites.
"We’ve given a signal to management that we are happy to commit more capital and see our capex increasing," Pityana said.
AngloGold’s reef-boring technology, a highly mechanised way of deep-level mining, has started to turn profitable, he said. The equipment is designed to extend the life of precious metal mines.