ANGLOGOLD TO SELL FREE STATE ASSETS.

In a move that could see the revival of the Free State goldfields, AngloGold on Wednesday announced the sale of all its assets in the province to a consortium with the ability to turn ailing mines around. The R2,2 billion transaction marked an important moment in consolidating the gold mining industry, Anglogold chief executive Bobby Godsell told reporters in Pretoria. The buyers are African Rainbow Minerals (ARM) and Harmony Gold Mining (Harmony) which intend running the four mines forming part of the deal in a joint venture. ARM executive chairman Patrice Motsepe said: "Our proven track record of turning loss-making marginal shafts into profitable ones ... will enhance the joint venture's ability to profitably extract the remaining ore reserves in the Free States." Harmony chief executive Bernard Swanepoel agreed, saying his company and ARM could sustain the long-term profitably of the mining operations concerned. Welcoming the deal, Minerals and Energy Minister Phumzile Mlambo-Ngcuka said the government had all along wanted gold mining in the Free State to be consolidated. This had now become possible. The sale meant that the life of the the Free State gold mines would be extended, she said. Free State Premier Winkie Direko, who also attended the briefing, described the deal as a very important event for her province. "This is an opportunity to build the economy of the province." She lauded Anglogold for keeping the bigger picture in mind in its withdrawal from the Free State. Godsell said the transaction formed part of the company's objective to develop, acquire and operate long-life, low-cost, gold mining assets. "Our other objective is to close or to sell mines approaching the end of their profitable lives to operators who are better suited to extracting value from such assets," he said. "With the exception of Tshepong, the Free State mines fall into the latter category." ARM and Harmony will hold equal joint venture interests in the assets when the transaction takes effect on January 1 next year. The deal is subject to the transaction being recognised by the South African tax authorities as a rationalisation scheme, in which case no recoupment tax will be payable by AngloGold on the proceeds of the sale. The Free State assets comprise: -- four mines -- Bambanani, Joel, Matjhabeng and Tshepong; -- all surface infrastructure and equipment including metallurgical plants, commercial and residential properties, and ...