Mining giant AngloGold Ashanti has entered into a joint venture with Rangold Resources Limited to revamp the activities of its Obuasi gold mine.

The partnership will see Rangold lead and fund a development plan design to rebuild Obuasi as a viable mining business with an attractive cost structure and returns.

The Chief Executive Officer of AngloGold Ashanti, Srinivasan Venkatakrishnan said at a news conference in Accra that, “at a time when capital is constrain for mining, capital is constrain for development, sharing the cost of capital is perhaps the most prudent way to go.”

“Obuasi is such an iconic asset for Ghana. People know Obuasi and Ashanti going back several decades. Getting Obuasi right will resuscitate the Ghanaian economy, the national economy as well and the economy around Obuasi.”

He believes the revamp will attract more mining investment into Ghana.

“…And it will come at a crucial time when investment is not flowing into mining and it will recreate Ghana as a favoured investment destination for mining capital.”

The CEO of Rangold, Mark Bristow, said they are investing about $4 million in the development plan.

“On the cost, the development and plan is ready to get to the point where we can convince AngloGold Ashanti and our shareholders that this is a proper and viable business and of course the government of Ghana.

“We expect to spend a minimum of four million dollars, it could go higher, and really it’s about doing the rough work,” Bristow noted.

Profits and liabilities going forward will be shared 50-50 amongst the two companies. The Obuasi Mine is currently worth five million ounces of gold.