Ashanti Goldfields Company (AGC) Group lost approximately 63,000 ounces of gold at the Obuasi mine during the industrial action by workers last May.

However, operations have normalized and officials of the company say production levels are set to improve gradually, saying "about half of the Obuasi production shortfall was offset by 30,000 ounces better than forecast production at the Bibiani, Siguiri and Iduapriem mines," all owned by Ashanti.

Total gold production for the second quarter stood at 744,772 ounces, which was below forecast performance. This compares to 705,875 ounces produced in the first quarter of 1998 Statistics in the second quarter report of AGC said the company, however, registered a six per cent increase in its earnings, making 16.4 million dollars compared to the 15.5 million dollars realized during the same period last year. Turnover for the first six months of the company was 284.1 million dollars compared to the 277.3 million dollars posted over the same period last year.

Officials said Ashanti has concluded an agreement with the Ghana Mineworkers' Union and Ministry of Employment and Social Welfare that will make Ashanti reduce it?s workforce by more than 2,000. The retrenchment, the officials noted, has been accepted by the Obuasi workforce, and will be enforced over six months' period from September one this year.

The plan is to reduce Obuasi's operating cost by about seven million dollars, a figure, which is equivalent to nine dollars per ounce at current production levels. However Ashanti has increased its level of hedging protection to 11 million ounces. Fifty per cent of reserves are now hedged at an average price of 389 dollars per ounce, protecting the group against the current difficult gold market.

Ashanti officials stated that the Group is to open up a new 400,000 ounce per-annum mine at Geita, Tanzania. The first gold production will be on target in the second half of 2000.