In 2009 a government relations function within AngloGold Ashanti was formally established. Debates about the best way for governments to manage mineral resource endowment have become increasingly prominent over the last few years, and the business saw the need for a new approach to government relations. During 2009, a reporting system on political risk and government relations was established, and a model was developed for more strategic and systematic engagement with government, which is in the process of being piloted in South Africa.

At the end of 2008 a Government Relations department was created within AngloGold Ashanti, and 2009 saw the function establishing itself formally within the business.

The function has three main objectives:

• To ensure that the company engages in structured and consistent dialogue with the governments of the host countries in which AngloGold Ashanti has a presence.
• To identify, analyse and evaluate areas of political risk which can be addressed or mitigated through healthy relationships with governments.
• To provide timeous, accurate and relevant information and reporting regarding political developments in order to inform business decisions.

Thero Setiloane, the executive vice president responsible for business sustainability, which includes the government relations function, explains the rationale for taking this step within AngloGold Ashanti:

“The responsibility of my team is to ensure that the company maintains its social licence to operate. One of the impacts of the global financial crisis and the accompanying economic slowdown was to bring the resource industry into sharp focus, with governments across the world anxious to ensure that their citizens are seeing the full benefits of the mining of their mineral resources. The establishment of a government relations team at a corporate level within AngloGold Ashanti ensures that we take a structured and consistent approach to dealing with governments across the globe, including in the very early stages of a project”.

AngloGold Ashanti operates in 10 countries on four continents and deals with a diverse range of regimes and legislative environments. In many of these regimes, debates about the best way for governments to manage their countries’ mineral resources have been prominent during 2009, including a significant debate on the nationalisation of mines in South Africa, and the reassessing of mining royalty rates Ghana and the DRC.

In response to these complex questions, a new approach to government relations and the management of political risk is required by the business. Moving away from a relatively ad hoc and region-based approach to relationships with governments towards a strategic, systematic plan for engagement by the business as a whole has been the focus of 2009, and will continue to be developed during 2010.

The main steps taken in 2009 towards achieving a more systematic approach to engagement have been:

• The introduction of an internal country risk reporting system, where quarterly reports are submitted from each of the company’s country managers. This reporting system is used to provide updates on the development of existing issues, identifying potential future issues early on, and to establish the required steps to address these issues.
• The development of a model for engaging with governments, which focuses on ensuring that there is internal agreement on the key issues prior to engagement, and identifying the correct internal actors to conduct the engagement.
• The launch of a pilot engagement exercise with the South African government, to be rolled out during 2010, before being applied in other jurisdictions.