AngloGold, the world's largest gold producer, is embarking on a new venture into jewelry manufacturing. The company announced Thursday it will acquire a 25% stake in OroAfrica, South Africa's largest gold jewelry manufacturer, for $8 million.
The acquisition is the latest in a series of initiatives by AngloGold to market its product worldwide. "We see this as a positive move for our company," AngloGold CEO Bobby Godsell says. "It is in line with our corporate strategy to seek value from gold and our commitment to marketing the metal we mine." AngloGold will spend $16 million on global marketing initiatives this year.
The company also hopes to increase revenue by moving into manufacturing. "AngloGold aims to extract value from its product beyond the current limits of mining," Kelvin Williams, executive director of marketing for AngloGold, says. "The premiums on gold are highest further down the product chain in the business, so this move is expected to generate additional revenue for the company and enhanced shareholder value down the road."
OroAfrica is a private company with a strong export focus, and has recently entered a joint venture with the Italian company Filk SPA to manufacture gold chain jewelry. The export market will remain the focus of OroAfrica's growth, AngloGold says. The company will continue to seek new markets and manufacturing opportunities overseas and will offer OroAfrica jewelry for sale on the AngloGold joint venture gold website when it begins operation.
- by Julia M. Duncan