AngloGold Ashanti (NYSE:AU) May Split Off Assets in South Africa

With the share price of AngloGold Ashanti Ltd. (NYSE:AU) being weighed down by the volatility of its assets in South Africa, the gold miner is contemplating splitting off the assets to form two companies.

Chief Executive Officer Mark Cutifani said, "The question people are asking is 'Would we get a higher rating for our international gold assets? The answer is, quite possibly. We're not about to announce a split. We continue to look at that among a range of options."

Even though South Africa accounts for 40 percent of AngloGold's overall production, politics, rising costs and lack of power to run the mines continues to be a huge weight on the share price of the company, the reason it's being evaluated.

A leaner AngloGold Ashanti could be much more profitable than the existing entity.

The African National Congress, an untrustworthy political party, are now ruling South Africa, and are pressing to nationalize the mines in the country.

Barrick Gold (NYSE:ABX) successfully spun off its African assets and soared over 30 percent last year. AngloGold shouldn't have any problem doing the same, and probably will if conditions get any worse, which they are likely to.

AngloGold Ashanti closed Wednesday at $45.47, falling $0.90, or 1.94 percent.