A demerger follows in the footsteps of BHP Billiton and fellow South African-based miner Gold Fields, which spun off its domestic assets into Sibanye Gold.

AngloGold said it had evaluated several options and decided that splitting the company into “simpler and more focused entities” was the best option.

The company plans to put all of its international assets into a UK holding company, dubbed Newco for now, and seek a listing on the London Stock Exchange.

Newco would hold 14 mines across nine countries, while AngloGold would retain the six South Africa mines and plans to consider other commodities.

Last year, South Africa accounted for 32% of AngloGold’s 4.1 million ounces of production and 35% of earnings before interest, tax depreciation and amortisation of $US1.6 billion.

The rest of Africa accounted for 36% of output and 26% of EBITDA, the Americas contributed 24% of production and 26% of EBITDA and Australia made up 8% of production and just 4% of EBITDA.

However, the Australia figures included only one quarter of production from the new Tropicana mine.

Tropicana produced 253,423 ounces of gold in the first half and is expected to produce 470,000-490,000oz, taking Australia’s contribution to the AngloGold portfolio to 15%.

The contribution within Newco will be greater.

AngloGold will hang on to 65% of Newco initially, while demerging 35% to its shareholders.

AngloGold chairman Sipho Pityana, who will initially be the deputy chair of Newco, said it had become increasingly clear that the two distinct part of the company’s portfolio required different strategies.

“In South Africa, we will create a standard bearer for the mining industry with a structure allowing it to chart an exciting growth trajectory while allowing investors to properly value its high quality, cash generative portfolio,” he said.

“The Newco portfolio is expected to have a premium listing in London and will receive the management focus, resources, financial flexibility and structure required to realise the full potential from its portfolio of growth assets.”

Newco will have secondary listings in Johannesburg and New York.

Despite no mention of the Australian Securities Exchange, MiningNews.net understands AngloGold will remain listed in Australia, while Newco will consider an ASX listing.

AngloGold executive vice president – strategy and business development Charles Carter will be the CEO of Newco, while Ron Largent will be chief operating officer.

The executive team will be Perth-based Graham Ehm, Maria Sanz Perez and David Noko.

Michael Kirkwood and David Hodgson will resign from the AngloGold board and join Newco as chairman and director respectively.

As well as Pityana, AngloGold CEO Srinivasan Venkatakrishnan will also join the Newco board.

The company plans to complete the demerger next year, subject to shareholder approval.

AngloGold also announced a recapitalisation to combat high debt levels of almost $3 billion.

The company is seeking to raise $2.1 billion to redeem bonds and repay other debt.

"Our decisive response to a challenging gold price environment has seen us return to growth, aggressively reduce costs and improve free cashflow, all while posting a record safety performance,” Venkat said.

“We believe that the structural change we have proposed will allow our shareholders to focus on, and support, the key assets of particular interest to them.

“Each business will have greater focus and separate identities which enable them to chart distinct, value-creating strategies going forward.”

AngloGold shares slumped 14.6% in Johannesburg and 15.6% in New York.

In early trade, shares were down 16.2% to $A3.10 in Australia.