The world's second-biggest mining company will sell 17,6 million shares in AngloGold Ashanti at US$48,33 each while AngloGold will sell 10.3 million new shares, the companies said in a statement to Johannesburg's Stock Exchange News Service on Friday.

The transaction will cut London-based Anglo's stake in AngloGold to about 42,6 per cent from 51 per cent.

Anglo has lagged behind rivals BHP Billiton, the world's No.

1 miner, and Rio Tinto Group as a surge in the rand against the US dollar hurt gains from platinum and gold.

The company used to get about 15 per cent of its income from the precious metals, whose prices have risen less than those of metals such as copper, and iron ore.

Anglo on October 26 announced a change of focus that includes selling its paper and steel units.

Anglo American has "decided to reduce their shareholding," the company said in a statement to the US Securities and Exchange Commission.

It will "no longer seek to retain it as a subsidiary."

AngloGold, the world's second-largest gold producer, is selling shares to fund the expansion of its Cuiaba mine in Brazil and other mines in South Africa.

It is also part of a venture planning the US$1 billion Boddington gold mine in Australia.

It plans to use the share sales proceedings to reduce its borrowings.

The expansion follows decades of under-investment by gold producers worldwide, which led to slowing output amid surging prices this year.

Gold for immediate delivery rose to a 25-year high of US$575,35 on February 2 this year.

- Bloomberg

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