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goldfields getting desperate

  1. 1,449 Posts.
    Found this on another forum , thanks.....
    please read.

    The article below is from today's miningnews.net and could start a firestorm of activity for Australian golds.

    Gold Fields first to retrench S African miners on long-term power restrictions
    Lorna Seatter
    Tuesday, 26 February 2008

    Major unhedged gold producer Gold Fields is the first miner to cut its South African workforce, after the local power utility reported power shortages would last four years.

    Africa’s second largest gold producer claimed it will close its No 6 and 7 shafts at its Driefontein gold mine and shelve future expansion plans, slashing its workforce by about 13% or 6900 jobs, according to Bloomberg.

    Late last month South Africa’s Eskom Holdings, provider of 95% of the nation’s power, reached crisis point, causing a five day blackout and crippling major miners in the area.

    Africa’s leading miners had no alternative but to terminate production, resulting in world supply shortages in precious metals, particularly platinum.

    With Eskom proclaiming power delivery would sit at 90% over the next four years, South Africa’s major miners have had to revise operations to align with reduced power provision.

    According to Bloomberg, Gold Fields is forecasting a gold output deficit of up to 24% at its Kloof mine, with production costs expected to soar up to 61% at South Deep mine for the quarter ending March. The company has predicted future production to slump about 20%.

    Gold Fields’ head of South African operations Terence Goodlace said, “The inability of Eskom to supply the mines their full power requirements has caused a significant crisis in the South African mining industry,” Reuters reported.

    “It is paradoxical that we have to consider downscaling in the current record-high gold price environment,” Goodlace added, according to Reuters.

    The country’s largest gold producer AngloGold Ashanti said production will be cut this year, Bloomberg reported.

    Although Africa’s primary gold producer has yet to cut jobs, it cannot guarantee it will not happen, an AngloGold spokesman told Bloomberg.

    With South Africa producing 80% of the world’s platinum, the platinum April delivery price has soared to unprecedented highs in recent weeks.

    African platinum giants Impala and Anglo Platinum have claimed negative effects on output resulting from the power crisis.

    On February 21, the platinum April delivery price skyrocketed to a high of $US2190 per ounce, while spot gold shot to a high of $US953.6/oz.

    A spokesperson from Eskom said the utility was in talks with the Government, mining industry stakeholders and labour unions in an attempt to minimise the impact of the power shortage, Bloomberg reported.

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