Gold Fields, the world’s fourth-largest gold producer, on Thursday warned that it may be forced to close shafts and restructure as a result of Eskom’s request that the mining industry reduce its power use by 10%.
Gold Fields CEO Ian Cockerill warned that the power shortages in South Africa would affect production in the March quarter and into the foreseeable future.
Subject to the availability of power, Gold Fields anticipates that production in the March quarter could be between 20% and 25% lower than the December quarter as a result of the power restrictions.
The gold producer reported a 3% decline in attributable gold production to 960 000oz for the quarter.
South African mines have only just started resuming operations after they were forced to suspend mining and processing due to the instability of power supply on Friday last week.
Major gold producers said power had been restored to 80% of total average power consumption on Tuesday, and expected to have 90% of their power needs available by Thursday.
“This will have a serious effect on the South African operations and will negatively affect our gold production,” Cockerill said on Friday, when all its South African operations were suspended.
Gold Fields expected to lose about 7 000 ounces every day its operations were affected.
Reporting its December quarterly results, Gold Fields said there was no direct impact on production as a result of electricity load shedding on the South African operations during the December quarter.
However, it cautioned that the ongoing power shortages in South Africa would require a combination of aggressive energy saving and energy-efficiency projects to achieve a 10% reduction in electricity use.
“The 10% reduction by Eskom will impact on gold production and may regrettably lead to shaft closures and restructuring,” Gold Fields warned.
Production at the company’s international operations was forecast to increase marginally in the March quarter while the company warned that costs would be slightly higher due to increases in power and diesel input costs. — I-Net Bridge