26/02/2008

SA Gold Fields

WorldWatch has confirmed reports that Gold Fields Ltd., Africa's second- biggest gold producer, plans to eliminate as many as 6,900 jobs, or 13 percent of its South African workforce, as the nation's utility fails to provide enough power to run the mines.
The reductions are the first by a South African mining company since Eskom Holdings Ltd. said shortages will persist for the next four years. Gold Fields said today it will close part of its Driefontein and Kloof mines and redesign its South Deep mine.
Gold Fields' production may fall as much as 20 percent at a time when bullion prices have never been higher and demand is increasing for gold as a hedge against inflation. The rand has fallen 12 percent against the dollar this year, signaling the world is losing confidence in the country's ability to remedy the crisis.
The inability of Eskom to supply the mines with their full power requirements and to commit to additional electricity demand for new mining projects currently in development has caused a significant crisis.
Gold Fields fell 3.76 rand, or 3.3 percent, to 111.80 rand in Johannesburg as of 9:25 a.m. local time, after earlier dropping as much as 5.2 percent.
The South African government delayed a decision to allow Eskom to expand by four years to 2004, causing the current bout of shortages. Eskom has limited power supplies to the country's mines to 90 percent of normal consumption. A shortfall shut most mines in the country for five days last month.
Gold Fields will delay sending out notices to workers to inform them of the job cuts until the National Union of Mineworkers, South Africa's biggest labor union, has met with the government and the Chamber of Mines on Feb. 26, 27 and 29, the company said.
South Africa has an unemployment rate of 25.5 percent ....
The union has asked the Chamber of Mines, which represents most companies mining in South Africa, for an assessment of the full impact the cuts will have on the industry and economy.
Gold Fields proposes closing the No. 6 and 7 shafts at Driefontein, Africa's largest gold mine, and shelving the No. 9 shaft Depth Extension project at that mine. The No. 3 and 8 shafts may be closed at its Kloof mine. Together Kloof and Driefontein may shed 4,900 jobs.
South Deep will be redesigned and 2,000 jobs may be cut while the Beatrix mine is unlikely to be affected, Gold Fields said.
AngloGold Ashanti Ltd. is Africa's largest gold producer

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