HomeGoldAngloGold cuts production forecast again

AngloGold cuts production forecast again

AngloGold Ashanti’s
Tau Tona mine
Johannesburg, South Africa — MININGREVIEW.COM — 03 November 2009 – AngloGold Ashanti Limited “’ the world’s third-biggest producer of the precious metal “’ has cut its 2009 production forecast for the second time this year, after suspending output at its TauTona mine in South Africa.

The forecast was lowered to between 4.55 million and 4.6 million ounces, the company said in a statement here. It produced 1.187 million ounces in the third quarter, missing its guidance of 1.2 million ounces.

Lower production is hampering efforts to mitigate the effect of rising costs in South Africa, where wages have risen about 10% this year and electricity charges have increased by an average 31%. AngloGold produces about 40% of its output in the country.

Reuters reports that the suspension at TauTona will last about two months while the mine undergoes repairs and an examination of infrastructure, after a length of steel fell down a shaft. Four workers died in the company’s mines in the third quarter, contributing to safety stoppages that cost 30 full and 18 partial production shifts.
“We’re obviously disappointed and working hard on the issue to ensure that we improve our consistency,” said CEO Mark Cutifani.

Costs in South Africa would rise by between 15% and 25% should state-run power monopoly Eskom Holdings Limited get permission to treble tariffs in the next three years, Cutifani added. “That’s not viable for the industry,” he said, adding that it would affect production and employment.