HomeGoldGold Fields says costs will rise in next quarter

Gold Fields says costs will rise in next quarter

Number Nine shaft at
Gold Fields Limited’s
Driefontein gold mine
Johannesburg, South AFRICA — miningreview.com — 06 August 2009 – Gold Fields Limited “’ Africa’s second- largest miner of the metal “’ says it expects costs to rise by 15 % during the next quarter because of a stronger rand and increases in labour and power charges.
“Cash costs in the fiscal 2010 first quarter will climb to US$590 an ounce from US$512 an ounce the previous quarter, Gold Fields said in a statement to the city’s Stock Exchange News Service.

The statement explained that Eskom Holdings Limited “’the largest power supplier to South African mines “’ was boosting tariffs 31% in 2009, while payments to workers “’ the company’s largest operating cost “’ would jump between 9% and 10.5% following the latest wage agreement with the country’s largest labour unions. South Africa’s inflation rate dropped to 6.9% in June.
While gold is rising for a ninth consecutive year in dollar terms, it is declining in rand, which strengthened 19% in the June quarter, according to Bloomberg data.

Earlier, Gold Fields had posted a net loss of 46 cents a share for the three months through June, compared to a profit of R1.95 the previous quarter, it said.

Producers are increasing gold output as prices climb because of investor demand for the metal as a store of value. Bullion for immediate delivery in London has rallied for the past eight years, and has gained 9.3% so far this year.

Gold Fields revealed that its so-called attributable output rose 4% during the quarter to 906 000 ounces. The company’s South African output climbed 2%, while production from outside the country, including Australia, Peru and Ghana, gained 6%.