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%.