Johannesburg, South Africa — 07 November 2012 – A higher gold price will not be enough to offset production losses that have eaten into the quarterly earnings of leading South African mining companies AngloGold Ashanti Limited and Gold Fields Limited.
Revealing this, a poll by Reuters news agency has found that smaller rival Harmony Gold, by contrast, is expected to post a big improvement in earnings, because its overwhelming domestic focus means it is affected most by rand currency factors.
The average gold price in the September quarter rose 3% to US$1,652/oz, and weakness in the South African currency meant that in rand terms, the average price during the July-to-September quarter was up 4% to R438,000/kg.
The rand gold price has an especially big impact on Harmony’s bottom line, since more than 90% of its output comes from South Africa. Gold Fields gets about 50% of its production from its home base, while for AngloGold, South Africa accounts for about 40% of its global output.
AngloGold Ashanti has already said it expects production for the September quarter to be 4% lower than its previous forecast of between 1.07 and 1.1Moz, because of labour unrest in South Africa and lower-than-anticipated production at Obuasi in Ghana.
Gold Fields has warned of a higher strike impact, with its September production roughly 6% lower because of wildcat strikes. A fire at its KDC operations also reduced output to about 810,000oz during the quarter.
Months of often violent strikes have cut production in the gold and platinum sectors, although the bulk of the gold sector’s striking miners returned to work last month under threat of dismissal.
Harmony’s first-quarter results are due on Wednesday, while AngloGold’s third-quarter earnings will be released on Thursday. Gold Fields’ third-quarter results are due on November 26.
Source: Reuters Africa. For more information, click here.