Gold Fields warns of output drop

Another indicator of the overall drop in global gold mining production has emerged after one of the largest mining firms in South Africa warned that its gold output is likely to shrink as a result of the recent electricity crisis.

Gold Fields said it expects to see decline of between 20 and 25 per cent in gold bullion output for the three months to March, due to problems with power supply at mines across the country, Reuters reports.

Two recent reports from GFMS have suggested that mining output fell by one per cent last year and that Central Bank Gold Agreement sales are likely to fall short of the 500-tonne limit - potentially affecting gold investments as a result.

"This was always seen as a leading developing country. The power crisis has done immense damage to that reputation," Ian Cockerill, chief executive officer of Gold Fields, told an investor conference.

And with the company announcing today (January 31st) that state power company Eskom has withdrawn authorisation to increase electricity supply from 80 per cent to 90 per cent by tonight, the firm's woes may yet continue.

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