Gold prices could rise after mine cuts jobs

Gold Fields Limited, the world's fourth biggest gold producer, has announced that it will be cutting 1,885 jobs at its South Deep mine in South Africa.

Production at the mine fell to 37,500 ounces in the three months to the end of June - compared to 52,600 ounces in the previous quarter - as safety stoppages and work on access ramps took their toll.

Now Daniel Thole, a spokesman for the Johannesburg company, has confirmed that it has received 2,053 requests from workers seeking severance packages as it looks to return to profit.

The news will be of interest to anyone contemplating investing in gold, as the trimming of the firm's workforce could lead to further stagnation in output and subsequent increases in gold prices.

The apparent willingness of workers to receive voluntary redundancy is being largely attributed to the mine's poor safety record, with nine fatalities occurring in one incident in May.

In related news, Inside Metals offered a boost to people buying gold today (August 4th) by claiming that prices could top $1,000 per ounce again by the end of 2008.