Lihir output hit by shutdowns

Unplanned shutdowns have taken their toll on the production targets of one of the world's major mining firms.

Australian mining giant Lihir Gold has been forced to downgrade its 2007 production forecast for the second time, shaving a full seven per cent from yearly output.

Previously 750,000 ounces of gold had been forecast for production this year, but after shutdowns that followed industrial action and equipment problems, the company's total output forecast was reduced to 700,000 ounces.

A drop in output from key producers could allow burgeoning gold demand to outstrip supply even more widely than at present, but Lihir chief executive, Arthur Hood, claimed that the year's setbacks would not spill over into 2008.

"The improved operational performance, together with the expansion projects being planned, and the elimination of all hedging earlier this year, will position Lihir for a strong improvement in operating cashflows in 2008 and beyond," he said.

"Despite these temporary setbacks, Lihir Gold remains on track to achieve record production in 2007. This will be followed by another record in 2008," Mr Hood added.