Gold Fields’ profits decreases as industrial action looms

Gold Fields Ltd, the world’s fourth-largest gold producer, has recorded an 18% decrease in its fourth-quarter net profit, as costs increased and production remained almost static.

The group’s earnings for the three months to the end of June 2007 fell to US$74 million, compared with US$101 million for same period in 2006.

Taking the year as a whole, earnings for the South African based company increased 53%, from US$241 million to US$328 million.

However, gold production decreased slight whilst costs increased, although both were offset by a stronger metal price.

Gold Fields’ Chief Executive, Ian Cockerill, says he will be viewing the 2008/09 fiscal year as one of consolidation.

The disappointing figures come at a difficult time for Gold Fields, as three trade unions representing workers in the South African gold mining sector are in a wage dispute.

The unions are negotiating with the Chamber of Mines, which represents Gold Fields, AngloGold Ashanti and Harmony.

The Chamber is offering a wage increase of nearly 8%, whilst Solidarity, the largest of the trade unions, is demanding a 15% increase.

Gold Fields currently has mines in South Africa, Ghana, Australia and Venezuela, as well as a developing mine at Cerro Corona, in Peru.