Jobs and production lost as South African power crisis continues

Gold Fields, the world’s fourth-largest gold miner, has reacted to the power supply difficulties that continue to beset South Africa with the news that it will be reducing production.

Last month operations in a number of South Africa’s key mining industries were halted for five days because of power rationing introduced by utility company, Eskom. Ever since, the country’s miners have operated with 90% of the electricity they need.

The head of Gold Fields’ South Africa operations, Terence Goodlace, has stated: “The inability of Eskom to supply the mines their full power requirements, and to commit to additional electricity demand for new mining projects…in development, has caused a significant crisis in the South African mining industry.”

Adding: “It is paradoxical that we have to consider downscaling in the current record-high gold price environment.”

The company expects sustainable production at its South African operations to fall by between 15% and 20% from the fourth quarter of 2007 onwards. Gold Fields’ workforce total 53,000 and around 6,900 job losses are expected.

Meanwhile, AngloGold Ashanti, the world’s third-largest gold miner, expects this year’s gold production to be cut by 400,000 because of the power crisis.