Nick Holland, CEO, Gold Fields
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Gold Fields sees improved June quarter
Allan Seccombe
Posted: Mon, 31 Mar 2008

[miningmx.com] -- GOLD FIELDS’ March quarter gold output in South Africa will be close to 20% lower than the December quarter rather than the worst-case 25% scenario, but production should improve in the June quarter, new CEO Nick Holland said on Monday.

Gold Fields advised the market in February that South African gold production would be between 20 and 25% lower than the December quarter output of 657,000 oz because of the power outages experienced in the country.

“We are going to be within that, comfortably within that, probably at the lower end towards the 20% as opposed to the upper end near 25%,” Holland said on a conference call about the departure of Ian Cockerill and John Munro from the company.

the lower end
State power utility Eskom declared force majeure on its electricity supply in January, effectively shutting the mines for a week. For the whole of February, mining companies had to make do with 90% of their normal power consumption. This was lifted in March to 95%.

“In the June quarter, we should be better again because we don’t have the impact of the week’s stoppage and the build up again,” said Holland, whose appointment as CEO from the finance director post is effective 1 May this year.

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It took about four to five days to restart the mines after the January stoppage.

“This quarter we’ve been hard hit, but we are within what we told you in February. June will be better provided we have the power levels we currently have.

“At 95% we are re-commissioning areas that were shut down and couldn’t operate at 90%. That will take a while to get in place and you won’t see the full impact of that in the June quarter,” Holland said.

Gold Fields warned in February that 6,900 jobs were at risk because of the 10% reduction in power consumption. Of these, 4,900 were at risk at the Kloof and Driefontein mines.

“Now that we have 95% power at those two mines, we don’t see we’d be in any position to retrench at those operations,” said Terence Goodlace, who has been appointed the chief operating officer.

At South Deep, 2,000 workers are affected by the new mining strategy and the company is looking to absorb as many of these workers as possible. Talks are underway with the unions about the strategy to bring workers into the other three mines in the group.

Holland hammered home the message that the strategies Gold Fields has developed over recent years will remain intact and there was no need to change them just because the CEO position had been vacated by Cockerill, who served in that role for six years.

"The Gold Fields strategy set out and explained to the market over the past few years wasn't just Ian's strategy. It's a strategy agreed by all executives," Holland said. "I don't foresee just because of different (management) styles it's going to change which way the ship is steered. I may steer it slightly differently, but hopefully in the same direction."