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Gold Fields hits wall of costs Posted: Thu, 25 Oct 2007 [miningmx.com] -- COSTS at Gold Fields in the September quarter were “unacceptably high”, said CEO Ian Cockerill, citing increased labour costs in South Africa and reduced output from its mines in Ghana and Australia. Total cash costs were seven percent higher in the quarter at R99,277/kg. Gold output for the group was slightly lower at just over a million ounces, with a 4,000 oz increase in output from the South African mines unable to offset an 18,000 oz decline at the international operations. “Despite known cost pressures due to wage settlements in South Africa and ongoing pressures on input costs throughout the Group, unit costs rose at an unacceptably high 7 per cent quarter on quarter,” Cockerill said in a statement accompanying the company’s results. “This was also influenced by the decline in production from both Tarkwa and St. Ives but improved performance from these two mines over the next few quarters should see a reversal in this trend,” he said. Looking ahead, Cockerill said, excluding the Choco 10 mine in Venezuela, which Gold Fields sold in October, gold production should increase and unit costs decline in the December quarter when compared with the September quarter. Operating profit in the quarter fell 11% to R1.7bn from the June quarter. Cash inflow for the quarter halved to R985m compared to the June quarter, because of working capital outflow of R224m, decreased pre-tax profit and increased tax payments. Tarkwa's gold output fell by 10% because of an abnormally high rainfall, which impacted both mining and processing. In the December quarter, gold output should rise by seven percent, bringing costs down. Drier weather should also help to trim costs. Click Here to subscribe to our daily newsletter
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