Gold Fields Cuts Output Goal on Struggling South Africa Mine
(Bloomberg) -- Gold Fields Ltd. lowered its 2018 output forecast after workers at its South African mine embarked on a strike in protest at the company’s plan to cut 1,500 jobs as it restructures the unprofitable operation.
Production this year is now expected at 2 million ounces, down from an earlier forecast of 2.08 million ounces to 2.1 million ounces, the Johannesburg-based company said in a statement Friday.
- Gold Fields is now forecasting production from South Deep of 154,000 ounces this year, down from its earlier projection of 244,000 ounces, assuming the strike is over by the end of November. That’s less than half the company’s original target and could yet prove optimistic if, as Chief Executive Officer Nick Holland fears, the stoppage runs through December.
- Holland plans to continue restructuring South Deep, which has long been a drag on the company’s performance. The risk is a downward spiral as a prolonged strike forces Gold Fields to cut even more jobs than it currently envisages.
- One upbeat note is the company’s international division. Production is now expected to rise to 1.85 million ounces in 2018, up from an original estimate of 1.75 million ounces. From next year, those operations should deliver more than 2 million ounces, the CEO said.
- Gold Fields shares fell as much as 5.7 percent in Johannesburg trading, bringing this year’s decline to 30 percent.
- Read more about Gold Fields’ results here.
- Output in the quarter ending September rose to 533,100 ounces, from 523,200 ounces in the preceding three months.
- Reinvestment project at Damang in Ghana is on track, while construction at Gruyere in Australia has made progress, with the mine due to start producing in the second quarter of 2019.
©2018 Bloomberg L.P.