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Johannesburg - South African gold producers are expected to
report lower quarterly earnings with production knocked across the board as
output-disrupting safety stoppages continue to sting, a Reuters poll of 7
analysts showed. A dip in the rand gold price is not expected to help either.
While the dollar gold price added 6.7% in the three months
to the end of March, the average rand gold price fell 4% to R421 000/kg because
of the local currency's appreciation against the greenback.
The price of gold in rand has an especially big impact on
the bottom line of Harmony Gold Mining Company [JSE:HAR] because it gets about
90% of its output from South Africa.
Bigger rivals AngloGold Ashanti [JSE:ANG] and Gold Fields
[JSE:GFI] get about 40% and 50% respectively of their production from their
domestic base.
All three have already flagged to the market their
expectations for lower output.
AngloGold has said its production dropped 12% in the first
three months of the year mostly because of output-disrupting safety stops.
The largest gold producer in Africa said safety stoppages
resulted in a loss of 76,000 ounces.
AngloGold sees production for the three months to end-March
at 980,000 ounces. This is against December quarter production of 1.11 million
ounces and previous guidance of 1.03 million ounces.
Historical figures show an average of 11 mineworkers are
killed in South African mines every month but fatalities are falling as the
industry is subjected to a surge of inspections.
The clampdown by the Department of Mineral Resources is also
partly behind the 18% fall in output at Harmony.
Harmony has also said the drop stemmed from a planned
infrastructure upgrade at its Doornkop mine in South Africa and
lower-than-expected grades at four of its other mines.
An output fall of 6% is expected from Gold Fields, the
world’s fourth-largest gold miner, after it said March quarter production would
be 827,000 ounces. Gold Fields is the last of the three producers to report
with results due on May 17.
AngloGold will report on Thursday and Harmony will kick off
on Wednesday. AngloGold's numbers are its adjusted headline earnings per share
in US cents.
Gold Fields' numbers are adjusted earnings per share in
South African cents.
Harmony's numbers are headline earnings per share in South African cents.
