South African Gold miners reaping in rich harvest

January 28, 2009

Commodity Online
JOHANNESBURG: It seems only gold miners are doing well in the world now. Even as the world is struggling to come out of the global gloom, gold producers are reaping in rich harvest.

Take the case of South Africa’s top gold producers. They are all set to report strong earnings gains for the fourth quarter of 2008.

Eve though South Africa has been spared the worst effects of global financial crisis, the rand and markets have been hit by risk aversion and slower world economic growth.

The good news for producers was the rand’s depreciation by an average 28 per cent to 9.94 rand to the dollar during October to December. This sent the rand gold price up by 17 per cent to a record high of 254,000 rand per kg.

Total cash costs at Gold Fields, the world’s No. 4 producer, and Africa’s second-biggest, are expected to fall 21 per cent to $489 per ounce. Gold Fields sees output rising 5 per cent to 840,000 ounces.

Harmony, the world’s No. 5 and third-biggest producer in Africa, will see earnings per share jump to 104 South African cents for its second quarter from 8 cents in the September quarter.

However, market watchers expect a 5 percent fall in Harmony’s gold production from continuing operations to 378,000 ounces due to underground fires at its mines, and a rise in cash costs and no dividend.

World’s No. 3 and top Africa producer AngloGold will post adjusted headline earnings per share of 25 US cents in its fourth quarter to end-December, versus an adjusted loss of 275 cents in the September quarter.

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