Johannesburg - Gold Fields chief executive Nick Holland has warned that first quarter production at its South Deep mine could be lower than expected due to safety stoppages.
He said the mine’s production target this year of 315000 ounces (9.8 tons) could be impacted by stoppages in the first part of the year due to two fatalities,.
“What happens in the short run in no way affects the integrity of the long-term plan but it may impact whether the 9.8tons is achievable or whether it’s a lower number,” Holland said.
Gold Fields’ last South African asset, South Deep, reported a rise in profit for the first time last year along with a plan to make the mine more profitable with a long-term production target of 500000 ounces a year by 2022. The company could not say by how much production would be impacted and is expected to give further details in an update next month.
“The first quarter of the year is not looking good and you are going to see that in our numbers,” said Gold Fields vice-president and head of operations at South Deep Adriaan de Beer.
South Africa’s mining industry has for years complained that government inspectors have been imposing frequent work stoppages over safety, costing billions of rand in lost output and putting mines and jobs on the line.
The mines ministry has justified the blanket stoppages, saying on several occasions that they are needed to save lives.
Gold Fields has said it will spend R2.28 billion on underground infrastructure over the next six years, peaking at R582 million in 2019. Mechanisation of mines is also seen as a measure to reduce fatalities in the sector. Part of the revised plan for the mechanised mine includes the construction of an underground workshop to maintain machines, which is expected to increase their life and improve their contribution to production.
South Deep has presented operational challenges in an unforgiving geology 3km beneath the surface with the company previously scrapping production and cost targets for the operation in 2015.