Picture: Phill Magakoe.

Johannesburg - Harmony Gold Mining, South Africa’s third-largest producer of the metal, made a loss in the second quarter as the price of bullion declined and output fell.

The loss excluding one-time items was $10 million in the three months ended December 31, compared with a $2 million profit the previous quarter, the Randfontein, South Africa-based company said in a statement today.

Gold’s 28 percent plunge last year, the biggest annual drop since 1981, caused Harmony to suspend its dividend and write down its 50 percent stake in the Hidden Valley venture with Newcrest Mining in Papua New Guinea by $268 million.

The company is responding by mining higher-grade ore, cutting costs and implementing more productive shift patterns.

“We are confident that we can continue to manage our operations so as to remain profitable even should the gold price come under further pressure,” chief executive Graham Briggs said in the statement.

Production dropped 1 percent to 305,913 ounces in the quarter from the previous three-month period and the average gold price received declined 4.8 percent to $1,277 an ounce.

Harmony’s all-in sustaining costs dropped 3.3 percent to $1,222 an ounce in the period.

Gold rose 0.1 percent to $1,245.53 an ounce at 7:24 a.m. in Johannesburg. - Bloomberg News