Will the gold market follow platinum's recent price increases?
*Financial Times, by William MacNamara, February 26, 2008:
"A reduced power supply to South African mines could lead to sharp
production losses and thousands of job cuts at Gold Fields, Africa’s
second largest gold producer, the company said on Monday.
Gold production was likely to fall between 15 per cent and 20 per cent
a year at Gold Fields’ South African mines as long as they were
operating on 90 per cent of their normal power supply, the company
confirmed, noting that power rationing was expected to last five more
years. An estimated 6,900 employees, or 13 per cent of the workforce,
could lose their jobs in restructuring, and some shafts could be closed
down.
The company’s statements were the fullest and most drastic signs yet of
the industrial costs of South Africa’s electricity shortage.
Since late January, the country’s mines – among the world’s biggest
producers of platinum, gold, and diamonds – have operated at 10 per
cent less power to mitigate a national power crisis.
The inability of Eskom, the power utility, to supply mines their normal
power allotment “has caused a significant crisis in the South African
mining industry”, said Terence Goodlace, Gold Fields’ head of South
African operations."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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