Johannesburg - AngloGold Ashanti on Thursday became the second South African gold producer to warn of a sizeable fall in output in 2008 if forced to slash its electricity consumption to help ease an energy crunch. AngloGold said it expected to produce between 4.8 and 5 million ounces of gold in 2008, down over 400,000 ounces or over 7 per cent on 2007, if state electricity supplier Eskom maintained its order to cut electricity consumption by 10 per cent.
"The uncertainty around Eskom power supply is having a significant impact on our operations in South Africa," Mark Cutifani, AngloGold Ashanti's CEO said, adding the company was working with trade unions, Eskom and the government to find "sustainable solutions."
The company is the second gold producer to warn of a significant fall in output after Eskom put heavy industry on a leaner power regimen in a bid to end over three weeks of rolling blackouts caused by electricity shortages. Residential users are also being asked, but not yet forced, to cut power usage by 10 per cent.
Gold Fields, the world's fourth-largest gold producer, last week warned a 10-per-cent cut in power could result in a cut in production of up to 20 per cent.
South Africa's large gold, platinum and diamond mines have been ramping production over the past week after being ground to a halt for five days in January when Eskom said it could not guarantee an uninterrupted power supply.
AngloGold issued its prediction of reduced output when announcing its fourth-quarter and 2007 final year results.
Production fell 3 per cent to 5.48 million ounces following safety interventions in South Africa and operational difficulties at a gold mine in Tanzania, the company said.
Total cash costs for the year grew 16 per cent to 357 dollars an ounce driving down adjusted headline earnings to 278 million dollars from 411 million dollars a year earlier.
