Sibanye Gold: Lower shares due to load shedding

JOHANNESBURG, May 4 (Reuters) – South African-focused Sibanye Gold said on Monday power shortages and a delayed start-up after the festive season cut its first quarter bullion output by 5 percent, sending its shares lower.Sibanye Gold

Africa’s no.3 gold producer said gold output for the three months to the end of March fell to 9,808 kgs (315,300 ounces) from 10,338 kg a year earlier.

Its shares fell 2.34 percent to 27.50 rand by 0919 GMT compared to the 0.58 percent increase in Johannesburg’s All-Share index.

State owned utility Eskom has been struggling to keep the lights on in Africa’s most advanced economy and mining companies, among some of the heaviest power users, have had to cut consumption by up to 20 percent.

Sibanye said gold production fell due agreements to reduce their power consumption.

The company said in February it would build a 3 billion rand ($249 million) solar-powered power plant to weather electricity shortages.

Sibanye, however, kept its forecast for full-year production unchanged at between 50,000 kg and 52,000 kg.

The company, along with industry rivals AngloGold Ashanti , Harmony Gold and Village Main Reef, is set to begin tough wage negotiations in the next few weeks with labour unions.

Sibanye cautioned against “inflated wage and benefits increases” which it said will significantly impact the sustainability of the industry as many gold mines were marginal.

“While delivering short term gains for employees and unions, (inflated wage increases) will inevitably result in the loss of jobs and destroy value for all stakeholders in the longer term,” it said.

($1 = 12.0330 rand) (Reporting by Zandi Shabalala; Editing by Tiisetso Motsoeneng)

Sibanye Gold's performance over the last three months.
Sibanye Gold’s performance over the last three months.
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