Gold Fields CEO looking at ways to replace depleting mines as peak output draws near

By Felix Njini

(Bloomberg) – Gold Fields’ new chief executive officer is looking at ways to replace depleting mines as output is projected to peak in three years time.

Production will rise to 2.7 million ounces by 2024, which is as much as 400,000 ounces above the forecast output for this year, the Johannesburg-based company said Thursday. While the Salares Norte project in Chile is expected to bolster output from 2023, Gold Fields will come under pressure as older mines near the end of their lives.

“We must now start looking at ways of preserving the value we have created beyond 2024,” said Chris Griffith, who took over as CEO from Nick Holland in April.

Like Johannesburg-based rival AngloGold Ashanti, Gold Fields has shifted focus to more profitable mines as the industry in South Africa dwindles amid power cuts, soaring costs and the geological challenges of exploiting the world’s deepest deposits. 

Despite Covid-19 disruptions, production this year is supported by the turnaround at South Deep, the company’s last remaining mine in South Africa. Gold Fields, founded by Cecil Rhodes in 1887, has been under investor pressure to end years of losses at the mine, which sits on the world’s second-biggest known body of gold-bearing ore.

First-half profit more than doubled to $387.4m from a year earlier. The company will pay a dividend of R2.10 per share, sticking to its policy paying 25% to 35% of headline earnings to investors.

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