S.African miner Gold Fields kicks off big spending plans

  • Reuters
  • Stock Market News
S.African miner Gold Fields kicks off big spending plans
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JOHANNESBURG, May 6 (Reuters) - South African miner Gold Fields GFIJ.J posted steady first-quarter output on Thursday and approved two projects worth $90 million, kicking off big capital spending plans for 2021.

The bullion miner, which anticipates capital expenditure of around $1.177 billion in 2021, approved a 660 million rand ($46.11 million) solar plant at its South African South Deep mine and the development of the Huni Pit at its Ghanaian Damang mine, which is expected to cost $43 million.

Construction of the solar project is expected to begin in the second quarter of 2021 and will generate over 20% of the mine's average electricity consumption, curbing its reliance on South Africa's struggling state-owned utility Eskom.

"The reinvestment programme over the past four years has placed Gold Fields in a position where it can maintain and even grow its production profile over the next decade," said CEO Chris Griffith, who has been in office just over a month.

High gold prices XAU= and a weaker rand ZAR=D3 to the dollar have boosted the profits of South African mining houses whose revenues are mostly in dollars, while costs tend to be in rand.

The company said its Salares Norte Project, in the Atacama region of Northern Chile, continued to track ahead of schedule with $86.9 million spent on the project during the quarter.

First quarter gold production for the group, including its Asanko joint venture, reached 541,000 ounces from 537,000 ounces in the same period last year.

Unusually high rainfall during the quarter at its Cerro Corona operation in Peru resulted in 26% lower output during the quarter, while the impact of a second wave of coronavirus infections in South Africa saw quarterly production fall to 59,700 ounces at its South Deep mine compared to 60,600 ounces a year earlier. ($1 = 14.3136 rand)

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