Gold Fields slashes annual output target as icy weather bogs down Chile mine
Adds CEO comments and background throughout
By Felix Njini and Nelson Banya
JOHANNESBURG, Aug 23 (Reuters) -Gold Fields GFIJ.J lowered its annual output forecast for the second time this year after unusually harsh winter conditions hobbled a planned output ramp up at a new mine in Chile.
The Johannesburg-based gold miner's initial targets to raise output at the Salares Norte mine in Chile had been "ambitious" after the early and harsh winter conditions resulted in some pipes at its processing plant freezing, CEO Mike Fraser said on Friday.
The CEO added that the icy weather conditions were seasonally unusual and the company lost two months in production time at the mine located in the Atacama region in northern Chile.
"The massive lesson here is attempting a ramp up during winter was the wrong thing," Fraser said.
Gold Fields said its 2024 output is now forecast to be about 7% lower to between 2 million ounces and 2.15 million ounces. The revised output forecast would be its lowest since 2013 when it sold some of its South African mines to Sibanye Stillwater SSWJ.J.
This is also the second time this year that Gold Fields has revised its production forecast after initially targeting 2.43 million ounces of gold. The miner's shares were down 5.66% in early trade in Johannesburg.
The South African company has shifted focus away from its home country to more lucrative deposits in Ghana, Australia and the Americas region. Earlier this month, Gold Fields agreed to buy Canadian miner Osisko OSK.TO for about $1.57 billion.
Fraser said Gold Fields anticipates improvement in the second half of the year and output is expected to rise in 2025.
The miner's profit slumped 30% to $320.7 million in the half year ended June 30, hurt by declining gold output.
It also faced production setbacks at South Deep mine in South Africa and at Gruyere mine in Australia, which was hit by excessive rains, during the reported period.
Gold Fields declared an interim dividend of 3 rand per share.
Reporting by Felix Njini and Nelson Banya in Johannesburg; Editing by Mrigank Dhaniwala, Rashmi Aich and Shounak Dasgupta
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