Gold miners’ earnings hurt by higher production costs

October 29, 2008 by · Leave a Comment
Filed under: Commodities News 

I agree that if we see oil prices stablize in this $70-90 dollar area, we should see earning improve for this sector compared to the environment of $125-150 dollar a barrel oil.  Gold Fields is mentioned in this article and they are in a tougher situation because of the continuing issue of power production from Eskom of South Africa.

Release:

Two of the world’s leading gold miners reported big drops in quarterly earnings on Wednesday as soaring costs for fuel and raw materials ate into margins already narrowed by a slumping gold price.

Denver-based Newmont Mining Corp, the world’s second-largest gold producer, posted a steeper-than-expected 51 percent drop in third-quarter profit, due to decreased sales volumes and higher production costs.

South Africa’s Gold Fields, the world No. 4, posted an 86 percent fall in adjusted earnings in the September quarter, also because of lower production blamed on safety repairs and higher costs.

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