South Africa gold production tumbles after power crisis

JOHANNESBURG: Gold production in South Africa fell 16.8 percent in the first quarter of the year following widespread power cuts, figures from the chamber of mines showed on Tuesday.

A total of 52,228 kilograms were produced in the first three months of 2008, a fall of 15.6 percent on the last quarter of 2007 and a 16.8 percent drop on the corresponding period last year, the chamber said in a statement.

The gold mining industry accounts for 40 billion rand (5.1 billion dollars, 3.3 billion euros) or 7.5 percent of South Africa's exports, although it recently lost its position to China as the world's number one gold producer.

South Africa's economy suffered a hammer blow from the power crisis at the start of the year which affected everything from gold mining to traffic lights.

Government figures last week showed first quarter growth at 2.1 percent on a 12-month basis, down sharply from 5.3 percent in the last three months of 2007.

In its statement, the chamber said it was "vital" to avoid a repeat of the power shortages in January which forced a temporary shutdown before production resumed at reduced capacity for several weeks.

"Rather, a more strategic approach to managing the electricity challenge is required, including ensuring that tightness in the electricity market is handled better in future and that all electricity users become more energy efficient," it said.