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Johannesburg - South African-focused Sibanye Gold [JSE:SGL] said on Monday power shortages and a delayed start-up after the festive season cut its first quarter bullion output by 5%, sending its shares lower.
Africa’s no.3 gold producer said gold output for the three months to the end of March fell to 9 808kg from 10 338kg a year earlier.
Its shares fell 2.34% to R27.50 by 09:19 GMT compared to the 0.58% increase in Johannesburg’s All-Share index.
Eskom has been struggling to keep the lights on and mining companies, among some of the heaviest power users, have had to cut consumption by up to 20%.
Sibanye said gold production fell due agreements to reduce their power consumption.
The company said in February it would build a R3bn solar-powered power plant to weather electricity shortages.
Sibanye, however, kept its forecast for full-year production unchanged at between 50 000kg and 52 000kg.
The company, along with industry rivals AngloGold Ashanti [JSE:ANG], Harmony Gold [JSE:HAR] and Village Main Reef [JSE:VIL], is set to begin tough wage negotiations in the next few weeks with labour unions.
Sibanye cautioned against "inflated wage and benefits increases" which it said will significantly impact the sustainability of the industry as many gold mines were marginal.
"While delivering short term gains for employees and unions, (inflated wage increases) will inevitably result in the loss of jobs and destroy value for all stakeholders in the longer term," it said.
