Kinross Gold makes more cost cuts as earnings fall

Wed Nov 13, 2013 9:51pm EST
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(Reuters) - Kinross Gold Corp (K.TO: Quote) said on Wednesday it is making further cuts to its employee numbers and capital spending as the Toronto-based gold miner reported a steep drop in third-quarter earnings, hurt by weaker gold prices.

The company, one of the world's 10 biggest gold producers, said it had identified around $20 million in expected annual cash savings, primarily from laying off workers.

Kinross and other gold miners have promised to slash costs as they grapple with tumbling profits caused by a steep decline in the gold price over the past year, as well as soaring mine development costs. Gold prices, trading at $1,272 on Wednesday, have fallen 24 percent this year.

Kinross is chopping around 1,000 jobs overall this year, many of them as part of already announced cost-cutting initiatives, said company spokesman Steve Mitchell. Most of the job cuts have already been implemented.

Kinross, which employs around 9,000 people, last month said it was cutting 300 jobs in Spain and Africa's Mauritania.

To save money, Kinross will merge its North and South American regions into a new Americas region, close its Reno, Nevada office and "downsize" its administrative offices in Chile and Brazil.

"We continue our focus on reducing capital and other costs in a lower gold price environment," Kinross chief executive Paul Rollinson said in a statement.

The miner has also identified a further $50 million in capital savings for 2013, on top of the $150 million it announced previously. The company now expects its 2013 capital spending to be about $1.4 billion.

Kinross said it expects its 2014 capital expenditures to be sharply lower - in the range of $800 million to 900 million.   Continued...

People look on during the Kinross Gold Corporation annual general meeting for shareholders in Toronto, May 9, 2012. REUTERS/Mark Blinch