Mali cuts gold output forecast partly due to Sadiola delays

Wed Aug 14, 2013 5:55am EDT
 
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BAMAKO Aug 14 (Reuters) - Mali, Africa's third-largest gold producer, has cut its gold output forecast this year to 49 tonnes from 57 due partly to delays at Anglogold Ashanti's Sadiola joint venture, officials said.

Mining Minister Amadou Baba Sy said the government had reduced estimates for industrial gold production to 45 tonnes this year, from a previous forecast of 53 tonnes in February. Mali's total gold output also includes artisanal production of about 4 tonnes per year.

Last year, industrial production was 46 tonnes and total output 50 tonnes.

Lassana Guindo, director general of the National Directorate of Geology and Mines, said that a fall in international gold prices was weighing on miners.

"We have lowered our forecasts due to lower production in several mines, principally the Sadiola gold mine," he said. "This mine was supposed to start underground production but will not do so this year because of technical problems with electricity."

Sadiola, in southwest Mali, has been an open-cast mine in which both South Africa's Anglogold Ashanti and Canada's IAMGOLD hold a 41 percent stake.

Anglogold said in February it was postponing a $500 million expansion and underground development of the mine due to security concerns following a French military intervention to oust Islamist rebels from northern Mali.

Precious metals mining companies are under pressure to cut costs as gold prices have fallen 20 percent this year to near a three-year low.

Mali elected a new president on Sunday, former prime minister Ibrahim Boubacar Keita, in its first polls since the French military intervention.

Industrial production should rise to 50 tonnes in 2014, for a total output of 54 tonnes, the minister said.

The mining sector's contribution to government revenue, meanwhile, hit a record of 275 billion CFA francs ($554.9 million) last year, up from 232 billion the previous year.