Gold Fields sets aside $30 million for silicosis lawsuit
Gold Fields Ltd. set aside about $30 million to settle its portion of South Africa’s biggest class-action lawsuit relating to lung diseases contracted by miners, as first-half profit plunged.
The amount may have to be adjusted depending on the progress of talks and legal proceedings, the Johannesburg-based producer said in a statement on Thursday. “The ultimate outcome of these matters remains uncertain, with a possible failure to reach a settlement or to obtain the requisite court approval for a potential settlement,” it said.
Mining companies including AngloGold Ashanti Ltd. and Anglo American Plc’s South African unit are facing a class-action lawsuit that as many as 500,000 mineworkers who contracted silicosis and tuberculosis could join. The mining companies are pursuing an out-of-court settlement.
The provision was announced as Gold Fields said earnings per share probably declined as much as 57% in the six months ended June 30 from the $0.14 reported a year earlier. The drop is “due to the impact of stronger exchange rates on converting local currency costs to US dollars and an increase in amortization” at its Tarkwa mine in Ghana, where reserve ounces are lower and ore mined and stockpiled has climbed, it said in the statement.
Gold Fields, which has operations in Peru, Ghana, South Africa and Australia, benefits when the currencies in the markets its mines are located in are weaker because its costs are mainly in those units. It sees gold-equivalent output at 1.05 million ounces, about the same as 12 months earlier, and all-in sustaining costs of $980 an ounce, less than the $992 reported in 2016, the company said.