JOHANNESBURG (miningweekly.com) – Gold major Gold Fields is engaging the government on the issue of unplanned safety stoppages, which prevented the company's South African region from generating free cash flow in the latest quarter.

Gold Fields CEO Nick Holland tells Mining Weekly Online that were it not for the stoppages, its large Driefontein and Kloof gold mines would have made their calls.

"The stoppages have hurt us at Kloof and Driefontein. That 5% to 10% of gold that you lose as a result of the stoppages makes the difference between just treading water and making good money," Holland says.

Gold Fields was hoping to produce 6,5 t of gold at Driefontein and about 5,2 t at Kloof in the quarter.

"We would have made those targets and an extra 700 kg or 800 kg of gold would have resulted in significant extra cash flow because it's all paid for," Holland explains to Mining Weekly Online.

At R260 000/kg, the operations would have made an additional R240-million.

"These operations have got massive leverage, not only to the gold price, but also to the production level," Holland says, adding that the mines do not react well to stopping and starting, which create safety issues of their own.

Gold Fields South African head Vishnu Pillay reports that Gold Fields and the Department of Mineral Resources will discuss the way forward at a workshop on February 11.

"We are talking to the department about how we have to define the protocol of the notices issued to stop operations and also to the unions about their practice of holding of memorial days," Pillay tells Mining Weekly Online.

"We believe that the actions being taken right now can only be classed as punitive, given that there is no sense of proportionality that when you have an accident at one shaft, another shaft many kilometres away also gets stopped.

"We have no definitive answer yet, but I think there is room for us to find common ground," Pillay adds.

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