JOHANNESBURG (miningweekly.com) – South African gold mining companies, which currently trade at a discount to their foreign peers, will have their "day in the sun again", Gold Fields CEO Nick Holland predicts.

Holland says that the investment community should be looking at South African gold companies more favourably in view of their significant gold reserves and available infrastructure.

Neither the higher cost index nor lower grades are unique to South Africa, and "far too much emphasis" is placed on South Africa's negatives.

More balance will lift the valuation of South Africa's gold companies that trade an unfair discount to the those of their foreign peers.

"Our gold mines can go on for another 20 years, and we're going to have our day in the sun again," Holland says.

He says that if the proposed super-profit tax is introduced in Australia, Gold Fields' operations and exploration there will be negatively impacted.

"If it is approved, it will make the fiscal regime in Australia one of the most uncompetitive regimes in the world, and that will be a major concern," he says.

In contrast, the South African government is currently working very constructively with the gold-mining industry and engagement with the Department of Mineral Resources on safety stoppages is unlikely to result in entire mines being closed down, which resulted in lower March quarter production.

The all-in cost of production indicates that South African producers ranged in the middle of the cost curve.

A return by Gold Fields' large Driefontein and Kloof mines to the production levels of the second half of 2009 will see unit costs fall.

Gold Fields infrastructure has been repaired and development is being increased.

Process flow is being stepped up and the company is on a drive towards greater production.

Gold Fields' Beatrix, Driefontein and Kloof mines have a collective 26-million ounces of gold within reach of existing infrastructure.

Considerable development has been carried out below current infrastructure at the South Deep mine, where production has been increased by 60% in a year.

South Deep is currently producing about 260 000 oz of gold a year and is on track to produce 750 000 oz/y at the end of 2014.

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