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Gold investment could be buoyed by Gold Fields production cut

Gold Fields has cut 1.1 million ounces' worth of production from its two largest mines in South Africa as it attempts to address ongoing safety concerns.

The world's third largest gold producer commissioned a review into its safety practices following the death of nine workers in a shaft accident at its South Deep mine in May.

On the back of the findings, 600,000 ounces have been cancelled for the duration of the project at Driefontein, the largest mine in the group, while 500,000 ounces have been cut at Kloof.

The decrease centres around the exclusions of a portion of the pillars, with the grade dropping from 9.2g per tonne to 8.5g at the former and from 9.1g per tonne to 8.7g at the latter.

Gold Fields head of South African operations Vishnu Pillay said the review was based on a risk tolerability framework and an empirical seismic risk model.

The news will be of interest to consumers contemplating investing in gold, particularly with Mr. Pillay admitting that any further deterioration could result in the company halting work at the affected areas.

Gold Fields also confirmed yesterday (August 25th) that it does not expect full production at Deep South until 2014, two years later than originally planned - a situation which may yet boost gold prices on the back of reduced supply.

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