Australian miner Newcrest has cut its output estimates for gold in the current year. Newcrest Mining said that a power malfunction at the Lihir mine in Papua New Guinea was the reason why they had downgraded the full year gold production guidance from 2.82 million ounces to 2.7 million ounces of gold in 2011.
A high voltage switchgear failure in the power station was the crux of the malfunction in the power. Due to the power problem the processing plant is running at a reduced capacity causing the company to anticipate the 5.4% drop in annual production. While work for repairing the power station is in progress the plant would have to be slowly phased back to full operating capacity over the coming three weeks.
Newcrest Mining is the fifth biggest gold producer in the world and has booked a net profit of $466 million in the first half of 2011. No changes have been made to the copper production guidance by the company.
The Lihir mine is not the only one which has been troubling the company this year. It has also had trouble with maintaining regular operations at its Bonikro gold mine in Ivory Coast due to political upheaval in the country. The last two months have seen severe security risks affecting mine operations there.