Harmony sticks to 2 mln oz output target for 2015

The chief executive of Harmony Gold, Africa's third largest gold producer, said on Monday he remained committed to a 2015 output target of 2 million ounces despite a decline in production over the last financial year.

Graham Briggs also told Reuters in an interview after the release of the group's fourth quarter results that he expected lower costs in the next quarter and a gold price of $1,850 an ounce in 2012.

Asked if the group was sticking to its 2015 production target, Briggs said: "Yes ... These assets can produce 2 million ounces. We'll continue to focus on the targets."

"Having said that, if one of the assets starts wobbling or something, we'll take it out. We're not going to be obsessive about our two million ounces but we are going to be obsessive about having a profitable and sustainable company," he said.

The company produced about 1.3 million ounces over the financial year to the end of June, a drop of 9 percent on the year due to safety stoppages and underperformance in some shafts.

The company's earnings slid 67 percent in the fourth quarter because of costs related to factors such as higher winter tariff rates and additional expenditure on equipment.

Briggs said he saw lower overall costs in the next quarter though power rates would still bite. South African miners pay higher electricity tariffs during the 3-month winter from June to August.

He said because the July to September period would include two winter months, power costs would be around 55 million rand more than they were in the previous quarter "but generally, I think costs should be slightly down this quarter."

On the price of gold, which has been scaling new highs as investors seek safe havens amid the U.S. and European dept crises, Briggs told Reuters: "I don't know that it's going to scream back any higher this year."

"I have a prediction next year for $1,850. It looks like I'm undershooting," he said. Spot gold at 0930 GMT was trading around 0.4 percent lower around $1,738 an ounce. It rallied to a record high of $1,813.79 last Thursday.

Gold's record run has sparked an increase in exploration across the industry and Briggs said the group would boost spending in this area in the next financial year. On its 2011 books exploration expenditure rose by over 60 percent to 353 million rand.

"We like southeast Asia because that's got good geology. I'm talking Papua New Guinea, Indonesia, into the Philippines. We continue to look around Africa but Africa especially West Africa remains very expensive," he said.

The group's main growth area is in Papua New Guinea where it has joint-venture operations with Australia's Newcrest. The Wafi-Golpu project that the companies share there is seen producing between 300,000 and 700,000 ounces of gold per year once it begins operations.