UPDATE 2-AngloGold cuts output target on suspended mine

* AngloGold posts Q3 headline loss after trims hedge book

* Says stronger currencies, costs hurt margins

* Warns planned Eskom tariff could hurt sector, economy

(Adds CEO, annual output, Eskom tariffs, analyst)

By James Macharia

JOHANNESBURG, Nov 2 (Reuters) - AngloGold Ashanti (ANGJ.J), the world's No.3 gold producer, lowered its annual production target for the second straight quarter after suspending output at a South African mine for safety checks.

Africa's top gold producer also reported on Monday it swung to a better-than-expected headline loss for the third quarter on costs related to trimming its hedge book as well as stronger currencies, rising wages and power charges.

The company has vowed that by 2014 it will wind up its forward sales - among the biggest in the sector - to benefit from the spot price of gold.

"The disappointing factor is the downgrade on full-year production," said Daniel Sacks, a portfolio manager at Investec Asset Management.

"This decreases the company's valuation because they can't deliver what was expected. It's a safety-related issue and it's the reality of operating in South Africa."

Chief Executive Officer Mark Cutifani warned steep electricity tariff hikes from state utility Eskom [ESCJ.UL] would erode profit margins and boost costs in South Africa's gold sector by between 15 to 20 percent, making it one of the least favourable destinations for mining investors.

"Coupled with the exchange rate this could have a very serious impact on mining and the country's economy," he said. "It will certainly impact on production, costs and employment."

His remarks echoed comments last week by the chief executives of Gold Fields (GFIJ.J) and Harmony Gold Mining Co. (HARJ.J). [ID:nLT181196] [ID:nLU179609]

Eskom has applied to raise tariffs by 45 percent a year over the next three years to expand power generation. [ID:nLD681714]

OUTPUT LOWER