UPDATE 2-Harmony may restructure owing to strong rand

* Harmony posts Q1 headline loss per share

* Output beats company's own guidance

* Harmony to beat rand strength by boosting output (Adds CEO comments, analyst, shares, details)

By James Macharia

JOHANNESBURG, Oct 30 (Reuters) - Harmony Gold Mining Co. (HARJ.J) said on Friday that due to the strength of the rand, it may have to consider some restructuring at its lowest-grade, highest-cost operations, as well as boosting gold production.

Despite a higher dollar price of gold, the stronger rand put the brakes on the potential to grow revenue at the fifth-biggest producer in the world and No. 3 in Africa, which is just coming off a major reorganisation of its business meant to cut costs, closing marginal shafts in a bid to boost output.

The rand has gained around 25 percent against the dollar this year, limiting South African producers from enjoying the full benefit of the rise in the dollar price of gold. The producers sell their gold in dollars and pay costs in rand.

The rand firmed 8 percent in Harmony's first quarter to the end of September compared to the June quarter, the company said.

Harmony said despite a higher gold price and gold output that beat its own forecast in the first quarter to the end of September, the company swung into a loss on a combination of rising wage and electricity costs and the firmer rand.

"We will have to contend with the likelihood of continuing rand strength for now, and the negative consequences of this on rand gold receipts. Indeed, we may have to consider some restructuring at our lowest- grade, highest-cost operations," Harmony's Chief Executive Officer Graham Briggs said.

He did not give more details on the possible restructuring, but said he would fight the stronger rand by ramping-up output.

"Our weapon in managing the strong rand and rising costs, must be improved productivity - in short, we need to work harder and smarter. Our focus remains producing more profitable ounces," Briggs said.

"Looking further ahead, we remain bullish on the fundamentals of the gold sector in the medium and longer term."

Gold prices XAU= rose slightly toward $1,045 per ounce on Friday as the dollar remained pressured [ID:nT277925].

EARNINGS DISAPPOINT